Carbon Imbalance Grows, Microsoft Launches New Climate Initiative

Microsoft’s aggressive expansion of its data centers is causing its carbon emissions to soar — threatening its ambitious climate pledge made in 2020. That year, the tech giant committed to removing more carbon from the atmosphere than it emits by 2030. However, in the four years since, the company’s emissions have risen by nearly 25%.

To address this growing gap, Microsoft is now purchasing large volumes of carbon removal credits. One of its latest deals is with a company called Vaulted Deep, from which it has agreed to buy carbon removal equivalent to 4.9 million metric tons over a 12-year period, lasting until 2038. The financial details of the deal have not been disclosed.

Vaulted Deep operates like a “reverse oil company.” It collects solid waste — including treated sewage, excess manure, and paper sludge — which would otherwise end up in landfills or incinerators. The waste is turned into slurry and injected into porous rock layers deep underground using fracking-like technology.

So far, the company has permanently removed over 18,000 metric tons of carbon dioxide. Vaulted Deep was a runner-up in the Xprize Carbon Removal competition and in November raised $32 million in a Series A funding round led by Prelude Ventures.

In 2024, Microsoft reported total greenhouse gas emissions of 14.9 million metric tons — more than double its target for 2030. While it continues to invest heavily in renewable energy, certain components like semiconductors still lack zero-emissions alternatives, leaving unavoidable emissions in its supply chain.

As a result, Microsoft has ramped up its investments in carbon removal. Besides the deal with Vaulted Deep, it signed a 7 million metric ton agreement with Chestnut Carbon to reforest 60,000 acres in the southeastern United States, and another deal with CO280 to remove 3.7 million metric tons of carbon from paper mill operations along the Gulf Coast.

Experts believe such large-scale carbon credit investments may help Microsoft meet its 2030 “carbon negative” target — but the real impact will depend on the success and scalability of these removal technologies.