Microsoft's AI drive saw its carbon emissions grow by 25 percent in 2025

Published 10 July 2026 · tech

Microsoft's carbon emissions grew 25 percent year over year in 2025, the company has revealed in its 2026 environmental sustainability report. The report covers the

Microsoft's carbon emissions grew 25 percent year over year in 2025, the company has revealed in its 2026 environmental sustainability report. The report covers the company's 2025 fiscal year and measures its progress against its 2020 baseline. Microsoft says this growth in emissions is mostly caused by the expansion of its investments in AI data center infrastructure. As GeekWire notes, Microsoft seems to be moving in the opposite direction of where it wants to go in order to achieve its goal. The company announced in 2020 that it plans to be carbon negative, or to remove more carbon from the atmosphere than it creates, by 2030.

It only has four more years to get there. "While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand," it admits. The company knows it has to refine its "strategies as conditions change, data improves, and tradeoffs become clearer." Microsoft says that it's not lowering its ambitions because AI demands are outpacing sustainability solutions. In which case, the company has a lot of work ahead of it. "We continue to really be focused around carbon negativity by 2030," Melanie Nakagawa, chief sustainability officer, told GeekWire.

In addition to AI infrastructure buildouts, another reason why Microsoft reported a 25 percent yoy growth in carbon emissions, is because it stopped buying unbundled renewable energy certificates. One certificate signifies that an entity owns one megawatt-hour of zero-carbon electricity generated by a renewable source and delivered to the grid. Microsoft says its decision increased its reported emissions in the near term, but it enables the company to focus on adding all forms of carbon-free electricity to the grids where it operates rather than just on relying on certificates. "We believe this change will create more long-term sustainability benefits," it wrote.

While it admits to emitting more carbon in its report, Microsoft also highlights its successes for the fiscal year of 2025. It says it matched 100 percent of its annual global electricity consumption with renewal energy. The company also replenished more water than it withdrew globally, which pushes the company closer towards achieving its goal to become water positive by 2030.