Microsoft slashes carbon removal purchases 80% amid AI spending surge

Microsoft ↗ 0.90% has slashed its carbon removal credit purchases by roughly 80% in the first half of 2026 compared to the same period last year, even as the company signed a new offtake agreement with wastewater-focused startup Crew Carbon, underscoring a strategic recalibration of its climate spending amid surging artificial intelligence investments.

A Sharp Pullback

The tech giant bought 8.55 million metric tons of carbon removal credits in the year through mid-July, about 80% less than it purchased over the same period in 2025, according to calculations by BloombergNEF reported on Wednesday. The decline puts Microsoft on track for its first annual retreat from the voluntary carbon removal market since 2023.bloomberg

Microsoft had dominated the space in recent years, accounting for 87% of all carbon removal purchases in 2025 and 78.5% of all disclosed contracted durable carbon removals as of April, according to CDR.fyi data cited by ESG Dive. The pullback follows reports in April that the company had begun telling suppliers it was pausing future purchases. Heatmap News first reported the pause, citing two people informed of the plans.heatmap+1

Melanie Nakagawa, Microsoft's chief sustainability officer, said at the time that the company's carbon removal program "has not ended" and that it may "adjust the pace or volume of our carbon removal procurement as we continue to refine our approach toward sustainability goals".nytimes

The Crew Carbon Deal

Despite the broader slowdown, Microsoft announced an offtake agreement with Crew Carbon for up to 23,602 carbon removal units generated through the startup's wastewater alkalinity enhancement technology. Crew Carbon, a Yale University spinout launched in 2022, integrates its process into existing wastewater treatment facilities to accelerate mineral weathering that permanently stores atmospheric CO2.esgtoday+1

Philip Goodman, Microsoft's carbon removal portfolio director, said the deal "supports the advancement of a novel, wastewater-based approach that is highly durable and measurable". The agreement brings Crew Carbon's total committed carbon removal contracts to more than $40 million, following previous deals with JP Morgan, Google, Autodesk, and Stripe through the Frontier coalition.crewcarbon+1

A Shifting Strategy

Microsoft's recent Environmental Sustainability Report outlined a multi-approach carbon strategy that includes long-term agreements for mature solutions alongside smaller purchases to assess emerging technologies. The Crew Carbon deal appears to fall into the latter category — a relatively modest volume intended to validate a scalable pathway.esgtoday

The 80% reduction in purchases reflects broader pressures on the company as it channels capital toward AI infrastructure. Microsoft signed agreements to remove a record 45 million metric tons of CO2 in 2025, a volume that industry observers said was sufficient to keep the company on track for its goal of becoming carbon negative by 2030 even with a slowdown in new contracting.esgtoday+1