Microsoft has signed a contract to purchase 4.9 million metric tons of carbon removal credits from Vaulted Deep, a company that specializes in underground carbon storage.

The agreement will last 12 years, extending through 2038, and aims to offset the company’s increasing carbon emissions.

Vaulted Deep employs technology to inject solid waste, including treated sewage and paper sludge, into porous rocks deep underground.

This method prevents carbon dioxide from entering the atmosphere.

The company has removed over 18,000 metric tons of carbon dioxide to date.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ The tech sector’s AI boom is creating an industry-wide emissions challenge

Microsoft’s emissions growth reflects a broader trend across the technology sector directly linked to artificial intelligence and cloud computing expansion.

According to a 2025 ITU report, major AI-focused companies have seen a 150% increase in operational emissions since 2020, with electricity consumption by data centers growing 12% annually from 2017 to 20231.

This growth far outpaces global electricity increases, with the digital sector now accounting for 2.1% of global electricity use and 0.8% of all energy-related emissions1.

This demonstrates how the AI revolution is creating tension between business growth and climate commitments across the entire tech industry, not just at Microsoft.

Despite efficiency improvements, total emissions continue rising because the scale of digital infrastructure deployment is outpacing per-unit efficiency gains.

2️⃣ Microsoft’s carbon management history shows systematic approach despite recent setbacks

Microsoft’s current emissions challenges come despite having one of the tech industry’s longest-standing climate programs, implemented well before their 2020 carbon negative pledge.

The company has been carbon neutral since 2012, maintaining this status through an internal carbon fee system that assigns monetary value to emissions and creates accountability within business units2.

This mechanism generates funds for environmental initiatives by charging departments for their carbon footprint, creating financial incentives that have successfully driven behavioral changes across the organization2.

Microsoft’s carbon fee proceeds have historically funded internal efficiency projects, renewable energy initiatives, and carbon offset projects, creating a systematic approach to emissions management2.

The company’s current struggle highlights how even corporations with established climate governance systems face significant challenges when core business demands, like AI infrastructure, grow rapidly.

3️⃣ The carbon removal market faces concentration risks with few major buyers

Microsoft’s massive carbon removal purchases highlight a critical market vulnerability: the carbon removal industry currently depends heavily on a small number of corporate buyers.

Industry analysis identifies Microsoft as accounting for a significant portion of durable carbon removal purchases, creating worrying market dependence on a limited buyer pool3.

This raises concerns about market stability, as the carbon removal sector could face disruption if key purchasers like Microsoft were to alter their procurement strategies3.

The voluntary carbon market is already experiencing price volatility due to supply constraints combined with rising demand, with projections suggesting demand for carbon dioxide removal credits could reach 100 million metric tons by 20304.

For emerging carbon removal companies like Vaulted Deep, this creates both opportunity and risk. Major deals provide crucial revenue, but over-reliance on a handful of tech giants creates potential vulnerability if those companies shift priorities.

Recent Microsoft developments

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