Microsoft’s carbon emissions grow 25% driven by artificial intelligence
Microsoft faces a significant challenge in meeting its ambitious goal of becoming a carbon negative company by 2030. As revealed in the company’s annual sustainability report, released on Thursday, its emissions in 2025 showed a 25% increase compared to the previous period, indicating a deviation from the objective.
Despite this increase in emissions, the technology giant’s executives reiterate their commitment to the long-term goal of carbon neutrality.
“We maintain our focus on achieving negative carbon emissions by the year 2030,” said Melanie Nakagawa, the company’s director of sustainability, in a statement.
The Redmond, Washington company joins other giants in the sector that see their climate goals moving further away, mainly due to heavy investment in high-energy consumption data centers to support the advancement of artificial intelligence. Amazon’s carbon footprint, for example, increased by 16% in the last year, and Google’s greenhouse gas emissions jumped by 18%.
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The document also details that energy consumption was a crucial factor in this increase, with Microsoft’s total electricity demand recording a 24% growth last year.
In 2025, Microsoft generated a total of 34 million metric tons of carbon dioxide equivalent. After deducting the carbon for which removal from the atmosphere was paid for, the net value was 20 million tons, a volume comparable to the total emissions of countries such as Panama or Lithuania.
In addition to the expansion of data centers, Nakagawa explained that the increase in carbon emissions was influenced by Microsoft’s choice to suspend the acquisition of short-term renewable energy certificates (RECs). Such certificates are used by companies to quickly reduce declared annual emissions. The company, according to the director, now focuses on long-term actions that promise greater impact.
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The challenge that Microsoft intends to overcome, as she described it, involves adopting a “portfolio approach” that integrates carbon dioxide removal, emissions-free electricity, use of sustainable materials and fuels, addressing all of these fronts together, rather than in isolation.
Microsoft’s progress in areas of sustainability
The annual report also highlighted several notable advances, including:
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- Matching global electricity consumption with clean energy sources.
- Replenishing more freshwater than withdrawn globally, an important step towards achieving the goal of being “water positive” by 2030.
- Achieving, for the second consecutive year, a 92% reuse and recycling rate of inoperative servers and cloud components.
- Accumulation of 40 gigawatts in clean energy purchase contracts in 26 nations, with 19 gigawatts already in operation. This amount of energy is enough to power between 30 and 40 million homes in the United States.
Recent concerns about Microsoft’s climate commitments
The information released by Microsoft about sustainability comes against a backdrop of questions, following a series of news and announcements that raised concerns among climate activists.
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- The previous month, Microsoft and Chevron revealed an agreement to build a natural gas plant in Texas with 2.67 gigawatts of capacity, intended to provide exclusive power to the technology company for two decades.
- In May, it was reported that Microsoft was considering reducing or even canceling its pledge to offset its electricity consumption with carbon-free energy in full (24/7) by 2030.
- In April, it was published that Microsoft was suspending new purchases of carbon removal credits, after years of being a leader in this market.
Nakagawa clarified that no removal projects have been canceled by the company, but did not provide details about future acquisitions. “We continue to examine each business presented carefully,” he said, looking for “viable opportunities for expansion.”
When asked about Microsoft’s commitment to purchasing clean energy on an uninterrupted basis — a strategy to eliminate dependence on coal or gas when wind and solar sources are not available — Nakagawa did not confirm that the promise would be kept. “We are still exploring opportunities linked to carbon-free electricity”, while the company remains focused on carbon negative targets for 2030, he added.
Regarding the natural gas agreement, the sustainability director pointed out that Microsoft also established a contract to purchase 4.7 gigawatts of renewable energy in Texas, and that the company analyzes its energy investments as part of a comprehensive strategy.
Initiatives to reduce the environmental impact of data centers
Although data centers remain the main contributor to Microsoft’s increase in energy consumption and emissions, the company emphasizes that it is implementing other actions to mitigate the environmental impact of these infrastructures.
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Among these measures, we highlight the intensification of the use of steel and concrete with lower carbon emissions, in addition to the incorporation of solid wood in the construction of data centers. Last year, Microsoft also opened its seventh Circular Center, one of the global units where the company recycles and reuses electronic components from its data center operations.
Microsoft also collaborates with developers to optimize the use of artificial intelligence models and develop right-sized products. AI agents can inspect, test and improve codes so that they consume less energy to run, as explained by Nakagawa.
“I firmly believe there is an opportunity in this field,” she stated.
