Microsoft bought 8.55 million metric tons of carbon removal credits through mid-July 2026, down about 80% from the same period a year earlier, in its first annual pullback from the market since 2023. The reduction comes as the company accelerates spending on AI infrastructure and reported a 25% rise in 2025 emissions, which it attributed to growing electricity demand from AI operations and slower deployment of cleaner energy. Despite the sharp decline, Microsoft remains the largest buyer in the voluntary carbon removal market, accounting for nearly half of all transactions so far this year, according to BloombergNEF calculations. Total market sales fell 66% year over year to 18 million metric tons through mid-July, underscoring how heavily the sector still depends on a small number of corporate buyers. Microsoft entered the market in 2020 as part of its pledge to become carbon negative by 2030 and remove its historical emissions by 2050. The company said any adjustments reflect a disciplined approach rather than reduced ambition, and reiterated that carbon removal credits are only one part of its broader decarbonization strategy. The pullback follows an April report that Microsoft had paused some deals for financial reasons. The shift highlights a broader tension across the tech industry, where hyperscalers are racing to expand data centers and AI capacity even as those investments complicate climate targets. Frontier, the carbon buying coalition backed by companies including Stripe and Alphabet, said in June that its total commitments had reached $1.8 billion, suggesting corporate demand for permanent carbon removal remains present but uneven.