Nature-based solutions company Living Carbon and renewable energy investor Octopus Energy Generation announced a new agreement today to remove up to 50 million tons of carbon dioxide from the atmosphere through reforestation projects on degraded land in the U.S.

Under the new agreement, Octopus’s fund management team is set to invest $500 million into afforestation and reforestation projects in the U.S. developed by Living Carbon, and will also acquire a $13 million stake in Living Carbon’s carbon removal business.

The agreement marks a significant boost for the carbon removal sector, following reports earlier this month, that Microsoft, by far the largest buyer of carbon removal credits globally, has told carbon credit suppliers that it is pausing its carbon removal purchases. Microsoft subsequently said that its carbon removal program will continue to form part of its strategy to achieve its climate goals, although it “may adjust the pace or volume of our carbon removal procurement.”

Founded in 2019, California-based Living Carbon transforms marginal land into high-value environmental assets, focusing on restoring abandoned mines, degraded farmland, and unproductive soils through site-tailored reforestation. In addition to removing carbon and generating income through carbon credits, the company’s projects deliver co-benefits including improved soil and water health, enhanced biodiversity, and economic development opportunities for rural communities.

The company has recently signed carbon removal offtake agreements with Google, Meta and McKinsey, and a 1.4 million ton carbon credit deal with Microsoft last year.

According to Living Carbon, the new agreement positions the company to remove up to 50 million tons of carbon dioxide over the next 40 years.

In a post announcing the agreement, Living Carbon Founder and CEO Maddie Hall said:

“With this investment, our carbon business is now fully funded. Getting our carbon business to self-sustaining growth now means we can expand into new markets and products.”

According to Octopus, the new agreement forms part of its broader commitment to invest in California as a leading cleantech hub, with the goal of directing $2 billion into U.S. clean energy projects by 2030.

Zoisa North-Bond, CEO at Octopus Energy Generation, said:

“This is a landmark deal for us in the US and a huge step in our mission to invest in solutions that drive the planet toward a cleaner future. Having industry leaders and the world’s largest tech giants backing these projects sends a powerful signal that this market is ready to grow.”