Microsoft's Carbon-Removal Purchases Fall 80% During AI Buildout
BloombergNEF calculated that Microsoft bought 8.55 million metric tons of carbon-removal credits through mid-July 2026, about 80% less than in the same period of 2025 and its first market retreat since 2023. Microsoft's July sustainability report says total Scope 1, 2 and 3 emissions rose 25% year over year, driven mainly by datacenter expansion and a pause in certain renewable-energy certificates.
BloombergNEF calculated that Microsoft bought 8.55 million metric tons of carbon-removal credits through mid-July 2026, about 80% less than in the same period of 2025. Bloomberg reported on August 13 that the change puts Microsoft on track for its first retreat since 2023 from a market it entered in 2020.
The comparison measures contracted removal volume during a partial year. It does not, by itself, show how much Microsoft spent, how many credits were delivered or retired, or whether purchases later in 2026 could change the full-year result.
Microsoft told Bloomberg that carbon removal is one of several approaches to its climate goals and that the lower purchasing pace did not represent a reduction in its stated ambition, according to Gizmodo's account of the BloombergNEF report. The company has been the market's largest buyer, so a large year-over-year change can materially affect demand visibility for removal developers.
Emissions rose as datacenter infrastructure expanded
Microsoft's official July 9 sustainability update provides the relevant company context. It says total Scope 1, 2 and 3 emissions increased 25% year over year in fiscal 2025, driven primarily by datacenter expansion and the company's decision to pause non-additional, unbundled renewable-energy certificates while prioritizing projects that add new power to grids.
That official explanation is more precise than attributing the entire increase to AI alone. Microsoft says AI infrastructure is increasing demand for energy, water, land and materials, but its reported emissions also reflect accounting choices and emissions across the broader company and supply chain. Scope 2 electricity emissions rose to 13% of Microsoft's total footprint from nearly 2% a year earlier, according to the company.
Gizmodo also reported that Microsoft expects roughly $175 billion in AI-infrastructure spending this year. The figure illustrates the scale of the buildout, but the available sources do not allocate emissions or carbon-removal purchases to individual models, products or datacenters.
What the procurement change means
Carbon removal is not interchangeable with every carbon credit. Durable-removal agreements finance projects intended to take carbon dioxide out of the atmosphere and store it, while avoidance credits and renewable-energy certificates use different accounting rules and address different parts of an emissions strategy.
For infrastructure and sustainability teams, the operational lesson is to keep those ledgers separate. Useful reporting should distinguish gross emissions, electricity-accounting instruments, contracted removal volume, delivered and retired tons, project durability, and spending. BloombergNEF's partial-year comparison is a meaningful market signal, but it is not proof that Microsoft has abandoned carbon removal or that procurement alone offsets the emissions pressure created by rapid datacenter growth.
Key Points
- 1BloombergNEF calculated that Microsoft bought 8.55 million metric tons of carbon-removal credits through mid-July 2026, about 80% less than in the same period of 2025.
- 2Microsoft reported a 25% year-over-year increase in total Scope 1, 2 and 3 emissions, driven mainly by datacenter expansion and pausing certain renewable-energy certificates.
- 3The partial-year purchase figure measures contracted removal volume, not spending, delivered or retired tons, or emissions attributable to individual AI workloads.
Scoring Rationale
The BloombergNEF calculation connects a major AI-infrastructure buyer's carbon-removal procurement with the emissions pressure of datacenter growth. It is relevant to teams tracking compute sustainability and carbon-accounting controls, although the available reporting does not allocate either emissions or removals to individual workloads.
Sources
Public references used for this report.
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