Weeks ago, Microsoft reportedly began telling suppliers and partners that it is pausing future purchases of carbon dioxide removal. And just today, Bloomberg broke the news that the company may be shelving its 2030 clean energy targets.
The company has denied both changes, and its existing agreements appear intact. But nonetheless, the news was disappointing for the wider carbon removal sector, in large part because Microsoft has made somewhere between 80% and 90% of all durable CDR purchases ever recorded.
The instinct in moments like these is to ask how that demand can be filled. What new corporates can we recruit to fill the gap? The more productive response, however, is to step back and ask a broader question: Across every climate technology that needs to scale, are corporations allocating their resources in a way that generates the most deployment?
The answer is no. Across the full suite of technologies needed to decarbonize the economy, from carbon removal to power grid modernization to low-carbon building materials, companies are spending real money on voluntary climate commitments while deploying comparatively little political capital in support of the policies that would actually bring those technologies to scale.
But if the goal is deployment at the pace that climate change requires, that allocation is backwards.
Voluntary demand
It would be wrong to dismiss what corporate buyers have accomplished in recent years. In many cases, they have been the only source of demand, keeping critical technologies alive.
Microsoft and the Frontier coalition (Stripe, Alphabet, Shopify, Meta, McKinsey) built the carbon removal market from nothing. Private sector CDR purchase commitments since 2021 total an estimated $10.5 billion. Total government CDR procurement worldwide, meanwhile, has seen approximately $45 million committed — but zero dollars actually spent, and zero tons purchased.
In the power sector, tech companies are now the primary source of new demand for clean firm generation. Google, Amazon, Microsoft, and Meta all have signed deals to purchase power from nuclear reactor restarts and advanced designs, and hyperscalers are increasingly eyeing geothermal as well.
Those bets extend to fossil fuel projects with carbon management attached. Last October, for example, Google signed a corporate offtake agreement for a first-of-a-kind commercial scale new-build gas plant integrated with CCS in Illinois.
Meanwhile, Microsoft signed a binding agreement with Sublime Systems to purchase up to 622,500 metric tons of green cement over six to nine years. The deal was the first long-term corporate offtake for low-carbon cement, and included a novel environmental attribute certificate structure modeled on the book-and-claim system used for sustainable aviation fuel.
Each of these commitments is valuable. They prove commercial viability, establish quality benchmarks, and give nascent suppliers the anchor revenue they need to move from pilot to demonstration, and ultimately to commercial scale. But they are also the product of companies with free cash flow that are interested in both corporate sustainability and social license. They depend on the priorities of individual executives, the sustainability budgets of individual companies, and the willingness of individual boards to spend money on technologies that aren’t yet competitive.
Today, though, the macroeconomic environment has changed. The era of discretionary capital is over due to the AI arms race, upward pressure on commodities due to the war in Iran, and a new political environment on climate.
Riding familiar waves
The history of energy technology in the United States tells a consistent story about what actually scales these technologies past the demonstration phase.
Solar power did not reach competitive costs because a handful of companies voluntarily purchased panels at above-market prices. It did so because Germany fronted the initial cost with feed-in tariffs, and then U.S. federal investment tax credit, state renewable portfolio standards, and net metering policies created sustained, bankable demand that attracted manufacturing investment, drove learning-by-doing, and pulled costs down by more than 90% over two decades.
Wind power followed the same trajectory, its growth tightly correlated with the availability and extension of the production tax credit.
In each case, early voluntary commitments played a role. But it was policy that drove the transition from demonstration to deployment, because policy can create the kind of durable, economy-wide demand signals that mobilize private capital at the scale that emerging technologies require.
The leverage gap
The economics of why policy advocacy is a higher-leverage use of corporate resources are straightforward.
When a company spends $1 billion on a voluntary clean technology purchase, the industry gets $1 billion in demand. When that same company successfully advocates for a tax credit, a procurement mandate, or integration into a compliance market, the resulting demand can be orders of magnitude larger, because the policy applies to every regulated or eligible entity, persists across budget cycles, and gives capital markets the certainty needed to underwrite longer duration investments.
Consider the Inflation Reduction Act. Its clean energy tax credits are projected to mobilize hundreds of billions in private investment over the coming decade, even after the reduction of those credits in the One Big Beautiful Bill Act. That dwarfs the cumulative voluntary clean energy purchasing of every corporation in the country combined.
The IRA was the product of years of sustained advocacy from NGOs, companies, trade associations, and stakeholders who made the economic and strategic case for clean energy incentives. The corporations that engaged in that advocacy generated far more deployment per unit of political effort than they could have achieved through their own procurement budgets alone.
Political capital, best capital
The argument is not that voluntary corporate climate spending is wasteful. Early buyers proved that these technologies work. They established quality standards. They gave startups the revenue to survive long enough to improve. That contribution has been important.
Instead, the marginal dollar and the marginal hour of executive attention would generate more deployment if directed toward policy advocacy than toward the next voluntary purchase agreement. This is true both for carbon removal — and for every other climate technology stuck between proof of concept and commercial scale.
This doesn’t uniquely apply to the tech companies and clean energy commitments. Any large industrial company with an interest in decarbonization or lower emissions have political credibility, lobbying infrastructure, and relationships with legislators that most advocacy organizations cannot match.
Permitting reform offers a prime opportunity to move clean energy goals forward in a higher-impact way than any corporate buying can do. For instance, reform that makes it easier and therefore cheaper to build transmission, geothermal, nuclear, renewables, and other forms of clean energy infrastructure will do orders of magnitude more to accelerate their deployment than any single data center PPA for an emerging clean firm technology.
We have been asking voluntary action to do a job that policy can do better. Every clean energy technology that has reached commercial scale in this country did so because policy created the conditions for sustained private investment. Carbon removal, nuclear, gas with CCS, and green cement will be no different.
Jack Andreasen Cavanaugh is the director of the carbon management program at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. The opinions represented in this contributed article are solely those of the author, and do not reflect the views of Latitude Media or any of its staff.
