Microsoft: AI Increases Its CO2 Emissions by 25%

Microsoft Faces Unexpected Increase in CO2 Emissions

According to the annual environmental sustainability report published by Microsoft in 2026, the company's CO2 emissions saw a significant increase of 25% in 2025 compared to the previous year. This report, which assesses progress made since the 2020 baseline, highlights the challenges the company faces in achieving its environmental goals.

The Impact of Artificial Intelligence on Emissions

The increase in Microsoft's emissions is primarily attributed to the expansion of its data centers dedicated to artificial intelligence. In its report, Microsoft acknowledges that AI is driving up demand for energy, water, land, and materials. However, sustainable solutions are not progressing quickly enough to offset this growing demand. The company emphasizes the need to adjust its strategies based on evolving conditions, improved data, and necessary trade-offs.

In 2020, Microsoft set the ambitious goal of becoming carbon negative by 2030, meaning it aims to remove more carbon from the atmosphere than it emits. With only four years remaining to achieve this goal, the task appears daunting. Despite this, Melanie Nakagawa, Microsoft's Chief Sustainability Officer, asserts that the company remains committed to reaching its ambitions.

Strategic Shift in Emission Calculations

In addition to expanding its infrastructure, Microsoft explains this increase by its decision to stop purchasing unbundled renewable energy certificates. These certificates ensure that an entity has financed the production of one megawatt-hour of decarbonized electricity injected into the grid.

By abandoning this practice, Microsoft accepts a temporary increase in its reported emissions. The company justifies this choice by prioritizing the direct addition of carbon-free electricity to the grids where it operates, rather than relying on offsets. Microsoft believes this approach will yield more sustainable long-term results.

Notable Progress Despite Challenges

Despite the rise in emissions, Microsoft highlights several achievements for the 2025 fiscal year. The company claims to have covered 100% of its global annual electricity consumption with renewable energy. Additionally, it reports having returned more water than it has withdrawn globally, with the goal of returning more water than the company consumes by 2030.

Although the overall assessment is mixed, Microsoft appears determined to continue its efforts to meet its environmental goals. Only time will tell if the American firm will succeed in this ambitious challenge.