Microsoft has told several carbon‑removal firms it will pause credit purchases, a move that could reverberate through a market worth billions. The decision, reported by Heatmap and confirmed by two insiders, follows the tech giant’s earlier pledge to offset all emissions since its 1975 founding. Investors fear the retreat will starve start‑ups dependent on corporate demand. The shift may dampen fundraising momentum for firms.

Hundreds of start‑ups have raised over $5 billion to develop direct‑air capture, biochar and enhanced rock weathering, yet sales remain modest. McKinsey projected a $1.2 trillion market by 2050, but purchases have lagged. Apart from Microsoft, firms such as Morgan Stanley, SAP and Airbus have bought only a fraction of the $11.9 billion volume tracked by CDR.fyi, while the Frontier coalition logged $264 million in deals last year.

With Microsoft accounting for 79 % of all credits bought to date, its pause trims the pipeline for projects that have collectively removed just 1.3 million tons of CO₂—about 0.003 % of annual global emissions. The contraction underscores the sector’s reliance on a handful of mega‑buyers and highlights a significant scaling hurdle investors must confront.