Microsoft Emissions Surged 27% as AI Buildout Outran Climate Goals

Microsoft’s greenhouse gas emissions rose 27 percent in the fiscal year ending June 30, 2025, reaching 21.1 million metric tons of carbon dioxide equivalent, in a disclosure that lands against the company’s 2020 carbon negative by 2030 pledge. The figures, disclosed Thursday in the 2026 Environmental Data Fact Sheet, show the AI buildout is now outrunning the climate commitments tied to it. Microsoft’s report lands alongside similar sustainability disclosures from Google and Amazon that show the same shape of inflation in their footprints.

For the first time in at least six years, Microsoft’s emissions intensity rose. It climbed to 75.0 mtCO2e per million dollars of revenue, up from 68.1 a year earlier, even as revenue grew 15 percent to $281.7 billion. The trajectory means each dollar of revenue now comes with more carbon than the year before. The company also acknowledged in the same document that the shift has “temporarily” knocked it out of its own carbon-neutral accounting position.

The 27% Number

Microsoft’s latest disclosure lands a year after rival hyperscalers began reporting the same shape of inflation in their footprints. Total emissions reached 21.1 million mtCO2e in the fiscal year ending June 30, 2025, up from 16.7 million the prior year, per the 2026 Environmental Data Fact Sheet. All three companies acknowledged in their respective sustainability reports that AI infrastructure expansion is outpacing their decarbonization work. The 27 percent figure arrived in the same Microsoft document that reaffirmed the company’s 2030 carbon-negative pledge. The new data tells investors, regulators, and the UN where the company stands against that goal.

The jump cuts the distance between Microsoft’s reported footprint and its 2030 carbon-negative pledge by years. Each year that emissions rise, the removal work the company has to fund to keep its accounting flat becomes more expensive, and the 2030 timeline tightens. Microsoft’s interim target of matching 100 percent of its global electricity consumption with renewable energy hit its 2025 milestone. The harder number now is what comes next, against an enterprise AI program that has just rolled out the $2.5 billion Frontier Company deployment bet.

What Drove the Scope 2 Surge

The clearest mechanism behind the jump is a tenfold surge in Scope 2 market-based emissions tied to purchased electricity. That figure climbed from 259,090 mtCO2e to 2.7 million mtCO2e in a single year. The category is now 13 percent of Microsoft’s total footprint, up from nearly 2 percent a year earlier.

The clearest signal of which direction the line is moving is Microsoft’s July 9 framing of its 2026 environmental report. The company says pausing purchases of “non-additional, unbundled renewable energy certificates” raised its reported emissions in the near term. The certificates had allowed the company to claim renewable electricity it had not added itself.

That step removes a layer of accounting that had been hiding electricity the company has been drawing from grids that are not running on additional clean power. With the layer removed, the reported emissions number is closer to the actual emissions number. The tenfold jump is the gap between the old accounting and the new one, with the rest of the increase coming from the data center buildout itself.

Microsoft Lets the Offsets Expire

Microsoft stopped buying two kinds of climate instruments in February 2025: “spot” energy attribute certificates and carbon removal credits. Both had previously been used to keep the company’s reported total in line with its own carbon-neutral accounting target. The step is the single largest accounting change Microsoft has made since it announced the carbon-negative commitment in 2020.

Microsoft attached a short note to the disclosure explaining the change. The note set out the reasoning behind ending the purchases and acknowledged what the change would mean on paper. The reasoning and the consequence both sit inside the same document, on the same day, as the carbon-neutral accountability shift. The next paragraph delivers the company’s own words on the shift.

reflected a commitment to high-integrity climate action, acknowledging it would temporarily move us out of a carbon-neutral position.

Microsoft’s own framing in the July 9 foreword to its 2026 environmental sustainability report is that the unbundled certificates were not bringing net new clean power to grids. The 40 gigawatts of renewable energy supply the company has contracted across 26 countries, reported in Microsoft’s February carbon negative milestone update, is the alternative path. Stopping the certificate purchases raises the reported number now and widens the gap between the disclosed total and the 2030 target. The company says the change “will create more long-term sustainability benefits” over the longer horizon. Microsoft has not revised its 2030 carbon-negative pledge, and the new disclosure data set is now the most direct read on data center power the company has ever published.

Without the offsets, the reported number is closer to what the grid and the data centers are emitting. The 21.1 million mtCO2e printed on Thursday is the most legible version of Microsoft’s footprint in five years. The data center buildout driving the rise is the same one Microsoft says will continue as long as AI demand does.

