(Bloomberg) — Microsoft Corp. is partnering with Sublime Systems to reduce its indirect greenhouse gas emissions through a first-of-a-kind deal to buy low-carbon cement products from the startup.
Under the contract, Microsoft can purchase up to 622,500 metric tons of Sublime’s cement over a period of six to nine years. Microsoft can claim the carbon reductions associated with that cement in its own emissions accounting, even if it doesn’t use the material itself. If Microsoft passes on buying the product, the Somerville, Massachusetts-based Sublime can sell it to local buyers but the software giant still gets to claim the carbon savings.
Sublime uses an electrochemical process that eliminates limestone, which is cement’s main ingredient and releases carbon dioxide when it’s heated up and broken down.
Microsoft’s push to build more data centers supporting artificial intelligence has driven the company further away from its goal of becoming carbon-negative by 2030. That AI expansion has helped boost the tech giant’s emissions by 30% since 2020. More than 96% of the company’s emissions are Scope 3, or indirect, and materials like cement used in data center construction make up a big share of them.
It’s Microsoft’s first time doing a deal like this for building materials, though the company and others have used the same approach for sustainable aviation fuel and renewable energy. Called an environmental attribute certificate, it allows the purchasing company to make a sustainability claim based on environmentally friendly goods – like clean jet fuel, renewable electricity or low-carbon cement – that it didn’t use directly. But these certificates often promise more than they deliver, research shows.
“Our priority, first and foremost, is always buying and installing low-carbon materials physically that are already on the market today,” said Katie Ross, Microsoft’s director of carbon reduction strategy and market development. “But the challenge is they don’t exist at the scale or in all of the locations that we need to procure today.”
The companies declined to say how much the deal is worth.
The challenges of green cement
It’s not just a Microsoft problem. Although cement accounts for about 8% of global emissions, it’s hard to decarbonize partly because construction is a risk-averse industry with thin margins and high safety standards, according to Nik Sawe, a senior policy analyst in the industry program at Energy Innovation Policy and Technology LLC, an energy and climate think tank. That means construction companies have been reluctant to take up cement alternatives developed by startups, which are cleaner but also currently more expensive and untested in the real world.
At its 250-ton-per-year pilot plant in Somerville, Sublime has reduced emissions by 90% compared to traditional cement, according to Chief Executive Officer and Co-Founder Leah Ellis. Sublime will start delivering on its deal with Microsoft when its first 30,000-ton commercial plant is operational. It’s slated to be completed in 2027.
Cement is heavy, and transporting it over long distances doesn’t make sense economically, Ellis said. The deal allows Microsoft to support the scale-up of Sublime’s technology even if it doesn’t have a construction project near the startup’s plant, she added.
Do environmental attribute certificates work?
In the past, some of these certificates have supported renewable projects that would have been developed anyway, meaning they didn’t help bring additional wind and solar online as promised, studies show. Microsoft has said it plans to phase out its use of unbundled renewable energy certificates in future years.
If deals like the one the company signed with Sublime proliferate, the clean cement industry will need to prove that the certificates it is offering are verifiable and avoid carbon emissions that manufacturers would have generated otherwise, according to a 2024 report on structuring demand for lower-carbon materials co-published by RMI and Microsoft. That includes ensuring that the products’ environmental benefits aren’t double-counted, or claimed by multiple entities as a reduction on their emissions ledger.
“Checks must be in place along the way to increase confidence that every purchase of a certificate will deliver its expected outcome,” the report’s authors wrote.
For this deal with Microsoft, other customers who buy Sublime’s cement won’t be able to lay claim to its environmental benefits, Ellis said.
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