Microsoft’s datacentres have caused 25% more carbon emissions last year

Microsoft, despite still wanting to be carbon negative by 2030, has actually increased its carbon emissions by 25% in 2025 compared to the previous year. Unsurprisingly, a lot of this is down to the AI boom and rush to build more and more data centres.

The Redmond giant recently unveiled their 2026 Environmental Sustainability report, and it’s not looking good. In total, Microsoft’s emissions increased by 25% to over 20 million CO2e (carbon dioxide equivalent) in their FY2025, compared to 16 million CO2e in the last two years. And that’s just the actual reported emissions too; estimated emissions with select interventions puts it at 34 million.

“Our total emissions increased 25% year over year, driven primarily by the expansion of our datacenter infrastructure and stopping our use of non-additional, unbundled renewable energy certificates as we prioritize investments that bring net new power to grids,” – Microsoft

Microsoft admits that the expansion of their datacentre infrastructure is behind this spike in carbon emissions, on top of their decision to stop purchasing ‘non-additional, unbundled renewable energy certificates’, which are basically carbon credits of sorts that isn’t really green energy and don’t create new renewable energy.

Of course, considering it’s Microsoft’s own sustainability report, they still wanted to showcase where they were making gains. For instance, they claim that they replenished more water globally than they withdrew at over 14 million cubic meters, marking a milestone towards being water positive. They also highlighted a 92% reuse and recycling rate of decommissioned servers and components across cloud operations, and also diverted 90.5% of construction and demolition waste away from landfills and incinerators.

The silver lining to this, if there is any, is that Microsoft claims despite the higher reported emissions this time, they are developing and adding more carbon-free electricity to their grids as well as exploring building datacentres using timber; this should allow them to be more sustainable once again in the longer term.

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