Microsoft’s greenhouse gas pollution increased by roughly 25 percent last year, the company disclosed in its new sustainability report released Thursday. The rise is primarily driven by the expansion of its datacenter infrastructure to meet surging demand for AI compute, according to a blog post by Microsoft vice chair and president Brad Smith and chief sustainability officer Melanie Nakagawa.
The Scale of the Increase
Emissions tied to energy the company purchased or acquired to run its operations—known as Scope 2 emissions—accounted for 13 percent of Microsoft’s total. The report covers the 2025 fiscal year, which ended last June. Microsoft highlighted that it had matched 100 percent of its electricity consumption with carbon-free sources, but the data center build-out is set to accelerate.
Industry-Wide Emissions Surge
The report follows similar ones released by Google and Amazon last week. Amazon disclosed a 16 percent increase in its CO2 emissions, while Google said its annual greenhouse gas emissions rose 18 percent last year compared to 2024—the biggest single-year increase it has recorded. Together, the disclosures show a troubling trend of rising tech company emissions driven by the global race to build out power-hungry data centers.
| Company | Emissions Increase | Key Driver |
|---|---|---|
| Microsoft | 25% | Datacenter infrastructure expansion, Scope 2 up 13% |
| Amazon | 16% | Overall CO2 increase (per sustainability report) |
| 18% | Biggest single-year increase; added fossil fuel for some data centers |
Fossil Fuel Power Deals
Microsoft has made a number of deals since the fiscal year ended involving gas-powered data centers. Last month, the company officially announced a partnership with Chevron, which is building a power plant to supply a future data center in West Texas. Permits show that power plant could emit more than 11.5 million tons of CO2 equivalent annually—an amount greater than the entire state of Rhode Island. Microsoft has also leased buildings on the Stargate campus in Abilene, Texas, which will be powered by an onsite power plant that could emit more than 7.8 million tons of CO2e each year. Additionally, it signed a nonbinding letter of intent for compute at a West Virginia data center that would be powered by off-grid gas and could emit more than 11 million tons of greenhouse gases.
“Microsoft’s strategy includes exploring a variety of options for mitigating the emissions from its electricity consumption, consistent with our sustainability ambitions,” Nakagawa said in a statement to WIRED.
Shifting Offset Strategy
Microsoft stopped purchasing unbundled renewable energy certificates (RECs), a move that contributed in part to the rise in Scope 2 emissions. Unbundled RECs have been criticized as greenwashing because they don’t necessarily add more clean power to the grid. Danny Cullenward, a researcher at the University of Pennsylvania, called them “a paper transaction that is physically disconnected from real-world consequences.” Cullenward, who is also a visiting faculty member at Google but was not speaking on behalf of the company, added: “I think it's highly commendable that [Microsoft] is moving away from unbundled RECs and prioritizing investments in new clean electricity, where power purchase agreements and other long-term offtake agreements can and do cause new clean electricity to come online.”
2030 Carbon-Negative Goal Remains
Despite the rise in emissions and its continued investments in AI, Microsoft still says it plans to become “carbon negative” by 2030. Smith and Nakagawa wrote that the global race for AI is “increasing demand” for data centers. The coming years will test whether the company can reconcile its AI ambitions with its climate commitment.
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