Microsoft has signed a carbon removal credit purchase agreement with BioCirc for 650,000 metric tons. While the transaction size is not large, the latest development shows that Microsoft’s emissions reduction efforts are still moving forward, following earlier reports that it had paused such purchases—amid growing complexity due to the expansion of AI data centers.
The agreement was signed after the rumors.
According to TechCrunch, the agreement was signed in May, several weeks after rumors emerged that Microsoft had paused new carbon removal transactions. Melanie Nakagawa, Microsoft’s Chief Sustainability Officer, stated that the company’s carbon removal initiatives have not been discontinued, but rather are being adjusted in terms of procurement pace and scale.
Credit comes from 5 biogas projects.
These carbon removal credits come from BioCirc’s five biogas projects. The facilities convert biomass waste, such as agricultural residues, into methane and carbon dioxide; the carbon dioxide is then captured and stored in offshore underground reservoirs, while the methane is used to generate electricity.
- Procurement scale of 650,000 tons of carbon removal credits
- The project originates from five facilities under BioCirc.
- The agreement was signed in May 2026.
AI's electricity consumption increases pressure to reduce emissions
Microsoft is recently accelerating its AI infrastructure development. Last month, the company stated that it is collaborating with Chevron and Engine No. 1 to advance a natural gas power project to support its Texas data center, with future generation capacity potentially reaching 5 gigawatts.
This means that while Microsoft continues to purchase carbon removal credits, it is also seeking more reliable power sources for its AI data centers. If fossil fuel usage increases, the company will need to further expand its carbon removal purchases to achieve its 2030 carbon-negative goal.
Internally, we are also discussing methods for matching electricity usage.
The report also mentioned that Microsoft is internally discussing whether to abandon its goal of matching zero-emission electricity use on an hourly basis. Currently, the company uses an annual matching approach, which offers greater flexibility but makes it harder to verify the use of clean energy.
From this new transaction, Microsoft appears to be readjusting the pace of its carbon removal purchases rather than exiting the market. As its AI business continues to drive up energy demand, Microsoft’s future procurement volumes will remain under close industry scrutiny.