Microsoft Emissions Surge 27% as AI Race Hits Climate Goals

By the Editorial Team · Sunday, July 12, 2026

Microsoft's greenhouse gas emissions rose by 27% to 21.1 million metric tons in the fiscal year ending June 2025, driven largely by increased energy use tied to AI infrastructure and a shift away from purchasing carbon offsets. This marks the company's first increase in emissions intensity in six years, highlighting the growing challenge tech giants face in balancing AI expansion with sustainability goals.

Microsoft reported a 27 percent increase in its greenhouse gas emissions in the fiscal year ending June 30, 2025, underscoring environmental challenges faced by major technology companies amid rapid expansion in artificial intelligence (AI) infrastructure. The company’s total emissions climbed to 21.1 million metric tons of carbon dioxide equivalent (mtCO2e), up from 16.7 million mtCO2e the previous year, according to Microsoft’s 2026 Environmental Data Fact Sheet released Thursday.

This rise follows similar disclosures from other tech giants, with Google and Amazon recently reporting emissions increases of 18 percent and 16 percent, respectively. These trends highlight a broader sector challenge, where growth in AI-related data centers and computational resources is outpacing efforts to reduce carbon footprints. As a result, Microsoft and its peers now emit more greenhouse gases per dollar of revenue than in previous years.

Microsoft’s emissions intensity, measured in mtCO2e per million dollars of revenue, increased to 75.0 from 68.1 the prior year. This marks the first such rise in at least six years, coinciding with a 15 percent revenue growth that brought the company’s total revenue to $281.7 billion. A significant factor behind the emissions jump was a near tenfold increase in Scope 2 market-based emissions—those linked to purchased electricity—which soared from approximately 259,000 mtCO2e to 2.7 million mtCO2e.

The company partly attributed this surge to a strategic change implemented in February 2025, when it ceased buying "spot" energy attribute certificates and carbon removal credits. These instruments had been previously used to offset part of its reported emissions in the company's accounting framework. Without these offsets, the reported emissions related to electricity consumption increased substantially.

While the disclosures reveal the difficulty of balancing rapid AI infrastructure growth with climate goals, Microsoft and other companies maintain efforts to invest in renewable energy and improve energy efficiency. However, the recent data underscore the complexities technology firms face as they expand AI capabilities, which require substantial energy consumption, and highlight ongoing tensions between business growth and sustainability commitments.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.