Big Tech Invests in Carbon Credits as AI Emissions Rise
According to data compiled for CNBC by carbon credit management platform Ceezer, the intensive energy and water requirements of AI development have driven a sharp increase in carbon credit purchases.
These companies have all committed to reaching net-zero emissions, but the environmental impact of AI development puts these pledges at odds with their current practices.
This is where buying carbon credits comes in.
Carbon Credit Purchasing Spikes
Carbon credits allow organisations to purchase credits from projects which avoid or remove carbon emissions, such as reforestation or renewable energy projects. Each credit purchased represents the removal of one tonne of CO2e from the atmosphere.
Amazon, Alphabet, Microsoft and Meta have invested an estimated combined total of nearly $700 billion in their AI initiatives, with a significant focus on building data centres. With the huge environmental cost of running data centres, the tech giants are investing extensively in building their AI capabilities, and then again for reducing the environmental impact of them.
Carbon credit management platform, Ceezer, has reported that these organisations have increased their purchases from 14,200 credits for permanent carbon removal in 2022 to 11.92 million in 2023 – an increase of approximately 839 times in a single year. Investment increased again to 24.4 million in 2024 and to 68.4 million in 2025.
Given current operations, it appears difficult for tech companies to achieve their net-zero ambitions without relying on carbon credits.
As the environmental impact of AI grows, carbon credits are increasingly being used by tech companies as a mechanism to offset emissions that can’t yet be eliminated.
Carbon Credit Strategies
Organisations are under no obligation to report on their carbon credit strategies, however it has been suggested that various methods are being employed by tech companies, from purchasing time-limited carbon credits which have varying lengths of effect, through to permanent removals with more significant impact.
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Interestingly, Microsoft has been most transparent in their credit carbon purchasing, even prior to the AI boom, and are considered one of the climate leaders in the big tech market.
Melanie Nakagawa, chief sustainability officer at Microsoft, told CNBC: “As a first mover in the carbon removal market, we are in a unique position to send demand signals that can lead to an increase in supply. A carbon removal market with more solutions and more buyers will get us all closer to meeting our collective targets, and drive positive planetary and economic impact”.
Ben Rubin, executive director of industry coalition Carbon Business Council, told CNBC: “The demand surge for removal in 2023 was not a short-term reaction but the beginning of a structural shift, matched by increasing private sector action and public policy support”.
In addition to carbon credits, an increasing reliance on renewable energy is likely. Renewable energy is expected to be a key driver in supporting organisations with their sustainability agendas.
Ceezer’s CEO, Magnus Drewelies commented: “Over the time that AI rose, emissions did slightly go up when looking at the bigger companies, but not so noticeably. This implies that hyperscalers were able to react relatively quickly, including shifting to renewable energy”.
A multi-pronged approach will be essential in ensuring organisations can continue to innovate and deliver technological advancements, but without the unwelcome costs to the environment.
