Chestnut Carbon, a nature-based carbon removal company, has inked a new, long-term agreement with Microsoft to provide the tech giant with removal credits from its projects in Arkansas, Texas and Louisiana.

Why it matters: The 25-year offtake agreement is among the largest U.S. afforestation, reforestation, and revegetation (ARR) projects to date.

• It demonstrates growing interest in nature-based solutions from large buyers of carbon-removal credits.

Driving the news: The new deal, the financials of which were not publicly disclosed, would deliver over seven million tons of carbon removal credits to Microsoft, Chestnut CEO Ben Dell told Axios in an interview.

• This would put it just behind a deal Microsoft struck with Brazilian investment bank BTG Pactual's forestry arm for 8 million carbon offset credits, which ranked as the largest such purchase to that date.
• The new agreement would involve the restoration of 60,000 acres of land by planting more than 35 million native, biodiverse hardwood and softwood trees, which would then capture and store carbon as they grow and mature.

The deal amounts to Microsoft's second-largest offtake agreement in its carbon dioxide removal portfolio, according to Brian Marrs, senior director for energy and carbon removal at Microsoft.

• It illustrates the steps that some tech companies are taking to reduce carbon emissions at a time of increasing energy use from AI-related data centers.

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