Microsoft Corporation has reported a 27% increase in its greenhouse gas emissions for fiscal year 2025, highlighting the growing environmental cost of the global artificial intelligence boom as tech companies rapidly expand data center infrastructure. Total emissions reached 21.1 million metric tons of carbon dioxide equivalent (mtCO2e) for the fiscal year ending June 30, 2025, up from 16.7 million the previous year, according to the company’s 2026 Environmental Data Fact Sheet.
Read More: Pakistan’s Fish and Seafood Exports Hit Record $568 Million in FY26
The emissions spike was driven largely by Microsoft’s massive data center buildout to support AI workloads, combined with a strategic decision to pause purchases of renewable energy credits that had previously helped offset its carbon footprint. Microsoft President Brad Smith and Chief Sustainability Officer Melanie Nakagawa acknowledged in the company’s annual sustainability report that while “AI infrastructure is driving demand for energy, water, land and materials, sustainability solutions are not scaling fast enough to meet demand”.
The disclosure follows similar reports from Google and Amazon, which posted emissions surges of 18% and 16%, respectively, as all three companies acknowledge that AI infrastructure expansion is outpacing their decarbonization efforts. Microsoft’s emissions intensity also increased for the first time in six years, rising to 75.0 mtCO2e per million dollars of revenue from 68.1 the prior year, even as revenue grew 15% to $281.7 billion.
A major contributor to the increase was a tenfold surge in Scope 2 market-based emissions, those tied to purchased electricity, which ballooned from 259,090 mtCO2e to 2.7 million mtCO2e. Microsoft attributed the jump partly to its February 2025 decision to stop purchasing “spot” energy attribute certificates, reflecting a “commitment to high-integrity climate action”. The company also reported that its electricity consumption increased 24% to 37 million megawatt-hours, more than three times its 2020 usage.
Despite the setback, Microsoft reiterated its commitment to becoming carbon negative, water positive, and zero waste by 2030, though Chief Sustainability Officer Melanie Nakagawa acknowledged that progress “isn’t going to be linear”. The company noted it is shifting toward investments that help finance new carbon-free electricity capacity rather than relying on renewable energy certificates from existing projects. The report comes as the United Nations found that global data centers now consume so much electricity that only ten countries in the world use more energy.
