Microsoft鈥檚 climate-warming emissions jumped last year as the company raced to build data centers powering artificial intelligence, increasing how far the company must go to meet its pledge to become carbon negative by 2030.
The Redmond-based tech giant reported 21 million metric tons of greenhouse gas emissions in fiscal year 2025, up from about 17 million the previous year 鈥� a roughly 27% increase.
The increase was largely driven by Microsoft鈥檚 rapid and very expensive data center buildout, the company said, along with its decision to stop relying on short-term renewable energy certificates that had previously helped lower its reported emissions.聽
Microsoft isn鈥檛 alone among tech giants seeing its climate targets strained by rapid AI growth. . Google鈥檚 climbed 18%.聽
Microsoft says it remains committed to becoming carbon negative, water positive and zero waste by 2030. But with four years remaining, its emissions are substantially higher than when it made those pledges in 2020. And it plans to keep building. Microsoft said it would spend a record $180 billion this year on capital projects, largely new data centers.
Chief Sustainability Officer Melanie Nakagawa declined to say whether she is worried Microsoft will miss the 2030 carbon-negative target, saying progress 鈥渋sn鈥檛 going to be linear鈥� and that the company is focused on whether its efforts are working to change its trajectory.
In its sustainability report, Microsoft acknowledged that AI is increasing demand for 鈥渆nergy, water, land, and materials,鈥� and said sustainability solutions are 鈥渘ot scaling fast enough to meet demand.鈥�
鈥淲e expected these growth-related pressures,鈥� Nakagawa said in an interview.聽
The largest source of Microsoft鈥檚 emissions increase was from capital goods, which includes everything from server equipment and computer chips to concrete and steel. Emissions from that category rose from 6 million metric tons of carbon dioxide to 9 million. About 86% of Microsoft鈥檚 carbon footprint came from indirect emissions聽鈥� from things the company buys, sells and relies on outside its own operations.
Energy use in the company鈥檚 data centers also played a role.
Microsoft鈥檚 electricity use is more than three times what it used in 2020 and has climbed to 37 million megawatt-hours in fiscal year 2025, up from 30 million the year before. The company has touted that it鈥檚 matched 100% of its annual energy consumption with renewable power, meaning it bought or contracted enough renewable energy over the year to equal its total electricity use.聽
But in Asia and parts of Europe, the Middle East, and Africa, Microsoft couldn鈥檛 procure enough clean energy. That meant this type of emission jumped from 259,090 metric tons to 2.7 million.聽
Clean energy, Nakagawa said, is not equally available in every region where Microsoft operates, particularly in parts of Asia. Previously, Microsoft had used renewable energy certificates to offset that in its accounting, but Nakagawa said the company was shifting its investments toward longer-term projects to add new clean power to electric grids.
Microsoft said it is trying to reduce its impact through lower-carbon concrete and steel and supplier decarbonization. But the company said that many of the hardest emissions to cut sit outside its control.聽
Microsoft鈥檚 water use also rose by more than 1 billion liters to 13 billion total liters withdrawn. About half of those withdrawals came from areas with high or extremely high water stress, according to the company鈥檚 data fact sheet.聽
The company said it replenished more than 14 billion liters of water globally, surpassing its worldwide withdrawals for the first time. Water replenishment projects can look like helping farms or businesses use less water through more efficient irrigation or restoring wetlands and streams so they hold more water.
But Microsoft acknowledged that global replenishment alone is not enough and said its next phase will focus more on restoring water in the local watersheds where it operates.