Microsoft locks in up to 3 million nature-based carbon credits through a long-term offtake and fund investment with EFM.
First U.S. forestry investment by Microsoft’s Climate Innovation Fund, backing EFM Fund IV to scale climate-smart forest management.
Deal raises the bar for Improved Forest Management (IFM) projects, enhancing forest carbon storage, biodiversity, and local economic benefits.
Microsoft has entered a landmark agreement with forest investment and management firm EFM to secure up to 3 million nature-based carbon removal credits as part of its broader effort to become carbon negative by 2030.
The multi-faceted deal includes a long-term offtake agreement for up to 700,000 credits by 2035 from a 68,000-acre property in Washington State’s Olympic Peninsula. The site, previously used for industrial logging, will be transitioned to climate-smart forest management under EFM’s FSC-certified model.
Additionally, Microsoft’s Climate Innovation Fund (CIF) has made its first U.S. forestry investment by backing EFM Fund IV, which aims to mobilize $300 million for improved forest management projects nationwide. This investment secures Microsoft’s access to an additional 2.3 million high-quality credits in the future.
“Microsoft’s support marks a pivotal step in accelerating support for high-quality improved forest management projects,” said Bettina von Hagen, CEO of EFM. “Their leadership sets a strong precedent for the carbon market and reinforces the importance of natural forests as a scalable natural climate solution in the U.S.”
“Microsoft recognizes the important role of high-quality, nature-based solutions in meeting our Carbon Negative by 2030 goals,” added Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft. “We are proud to contribute to climate-smart forest management in Microsoft’s own backyard on the Olympic Peninsula.”
Fund IV’s strategy expands beyond traditional timber revenues, integrating carbon credits, conservation easements, and sustainable wood products. The fund focuses on securing additional forest properties in the Western U.S., with potential for national expansion where climate-smart practices yield competitive investor returns and community impact.
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The partnership also strengthens the credibility and impact of Improved Forest Management (IFM) as a carbon removal pathway. IFM techniques—such as extended tree rotation, selective harvesting, and reduced-impact logging—enhance carbon storage while boosting biodiversity, water quality, and local economic resilience.
Microsoft and EFM are also adopting dynamic baselines and a conservative approach to harvest modeling to maintain high credit integrity.
EFM’s commitment to best-in-class methodologies and Microsoft’s strategic support signal a new benchmark for scalable, high-integrity forest carbon solutions in the U.S.
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