Microsoft Slashes Carbon Removal Purchases Amid AI-Driven Emissions Spike

Microsoft has significantly reduced its purchases of carbon removal credits by about 80% to 8.55 million metric tons through mid-July, according to a report by BloombergNEF. This decrease could mark Microsoft's first annual retreat from the carbon removal market since 2023.

The move comes as the tech giant ramps up spending on artificial intelligence (AI), which has led to a 25% increase in its emissions last year due to growing electricity demand and slow rollout of cleaner energy solutions.

Microsoft's AI expansion is putting pressure on the company's climate targets, with the tech giant competing aggressively with other hyperscalers to expand their AI operations. The company's influence means changes in its buying activity can have a significant effect on the wider market, where global carbon removal credit sales reached 18 million metric tons through mid-July, down 66% from 2025 levels.

In response to Bloomberg's report, Microsoft stated that purchasing removal credits represents just one part of its broader decarbonization strategy. The company emphasized that any adjustments made are part of a disciplined approach and not a change in ambition.