AI could trigger new demand for carbon-removal sector, report says

illuminem summarises for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:

🗞️ Driving the news: The rapid expansion of artificial intelligence is expected to boost demand for carbon removal credits, as energy-hungry data centers drive up emissions, according to a new report by the UK Carbon Markets Forum and the City of London Corporation

🔭 The context: AI growth is accelerating electricity demand, with data centers projected to consume up to 4.4% of global power by 2035, up from around 1.5% in 2024
• Major tech players like Microsoft, Google, and Meta have already seen emissions surge as they scale infrastructure
• While this could increase reliance on carbon removal credits, some companies are prioritizing direct emissions reductions, creating uncertainty around future demand in the offset market

🌍 Why it matters for the planet: The AI boom risks locking in higher emissions due to energy-intensive computing, but it could also unlock investment in carbon removal technologies
• The balance between real emissions cuts and reliance on offsets will be critical to ensuring credible climate progress

⏭️ What’s next: The carbon removal market is expected to grow significantly, but its trajectory depends on whether companies lean into offsets or focus on decarbonizing operations directly
• Policy frameworks and corporate strategies will shape how credible this market becomes

💬 One quote: “Rapid emissions growth driven by AI data centers is expected to increase near-term demand for carbon-dioxide removal credits.” — UK Carbon Markets Forum report

📈 One stat: The global carbon credit market could grow from $1.4 billion today to nearly $268 billion by mid-century

See on illuminem's Data Hub™ the sustainability performance — carbon credit purchases, total emissions, and climate targets of thousands of companies

Click for more news covering the latest on carbon removal