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Microsoft’s new sustainability report, released late last week, shows how a carbon-heavy economy can be heavier for businesses that want to become carbon lights.
Since 2020, the company’s carbon emissions have increased by 23.4%, primarily as a result of the Breakneck Data Center build-out to support cloud and AI growth. Buying electricity that’s clean enough is actually a simple part. The facility itself is loaded with carbon-intensive materials and products, such as steel, concrete, and computer chips.
“We reflect the challenges the world has to overcome to develop and use greener concrete, steel, fuel and chips,” a Microsoft spokesperson told TechCrunch in an email. “These are the biggest factors behind our range 3 challenges.”
Range 3 emissions are those outside the direct control of the company, such as raw materials, transportation, and purchased goods and services. Scope 3 emissions represent almost all of Microsoft’s carbon dioxide emissions, slightly above 97% in 2024.
Microsoft’s Scope 3 profile is dominated by capital goods and purchased goods and services, with the two contributing about three-quarters of the company’s total carbon emissions.
Building the data center was the main driver behind Microsoft’s stubborn Scope 3 emissions. The steel used in the building comes from a supply chain that relies on blast furnaces heated with fossil fuels, while the concrete used in the foundation is driven by carbon dioxide producers, and both producers are the product of the product. Some startups are working to decarbonize both steel and cement, and Microsoft Investors In space, it will take years for those bets to have a big impact.
Carbon emissions are also embodied in computer chips within data centers. Semiconductor lithography relies on chemicals with a very high potential for global warming. For example, hexafluoroethane, used to etch chip features, is a powerful greenhouse gas, with one ton of its production of equal warming. 9,200 tons of carbon dioxide.
Even green electricity is easy to find, so hurdles have emerged as data centers aren’t always close to the abundant clean energy sources. As a result, Microsoft has struggled to find a nearby source of carbon electricity and is forced to rely on purchasing elsewhere. “Our power consumption is growing faster than the grids we operate and is decarbonized,” the spokesman said.
Overall, Microsoft’s 2024 emissions have been slightly lower than in 2023, suggesting that the company has improved its construction of data centers with lower climate impacts. Still, there is a long way to go to achieve its 2030 goal of removing more carbon contamination than it produces. With its own forecast, Microsoft will need to cut its emissions by more than half, but it will need to significantly increase its carbon removal efforts.
There are indications that Microsoft is moving forward at some point on both fronts. This has been one of the leading solar investors in recent months, with its zero carbon power portfolio of 34 gigawatts capacity. Additionally, we recently signed a very large deal that promises to remove millions of tons of carbon.
However, 2030 is only a few years away, and while the company’s AI and push to the cloud may be profitable, it has reached a more challenging sustainability goal.