Microsoft pauses carbon credit purchases, shaking removal market

Saturday 11 April 2026 - 12:00

By: Dakir Madiha

Microsoft pauses carbon credit purchases, shaking removal market

Microsoft has begun informing suppliers and partners that it is suspending future purchases of carbon removal credits, according to reports, a move that could disrupt a market heavily dependent on the company.

Microsoft accounted for more than 90 percent of global carbon removal purchases last year. The company has bought about 45 million tonnes of carbon removal to date. By comparison, Frontier, backed by Stripe, has purchased around 1.8 million tonnes. Data from BloombergNEF shows Microsoft represented 93 percent of global carbon removal credit demand in 2025.

A company spokesperson said Microsoft is not halting all activity indefinitely and continues to review its portfolio and market conditions as it works toward its carbon neutrality goals.

The pause highlights the fragility of the carbon removal sector. Analysts say the market has relied on a single dominant buyer to sustain growth. Industry platform CDR.fyi previously warned that without Microsoft’s participation, contracted volumes could fall sharply, exposing structural concentration risks.

The timing is notable. Days before the pause, Microsoft signed a 626,000 tonne carbon removal deal tied to a bioenergy project with carbon capture in Saskatchewan, Canada. In March, it agreed to a one million tonne biochar deal with Liferaft and entered 2026 with nearly five million tonnes of new agreements signed in January alone.

Microsoft has pledged to become carbon negative by 2030 and to offset all historical emissions by 2050. However, like other major technology firms, it faces rising energy demand linked to the expansion of AI data centers, creating pressure on both costs and climate targets.

The broader policy environment is also shifting. The US Department of Energy has redirected more than $500 million previously allocated to carbon capture toward supporting aging coal plants, according to reports. At the same time, Congress has approved over $116 million in funding for carbon capture research and federal procurement programs in 2026.

With the sector’s largest buyer stepping back, even temporarily, smaller private buyers and public programs may struggle to fill the gap, raising uncertainty about the future pace of carbon removal deployment.