Microsoft has signed a carbon removal agreement with Gaia, a joint venture between Copenhagen Infrastructure Partners (CIP) and Vestforbrænding, for 2.95 million tons of carbon removal credits.

The credits will be generated from Gaia’s Energy from Waste (EfW) carbon capture storage (CCS) retrofit at its EfW facility in Nordhavn, Hovedstaden, Denmark. The EfW facility is the largest in Denmark, handling approximately one million tons of waste annually, of which 39 percent is incinerated.

Through the CCS system, the partners aim to capture up to 500,000 tons of CO2 every year. The captured carbon will subsequently be transported and stored underground, with a portion used to contribute to Vestforbrænding’s carbon neutrality goals, and the remaining offered as carbon credits to offtakers.

The removal credits will commence delivery from 2029, and represent the biogenic portion of CO2 captured and stored. Biogenic carbon is carbon emitted by organic matter, such as plants, animals, and soil. As a result, the captured carbon will be considered negative emissions. The project is expected to reach operational status in 2026, provided it obtains the necessary funding and approvals.

“Gaia’s approach of retrofitting waste-to-energy facilities—in combination with the enforcement of the EU Waste Framework Directive—helps unlock more carbon-free energy while ensuring waste prevention and recycling remain top priorities,” said Brian Marrs, senior director of Energy & Carbon Removal at Microsoft. “We’re pleased to see experienced developers like Copenhagen Infrastructure Partners, through its Energy Transition Fund, entering the carbon removal market and look forward to ongoing collaboration.”

The agreement is the first between Microsoft and CIP, and according to Nikos Samaritis, MD of CIP’s Energy Transition Fund, “represents the start of a long-term relationship between the parties.”

In addition to the generation of carbon credits, the retrofit will allow the EfW facility to expand its district heating capacity, supplying heat to more than 10,000 homes in the local area.

“The offtake agreement with Microsoft is a defining milestone for the Gaia project. It not only validates the technical and commercial maturity that Vestforbrænding has worked hard to establish but also reflects how this maturity has been further strengthened through CIP’s entry into the project,” said Steen Neuchs Vedel, CEO, Vestforbrænding.

CIP owns a majority stake in the JV through its CI ETF I, which it acquired at the start of the year. In addition, the companies have entered into a flue gas agreement, where Vestforbrænding supplies flue gas from waste incineration and the joint venture company carries out CO2 capture.

In May, the project was pre-qualified for participation in the Danish Energy Agency’s Carbon Capture and Storage Fund. The final selection for the subsidy awards is expected late this year.

Microsoft has signed several deals with carbon capture retrofit projects in 2025 so far, demonstrating an increasing commitment to the sector. Earlier this month, the company signed an agreement with Hafslund Celsio to purchase 1.1 million tons of carbon removal credits from a CCS project at Hafslund’s EfW plant Celsio, in Oslo. The plant, which processes around 350,000 tons of residual waste every year, is being retrofitted with a CCS system, with operations expected to begin in 2029.

Before this, in April, Microsoft signed a deal with CO280 to purchase 3.685 million tons of carbon credits over a 12-year period. CO280 retrofits existing pulp and paper mills with CCS to capture biogenic carbon from boiler stack emissions for permanent storage.