After Years of Clean Energy Emphasis, Tech Companies’ Carbon Footprints are Soaring Due to AI Data Centers: Offsetting Emissions Has Grown Too

     Tech companies used to be poster children for clean energy, utilizing renewable energy for data center buildout. However, the vastly higher energy use of AI data centers makes it impossible for them to continue with low-carbon projects. Natural gas has emerged as the most practical source to power AI data centers with the continuous energy they need. Some mitigation of that gas can be done, such as utilizing certified lower-emissions natural gas and, in a few cases, providing carbon capture.

     According to Haley Zaremba in an article for Oilprice.com:

“Big Tech is seeing its carbon footprint expand by double-digit rates driven almost entirely by the AI boom. According to official company figures, the total carbon emissions of Google and Microsoft each skyrocketed by 25% year-over-year from 2025 to 2026, while Amazon's increased by 16%.”

     She mentions that an Amazon data center project in South Texas is building what might be the highest-emitting natural gas plant in the country. The facility would be permitted to release 33 million tons of CO2 per year.

     Unless more efficient methods of powering and cooling data centers are developed, emissions will continue to rise. Tech companies have been buying up carbon credits to offset AI emissions at high enough rates that by late last year credits were in short supply. As the graph below from a late 2025 Reuters article shows, Microsoft is by far the major buyer of carbon offsets. She cites a paper in the journal npj Climate Action that determines that emissions generated by AI projects will far exceed emissions avoided by using renewables, which is rather obvious. 

     They quantified those estimated emissions. The authors are predicting higher 2035 emissions from AI data centers than IEA estimates. 

     The 2025 Reuters article notes:

“Overall, $10 billion has been spent in the spot market and longer-term offtake agreements combined, according to market tracker CDR.fyi.”

     The graph below from the article shows that, among carbon offsets, biochar production is leading by far since the carbon is thought to be stored better and it is cheaper. Carbon removal credits tripled in 2025 compared to 2024. Right now, there is higher biochar demand than supply, so companies are gearing up to produce and deploy more of it. Carbon credits are also in high demand and in short supply.

“Credit supply has not kept pace with demand.”

“A third of requests to buy credits through the Patch platform were for biochar, yet it ultimately made up less than 20% of sales because of tight supply, Patch said.”

“Reforestation credits were requested 25% of the time, but sold 12% of the time.”

 

     

References:

 

AI set to extend fossil fuel dominance. Haley Zaremba. OIlprice.com. August 16, 2026. AI set to extend fossil fuel dominance

Big Tech offsetting AI-linked emissions leaves carbon credits in short supply. Simon Jessop, Susanna Twidale and Virginia Furness. Reuters. November 18, 2025. Big Tech offsetting AI-linked emissions leaves carbon credits in short supply | Reuters

AI-driven productivity gains enable more CO₂ emissions than they avoid in a global energy–economy model. Will Alpine, Nathan Geldner, Holly Alpine & Maksym G. Chepeliev. npj Climate Action. volume 5, Article number: 71 (2026. August 4, 2026. AI-driven productivity gains enable more CO₂ emissions than they avoid in a global energy–economy model | npj Climate Action