Microsoft admits datacentre greenhouse gas emissions hike

It took four years for Microsoft datacentres to increase their greenhouse gas emissions by four-million tonnes. Between 2024 and 2025, its datacentre carbon footprint jumped by a further four-million tonnes to 20-million tonnes. 

The company’s 2026 Environmental sustainability report, shows that total emissions (Scopes 1, 2, and 3) increased 25% year over year (YoY), driven primarily by the expansion of Microsoft datacentre infrastructure.

Microsoft said it has needed to prioritise investments that bring net new power to grids, which has led to it pausing the purchase of “green credits” known as non-additional, unbundled renewable energy certificates.

In a blog post, Microsoft president Brad Smith said: “While this decision increases our reported emissions in the near term, it enables us to increase the development of new CFE (carbon-free energy) rather than relying on certificates alone. We believe this change will create more long-term sustainability benefits. Growth-related emissions pressure was expected. The more important signal is where that pressure is concentrated.”

The Microsoft report shows that one of the clearest changes this year was the growing contribution of Scope 2 emission, which represent indirect greenhouse gas emissions arising from the from datacentre cooling. Microsoft reported Scope 2 emissions accounted for 13% of its total emissions – up from nearly 2% last year. 

The report’s authors said that while the global shift toward artificial intelligence (AI) is driving economic growth, innovation and technology product development, AI also has an environmental impact, increasing demand for power, cooling and water.

Smith said: “The global shift toward AI is reshaping economies, accelerating innovation and becoming foundational to how technology is built and used. It is also increasing demand for the energy, water, land, and materials required to support that growth.

“As a company at the forefront of this transition, Microsoft has a responsibility to help ensure that technology strengthens, rather than strains, the systems and communities on which it depends. This imperative is reshaping the context for our work.”

Environmental advocate Erin Brockovich has been vocal about new datacentre builds appearing across the US and has developed a website where residents affected by these new sites can voice concerns. In an article on the The Brockovich Report website, co-authored with journalist Suzanne Boothby, Brockovich spoke about “the wholesale remaking of the American landscape, town by town, county by county”.

She added: “I’m not making a blanket argument against datacentres or against the technology they support. What is not acceptable is the pattern our map documents: projects announced after permits are already secured, developers who don’t return calls, local officials who signed NDAs [non-disclosure agreements] before their neighbours knew a project was being considered,” she said

Smith’s post suggests Microsoft is beginning to recognise the backlash against datacentre builds. He said: “We are placing greater focus on helping restore more water to the watersheds where we operate than we withdraw while strengthening long-term water resilience. We prioritise projects in water-stressed regions that are locally relevant and designed in partnership with communities, delivering benefits not only for water availability, but also for ecosystems, economies and people. Through this approach, we aim to ensure our growth supports and helps sustain the communities and environments where we operate.”