Microsoft cuts carbon removal buying 80% as AI emissions put climate goals under pressure

illuminem summarises for you the essential news of the day, reviewed by our editorial team. Read the full piece on Carbon Credits or enjoy below:

🗞️ Driving the news: Microsoft has sharply reduced its carbon removal purchases in 2026, buying around 80% fewer carbon removal credits through mid-July than during the same period last year, as the company faces rising emissions from AI infrastructure expansion

🔭 The context: Microsoft’s emissions increased 25% in fiscal 2025, reaching around 20 million tonnes of CO₂e, largely due to growing data centre demand and AI-related electricity consumption
• The company previously became one of the world’s largest carbon removal buyers, signing deals for 45 million tonnes of removals in 2025 across nature-based solutions, biochar, carbon mineralisation and engineered technologies
• Microsoft still aims to become carbon negative by 2030 and remove all historical direct and electricity-related emissions by 2050

🌍 Why it matters: Microsoft’s shift highlights a broader challenge facing the tech sector: rapid AI growth is increasing energy demand and making climate targets harder to achieve
• A slowdown from one of the biggest buyers could affect the emerging carbon removal market, pushing developers toward higher-quality projects with stronger climate impact verification

⏭️ What’s next: Microsoft’s ability to meet its climate goals will depend on scaling clean electricity, reducing data centre emissions, and maintaining investment in credible carbon removal solutions as AI growth accelerates

📈 One stat: Microsoft’s energy use increased 168% since 2020, while its revenue grew 71%, highlighting the growing challenge of decoupling AI-driven growth from emissions

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