Microsoft’s history of dominating the market for carbon removal continued when the tech giant announced late last week it was buying 4.9 million tons of removal credits from Vaulted Deep, a startup that buries organic waste underground. Here’s what prospective buyers and other carbon credit players need to know about the deal.
It’s not all about human waste
The Wall Street Journal described the deal thus: “Microsoft wants your poop to lower its emissions.”
That’s not quite right, according to Vaulted co-founder and CEO Julia Reichelstein. The startup takes multiple different types of organic waste, including manure and sludge from paper mills, and injects it hundreds or thousands of feet below the ground. This “bioslurry” contains carbon that was removed from the atmosphere by plants before being eaten by animals or used in paper processing, making the process carbon negative.
But, yes, excrement is involved. Vaulted’s bioslurry injection technology was originally developed as means of disposing of waste from a water treatment plant in Los Angeles, and human fecal matter will be an important input going forward.
Will the credits deliver real climate value?
One of the biggest problems in carbon markets is proving “additionality’ — knowing that credit revenue is essential to making a project work. Some forest conservation schemes, for example, have been criticized for selling carbon credits to protect forests that were really not at risk.
Vaulted’s process is clearly additional, said Reichelstein, because the vast majority of the organic waste it’s targeting in the U.S. is spread on land, incinerated or sent to landfill, releasing carbon dioxide and methane in the process. Without a commercial incentive or regulatory requirement to do otherwise, credit revenues are needed to fund the removal.
Buyers will want that and other claims — including guarantees that the carbon will not seep back into the atmosphere — to be verified by an independent third party. At present, none of the carbon credit rating agencies have assessed Vaulted’s projects. But the startup does have important proof points. It follows a methodology developed by Isometric, a credit registry with a reputation for thoroughness. Microsoft is also known for doing extensive due diligence on prospective sellers, as is Frontier, a coalition of removal buyers that purchased a total of slightly more than 150,000 credits from Vaulted in 2023 and 2024.
“Having them do months and months and months of diligence on us and deciding to purchase from us is good industry validation,” argued Reichelstein.
What you can expect to pay for a Vaulted credit
The cost of the Microsoft deal was not disclosed, but Frontier paid $58 million for its credits, putting the per-ton price just over $380. For comparison, other recent deals involving “durable” removal — defined as locking away carbon for hundreds or thousands of years — include direct air capture, which costs $500 per ton or more, biomass electricity generation with carbon capture ($350/t) and carbon capture at pulp and paper plants (less than $200/t).
Prices of all these credit types are expected to fall, however. Frontier is willing to pay high prices to back emerging technologies, but the coalition only backs projects that can demonstrate a plausible path to reducing costs to less than $100/t. Reichelstein said she expected Vaulted’s costs to come “dramatically down” and to be competitive with other methods for storing biomass.
Where buyers can find Vaulted credits
Vaulted’s operations are relatively small scale at present: The company has generated 18,000 credits from a facility in Hutchinson, Kansas, that has been operating since August 2023. Thanks to the deals with Frontier and Microsoft, it’s now scouting other sites to fulfill those contracts and bring more credits to market. Vaulted is already developing a site in Monarch Fields, Colorado, and has applied for permits to develop a facility at an undisclosed location on the East Coast, said Reichelstein.
The challenge is in part about finding sites that are close enough to bioslurry sources for the process to make economic sense. The supply of waste itself shouldn’t be an issue: Reichelstein said the U.S. produces around 1 billion tons of “unused or unusable” organic waste annually, enough to generate hundreds of millions of tons of removal credits.
Companies interested in purchasing credits can explore offtake agreements like the one signed by Microsoft or purchase in smaller amounts direct from the Vaulted Deep website.
