July 23, 2025, 11:15 am | Read time: 3 minutes
Microsoft has signed a contract with U.S. waste management company Vaulted Deep to offset its carbon emissions. Over a period of 12 years, 4.9 million tons of manure, treated wastewater, paper sludge, and agricultural byproducts are to be buried underground. Microsoft is paying a hefty sum for this.
Microsoft Spends Billions on Waste Disposal
As announced by Vaulted Deep in a press release, the new contract runs until 2038. The company removes carbon by storing non-toxic organic waste “ultra-deep” underground. This includes sewage sludge, manure, paper sludge, and food and agricultural residues that cannot be reused or safely spread on fields.
Vaulted Deep collects waste from municipalities, industrial operations, and agricultural producers. It uses an injection process known from the oil industry to pump the waste in sludge form thousands of meters deep into stable geological formations. These are sealed by impermeable rock layers to prevent carbon from escaping. This prevents the materials from ending up in landfills, where they would release climate-damaging CO2 and methane.
Currently, disposing of one ton of waste at Vaulted Deep costs between 400 and 444 U.S. dollars. Calculated for 4.9 million tons, this amounts to up to 2.18 billion U.S. dollars. However, neither Vaulted Deep nor Microsoft has disclosed the actual contractually agreed sum. Vaulted Deep CEO Julia Reichelstein reportedly told the trade magazine “Inc.” that the current price does not reflect what Microsoft paid. Additionally, it is expected that costs will decrease over time. Yet, even if Microsoft pays only half of the current per-ton price, it still amounts to billions.
Climate Strategy for Energy-Intensive Data Centers
In April, Microsoft signed its largest contract to date to capture 6.75 million tons of CO2 with AtmosClear. The current deal with Vaulted Deep is part of a growing list of partnerships aimed at offsetting the massive emissions of increasingly energy-hungry data centers.
Microsoft’s server farms consume enormous amounts of electricity, often still from fossil sources. To reduce CO2 emissions, Microsoft, Google, Amazon, Oracle, and others are increasingly investing in research on small modular reactors.
At the end of 2024, U.S. energy provider Constellation Energy announced that it would restart Reactor Unit 1 of the Three Mile Island plant in Pennsylvania in partnership with Microsoft. Microsoft needs the energy for its data centers, which are consuming more power due to the increasing use of artificial intelligence.
The plant was the site of the largest nuclear disaster in U.S. history in 1979, when a partial meltdown occurred in Reactor Unit 2. Constellation had taken the unaffected Reactor Unit 1 offline in 2019 for economic reasons.