Microsoft's CO₂ emissions up 25% as AI data centres drive fossil fuel use

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Microsoft produced 20.3 million tons of CO2e emissions last year, up from 16.2 million tons

Of the 37.5 million MWh of energy used, only 422,000 MWh came from unsustainable sources

A rise in diesel/crude oil consumption and Scope 2 emissions are key drivers

In its latest sustainability report , Microsoft has admitted its greenhouse gas emissions actually rose 25.1% year-over-year from 16.2 million tons to 20.3 million tons in 2025.

With the company targeting a 2030 carbon negative deadline, rising emissions presents a major challenge that it must overcome, however current trends point to emissions continue to rise even further.

Microsoft said its rapid expansion of AI and cloud data centers as a key driver for rising emissions, and with more projects in the pipeline, this could be an ongoing challenge for years to come.

Microsoft's emissions are moving in the wrong direction

The company also noted its decision to stop buying short-term renewable energy certificates that do not directly support additional clean capacity. While the previous year's 16.2-million-ton figure was lower than last year's, it was largely offset by carbon credits and doesn't accurately represent the true emissions.

More broadly, Scope 2 and Scope 3 emissions are also under pressure from the continued data center expansion, due to electricity purchases, unsustainable construction materials and compute hardware. For example, Scope 2 emissions went from accounting for 1.6% of total emissions in FY24 to a staggering 13.3% in FY25.

As for fossil fuel use, the company saw a 51% rise in diesel and crude oil consumption despite reductions in natural gas (-6.5%), propane/LPG/jet fuel (-10%) and gasoline (-16%) use. Still, of the nearly 37.5 million MWh of energy the company used in FY25, only around 422,000 MWh came from non-renewable sources (per a separate data sheet ).

However, despite expansion-related challenges, Microsoft did make significant progress to reducing overall emissions, hitting around 20 million tons last year instead of the 34 million tones it could have hit without work on carbon-free electricity, sustainable fuels, energy efficiency improvements and other supple chain refinements.

Microsoft isn't the only company battling the impacts of AI – Amazon also recently noted a 16% annual increase in emissions, while also blaming AI and data centers. Google also saw a 25% rise in emissions for its most recent full year.