Microsoft’s carbon-removal buying falls as AI emissions rise

Microsoft sharply reduced its purchases of carbon-removal credits in the first half of 2026, while its emissions rose amid growing electricity demand from AI. The shift puts a practical question behind the AI build-out: can companies keep expanding computing and meet their climate commitments at the same time?

Microsoft AI Watch analysis

What happened

Bloomberg reports that Microsoft bought 8.55 million tonnes of carbon-removal credits in the year to mid-July, around 80% fewer than over the same period in 2025, according to BloombergNEF calculations. The company’s emissions rose 25% last year, which Bloomberg attributes to AI’s electricity demand and the slow rollout of cleaner solutions.

Microsoft told Bloomberg that carbon-removal purchases are one part of its decarbonisation pathway and that the change does not represent a shift in ambition. It remains the largest buyer in the voluntary carbon-removal market, accounting for nearly half of transactions so far in 2026, Bloomberg reports.

Why it matters

Carbon-removal purchases help fund technologies such as direct air capture, which remain expensive to deploy at scale. A pullback by a buyer as large as Microsoft could affect a young market that relies on corporate demand, and send a signal to other potential buyers.

The tension is not simply credits versus emissions cuts. Microsoft says the purchases are one part of a broader approach, while its rising emissions show the strain that energy-hungry AI expansion can put on climate goals. Those are Bloomberg’s reported figures and Microsoft’s stated position, not proof that AI alone explains the company’s emissions or its purchasing decision.

Our read

This is a useful reality check on the climate cost of scaling AI. A company can maintain its stated ambition while changing how much it buys, but the measure that matters is whether total emissions fall and credible removal projects still get funded. “One pillar” is a fair description; it is not the same as the whole building.

What to watch

• Whether Microsoft’s carbon-removal purchases recover or fall further.
• How the company’s emissions change as its AI infrastructure grows.
• Whether other major buyers make up any shortfall in demand for removal credits.

Discussion spark: Should AI companies be expected to keep funding carbon removal as they expand, even when the technology remains expensive, or should they prioritise cutting their own emissions first?

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