Microsoft Invests In Carbon Credits To Restore Amazon Rainforest, Faces Challenges From Data Center Growth, Trump's Fossil Fuel Focus

Microsoft Corp MSFT is committed to restoring parts of Brazil’s Amazon and Atlantic forests for carbon credits.

The company told the Financial Times it inked a deal to buy 3.5 million credits over two years from Brazil startup Re.green.

The deal could be worth approximately $200 million.

In 2023, Microsoft’s carbon footprint exceeded 17 million tons of carbon dioxide, a 40% increase from 2020.

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Data Center Growth: Big Tech giants, including Microsoft, Alphabet Inc.’s GOOG GOOGL Google and Amazon.com Inc AMZN, remain invested in their data center endeavors, ramping up energy consumption and putting pressure on emission control promises.

The Trump administration deprioritized curbing climate change and prioritized boosting fossil fuel production in the U.S., citing data center energy challenges.

Goldman Sachs flagged data center energy needs rising 165% by 2030 from 2023, pushing Big Tech, such as Alphabet, Amazon and Microsoft towards nuclear energy solutions.

Carbon Credits and Big Tech: Re.green CEO Thiago Picolo told the Financial Times that U.S.-based tech companies remain the biggest buyers of carbon credits linked to nature restoration projects.

In 2024, Alphabet, Meta Platforms, Microsoft and Salesforce shared plans to buy 20 million tons of these by the decade’s end.

Bank of America Corp BAC invested $205 million in exchange for tax credits from ethanol producer Harvestone Low Carbon Partners’ carbon capture project at a North Dakota ethanol plant.

Amazon founder Jeff Bezos has been a significant climate change advocate. In February 2020, he committed $10 billion to the Bezos Earth Fund to support scientists, activists and NGOs in combating climate change.

Additionally, Microsoft co-founder Bill Gates, another major player in climate change initiatives, voiced his desire for Elon Musk to be more vocal about climate change. Gates, along with Bezos and Alibaba Group Holding co-founder Jack Ma have been climate-focused investment advocates through Breakthrough Energy Ventures, which raised $839 million for its third flagship fund.

MSFT Price Action: Microsoft stock is up 3.83% at $444.92 at publication Wednesday.

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