Microsoft emissions jump on data centres buildout

Microsoft has reported a jump of 25% in its total greenhouse gas emissions in the financial year 2025.

The software giant said the rise was primarily driven by the expansion of its data centre infrastructure and pausing the use of renewable energy certificates.

Non-additional, unbundled renewable energy certificates (RECs) are tradeable credits purchased separately from physical electricity.

Microsoft said it ceased purchasing the certificates in a bid to refocus funds on more long-term, higher-impact investments across carbon reduction, carbon removal, and clean electricity procurement.

"While this decision increases our reported emissions in the near term, it enables us to increase the development of new carbon-free energy (CFE) rather than relying on certificates alone," Microsoft said.

"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."

While Scope three emissions remains the largest share of Microsoft's footprint overall, Scope two emissions rose sharply from just 2% to 13% in the year. Scope two covers indirect emissions from purchased electricity, steam, or cooling whereas Scope three includes all other indirect value chain emissions, such as supply chain production.

"This development underscores the growing role energy systems play in shaping environmental outcomes and why advancing CFE remains critical to long-term progress," it said.

"While Scope three remains the largest share of our footprint overall, we continue working with suppliers to advance decarbonisation across our value chain."

Microsoft highlighted it has achieved its milestone of matching 100% of its annual electricity consumption with renewable energy in 2025.

"Matching our datacentres' electricity usage with CFE is an important tool for reducing the emissions associated with our operations," Microsoft said.

"As demand for AI and cloud services grows, expanding access to CFE while improving how that energy is used is critical to reducing overall impact."