Microsoft’s total carbon emissions have increased by nearly 30% since 2020, primarily due to the construction of data centers, according to the company’s annual sustainability report released on Wednesday.
The report indicates that Microsoft’s Scope 1 and 2 emissions — those directly from the company’s operations and the energy it consumes — decreased by 6.3% in 2023 compared to 2020. However, the company’s indirect emissions — from all other activities — rose by 30.9% over the same period.
The rise in indirect emissions is mainly attributed to the materials and hardware components, such as semiconductors, servers, and racks, used in building more data centers.
“As a leading cloud provider expanding its data centers, we face unique challenges,”
Microsoft stated in the report. The company emphasized the need for more sustainable concrete, steel, fuels, and chips.
The growth of data centers is a significant challenge for tech companies with ambitious goals to eliminate their carbon footprints. Microsoft aims to be carbon negative by 2030.
To tackle its indirect emissions, Microsoft plans to require select high-volume suppliers to use 100% carbon-free electricity by 2030.
A Goldman Sachs report from April forecasts that artificial intelligence and data centers will account for 8% of U.S. electricity consumption by 2030, more than double their current share. The report predicts natural gas will supply 60% of the increased power demand from data centers, with renewables providing the remaining 40%. Utility companies such as Dominion Energy and Duke Energy acknowledge that natural gas will be necessary to support renewables during periods when solar and wind power generation is insufficient due to weather conditions.
Microsoft aims to match all of its electricity consumption with zero-carbon energy purchases by the end of the decade. Last year, the company increased its contracted renewable energy assets to over 19.8 gigawatts across 21 countries and secured 5 million metric tons of carbon removal over the next 15 years.
In a recent agreement with Brookfield Asset Management, Microsoft contracted 10.5 gigawatts of renewable energy between 2026 and 2030. This deal is described as the largest power purchase agreement ever signed between two corporate partners.
Additionally, Microsoft signed a landmark agreement with a Swedish partner to remove 3.3 million metric tons of carbon dioxide, marking the largest deal of its kind to date.
Tran Dung/ATES GLOBAL
Source: CNBC
