Learn how Carbon Direct puts technical diligence into practice to assess high-quality carbon removal projects.
Last updated Mar 17, 2025
Introduction
In 2024, BTG Pactual Timberland Investment Group (TIG) announced that Microsoft signed the world’s largest known carbon removal credit transaction to date: a 20-year agreement for up to 8 million tonnes of restoration and reforestation credits from TIG. This deal marks Microsoft’s third forward offtake deal in Brazil this year, after Mombak and re.green, driving the delivery of over 16 million tonnes of high-quality, nature-based carbon removal in the region. Combined with the forward offtake deals of engineered projects like Stockholm Exergi and Ørsted in 2023, these agreements bring Microsoft’s two-year total to over 20 million tonnes.
That is no small feat. These deals will accelerate high-quality carbon removal projects and help build collective demand by example. And, behind each of those deals is the critical piece that gave Microsoft the confidence to invest in these projects and trust that they will deliver the stated number of credits over time with real climate impact: technical diligence.
What is technical diligence for carbon removal projects?
Technical diligence is a pre-purchase, in-depth assessment of carbon removal projects. Technical diligence helps to directly inform buyer decision-making in carbon removal procurement, as a part of their broader climate action strategy, by evaluating:
The design, development, and management strategies required to produce high-quality credits.
Any potential quality or delivery risks for mitigation over the lifetime of the projects.
Technical diligence requires extensive scientific expertise in order to assess the specific technologies, management strategies, and impacts of various carbon removal verticals. Whether it is an engineered project like direct air capture (DAC) or a nature-based project like reforestation, technical diligence involves leveraging both desk- and field-based research to validate project benefits and mitigate potential harms with confidence.
Carbon Direct’s approach to technical diligence
Carbon Direct’s technical diligence has become the go-to for the world’s climate leaders, including Microsoft. Our technical diligence process builds upon the Criteria for High-Quality Carbon Dioxide Removal, a set of science-based benchmarks developed and updated annually in collaboration with Microsoft since 2021.
Carbon Direct uses the Criteria’s essential principles as the foundation for comprehensive project assessments. We have the deep domain expertise to apply the Criteria to the unique profile of each individual project, leading to robust, nuanced, and highly specialized project evaluations.
Our technical diligence process expands our Criteria by conducting a combination of desk- and field-based diligence on project design, management and execution, carbon removal technology, community engagement strategy, and more. This involves:
Evaluating project design, operational risk, and management strategies.
Analyzing carbon removal technologies in greater depth; typically including site visits, interviews, and collaboration with in-country experts.
Conducting a policy landscape analysis to confirm regulatory approval.
Testing feasibility under various financing and carbon market scenarios, when project finance is involved for CDR development.
Identifying ecosystem and community impacts, and validating ecosystem and community benefits.
The outcomes of this analysis are detailed in a comprehensive report that documents project strengths and weaknesses, proposes risk mitigation measures, and provides actionable recommendations for project improvements over time. This report also lays the groundwork for ongoing project assurance to ensure credit delivery.
In the field: technical diligence for BTG Pactual Timberland Investment Group
In conducting technical diligence for TIG and its project, The Restoration Fund, Carbon Direct scientists visited multiple locations in Brazil and Uruguay to evaluate the methodology being used, identify potential project risks, and provide actionable recommendations on how to mitigate those risks over time. The site visits included time at operational eucalyptus plantations and prospective locations for future reforestation and conservation.
The Restoration Fund is one of the largest and most complex reforestation projects our experienced forest scientists have encountered, and as such, required expertise across multiple fields and disciplines to conduct technical diligence. Together with TIG scientists, forest managers, and analysts, Carbon Direct scientists investigated an entirely new set of scientific and economic questions posed by this project given its scale and design, such as:
For a project with commercial forestry, native species restoration, and conservation areas, how can additionality be assessed and which carbon pools should be counted as additional?
What is the feasibility of consistent project development across multiple ecoregions in South America and can such an approach lead to efficiencies?
How can a yet-to-be-tested carbon removal methodology be empirically tested prior to credit issuance?
The answers to these questions resulted in a greater appreciation for TIG’s reforestation efforts, as well as its ability to execute a science-based carbon removal program that delivers benefits for climate, nature, and local communities. In collecting the findings in the technical diligence report for Microsoft, Carbon Direct scientists focused on summarizing the outcomes of various carbon finance scenarios to assess financial additionality across Brazil and Uruguay, confirming TIG had the on-the-ground expertise needed to execute at scale, and generating custom geospatial analyses. The results of all of the above predict the successful development and delivery of high-quality carbon removal credits with a high degree of confidence.
Broadening the aperture: the role of technical diligence in carbon removal procurement
TIG is just one, albeit monumental, example of the role of technical diligence in carbon removal procurement. Science-based and commercial analyses are critical to informing the buyer’s decision-making process and safeguarding against potential project pitfalls—whether they are quality, reputation, or delivery-related. Without that layer of informed protection, a buyer can run the risk of misallocating their carbon finance and failing to deliver on their voluntary or mandatory climate commitments. And, beyond the initial diligence, it is critical to have a trusted technical collaborator that can assess ongoing risks and opportunities, conduct rigorous monitoring and reporting, and support operational execution across the entire project lifecycle. Carbon removal projects are complicated and require active participation, collaboration, and analysis, often years after the initial deal is signed.
Technical diligence also benefits suppliers of carbon removal by collectively identifying key areas for improvement, and allowing them to collaborate with buyers to further enhance projects so that they meet selection criteria. Altogether, using detailed, technology-specific quality criteria can help ensure that, whether via bespoke procurement or in pre-vetted portfolios, all actors can drive materially better outcomes that translate to measurable climate impact.