The Water Bill Climbed in Step

Water consumption climbed 22 percent in the same period to 8,170 megaliters, the same data set shows. Half of all withdrawals came from areas classified by Microsoft as having high or extremely high water stress. The cooling load of new AI data centers is the principal driver, even though Microsoft does not state that explicitly.

The water number compounds the carbon story because the two resources are linked: a data center that draws electricity from a stressed grid also tends to draw water from a stressed watershed. The UN has separately projected that by 2030, AI data centers globally could use enough water to meet the basic needs of all 1.3 billion residents of sub-Saharan Africa for an entire year.

Same Story Across the Hyperscalers

Last week’s disclosures from Google and Amazon pointed in the same direction with numbers in the same order of magnitude. Google’s greenhouse gas emissions rose 18 percent year over year in 2025, its largest annual increase on record. Amazon’s rose 16 percent, to about 81 million metric tons and 58 percent above its 2019 baseline.

Google’s own report puts AI hardware manufacturing (chips and servers) at the top of its driver list, alongside the electricity those chips consume once they are racked in data centers. Amazon attributes its 34 percent jump in emissions from purchased electricity to data center growth and the fuel used by its delivery network. All three companies now point to AI infrastructure buildout as the cause of the rise. Microsoft matches the others on the per-dollar metric. Each of the three companies now pollutes more for every dollar of revenue than it did a year earlier.

The shape of the next four quarters is now the live question: whether the data center buildout pace slows, or whether the decarbonization work catches up. The same answer will decide whether the 2030 pledges survive.

Guterres Asks AI Vendors to Come Clean

UN Secretary-General António Guterres launched an AI Environmental Transparency Initiative at London Climate Action Week on June 23. He called on “every major AI company” to measure and publicly disclose the full environmental impact of their data centers, measured in carbon, water, and land use. His framework matches the demand that Microsoft’s disclosure now meets in part.

He also asked them to commit to powering every data center with renewable energy by 2030. His framing of the trade-off is blunt, in remarks delivered in London and covered in the UN secretary-general’s London Climate Action Week address.

If AI is to help build a better future, it must be honest about what it costs us now.

The context is a UN finding issued earlier this month that data centers worldwide use so much energy that only 10 countries each consume more. US data center electricity consumption is projected to grow 300 percent over the next 10 years and account for 38 percent of net US electricity consumption by 2037, according to the National Electrical Manufacturers Association. The Microsoft disclosure lands inside the same month as the UN’s ask and shares the offset-trimming trend visible across all three hyperscalers.

Microsoft’s 2030 carbon-negative pledge, first announced in January 2020, now has to absorb both a tenfold jump in Scope 2 and a 22 percent rise in water withdrawals in a single fiscal year. The disclosure also moves the company closer to what the UN has asked AI vendors to provide: a transparent reading of the data center footprint. Microsoft has not moved its 2030 deadline.

Frequently Asked Questions

Why did Microsoft’s emissions jump 27% in fiscal year 2025?

Microsoft disclosed 21.1 million metric tons of carbon dioxide equivalent for the fiscal year ending June 30, 2025, up from 16.7 million the year prior, in its 2026 Environmental Data Fact Sheet. Microsoft attributed the rise to a February 2025 decision to stop buying spot energy attribute certificates and carbon removal credits, alongside the AI infrastructure buildout.

What is the carbon negative by 2030 pledge and is it still in place?

Microsoft set the carbon negative commitment in January 2020 with the aim of removing more carbon from the environment than it emits by 2030. The company continues to affirm the pledge in its July 9, 2026 environmental report foreword. The current fiscal year disclosure shows the gap between the reporting line and the pledge has widened.

Why did Scope 2 emissions rise tenfold?

Market-based Scope 2 emissions tied to purchased electricity climbed from 259,090 metric tons to 2.7 million metric tons in fiscal 2025, Microsoft’s data shows. Microsoft’s framing in its July 9 foreword is that the company stopped buying unbundled renewable energy certificates, which it describes as not bringing net new clean power to grids.

What did the UN ask AI companies to do?

UN Secretary-General António Guterres launched an AI Environmental Transparency Initiative at London Climate Action Week on June 23 and called on every major AI company to measure and publicly disclose the full environmental footprint of their data centers (carbon, water, and land) and to commit to powering every data center with renewable energy by 2030.

How do Microsoft, Google, and Amazon compare on 2025 emissions?

Google reported an 18 percent year-over-year jump in greenhouse gas emissions in 2025, its largest annual increase on record. Amazon reported about 81 million metric tons, up 16 percent year over year and 58 percent above its 2019 baseline. Microsoft, Google, and Amazon each attributed the increases to AI infrastructure buildout, and all three reported rising emissions intensity per dollar of revenue.