Indian startup Varaha inks deal with Microsoft to remove 2 million tonnes of carbon dioxide

Project puts spotlight on smallholder companies and their capability to deliver on carbon removal, says Varaha CEO

Indian startup Varaha inked a deal with Microsoft on Thursday (Jan 15) to develop 18 industrial gasification reactors that will remove about 2 million tonnes of carbon dioxide over 15 years.

The deal was for an undisclosed sum.

Varaha is backed by Tsao Pao Chee (TPC), a family business in Singapore helmed by Chavalit Frederick Tsao, which has roots in the shipping industry.

The project sources cotton stalks from smallholder farms in Maharashtra, India. Normally, these stems would have been treated as waste biomass after harvest, and burned.

This project thus provides an alternative use for the stalks, converting them into biochar, a modified charcoal, through Varaha’s biomass gasification facilities. This can sequester biogenic carbon for centuries.

On how the move would benefit Asia, Varaha chief executive Madhur Jain said that by signing such landmark deals with the likes of Google in 2025 and now Microsoft, “a spotlight is put on the smallholder (companies) and their capability to deliver on carbon removal. This increases the potential of catalysing more such deals in the near future.”

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He added that the project also delivers measurable benefits for farmers and communities. This includes the promotion of regenerative agriculture as soil health is improved, which leads to long-term agricultural productivity.

Phillip Goodman, director of carbon removal at Microsoft, said: “This offtake agreement broadens the diversity of Microsoft’s carbon-removal portfolio with Varaha’s biochar project design that is both scalable and durable. It represents a step forward in scaling biochar carbon dioxide removal growth in Asia and advancing co-benefits for farmers.”

The tech behemoth aims to be carbon-negative by 2030.

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The reactors will go livein the third quarter of 2026. Jain said that, in general, for large companies, this is one of the most credible ways to get to net zero.

“So, having access to credits from projects that can scale and are being developed by experienced operators like Varaha provides (an) avenue (for this journey).”

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