Microsoft Reports 25% Jump in Carbon Emissions

Microsoft's greenhouse gas emissions increased by roughly 25% in the past fiscal year, the company disclosed in its latest sustainability report released Thursday. In a blog post, Microsoft Vice Chair and President Brad Smith and Chief Sustainability Officer Melanie Nakagawa attributed the rise “primarily to the expansion of our datacenter infrastructure.”

The report follows similar ones from Google and Amazon, which showed 18% and 16% emission increases respectively. These figures highlight a troubling trend among tech giants as they race to build power-hungry data centers to support artificial intelligence.

A significant portion of Microsoft's increase came from Scope 2 emissions – those from purchased energy – which accounted for 13% of total emissions. While Microsoft says it matched 100% of its electricity consumption with carbon-free sources, data center construction is set to accelerate.

Since the end of the covered fiscal year (June 2025), Microsoft has made several deals that could further increase emissions. The company announced a partnership with Chevron to build a gas-fired power plant to supply a data center in West Texas, potentially emitting over 11.5 million tons of CO₂ equivalent annually – more than the entire state of Rhode Island. Microsoft also leased space at the Stargate campus in Abilene, Texas, where an on-site power plant could emit over 7.8 million tons yearly. Additionally, it signed a nonbinding letter of intent for computing capacity at a West Virginia data center powered by off-grid gas, with potential emissions exceeding 11 million tons annually.

Microsoft has changed its approach to offsetting emissions, stopping the purchase of unbundled renewable energy certificates (RECs), which have been criticized as greenwashing. Danny Cullenward, a researcher at the University of Pennsylvania, called this move “highly commendable,” noting that long-term power purchase agreements can bring new clean electricity online.

Despite the emission spike, Microsoft reaffirmed its goal to become “carbon negative” by 2030. Smith and Nakagawa acknowledged that the global race for AI is increasing demand for energy, water, land, and materials, and said the company has a responsibility to ensure technology strengthens rather than strains the systems and communities it depends on.