Gas-powered data centers could more than double Microsoft's emissions

Turning to gas to power data centers means Microsoft's carbon footprint from such infrastructure will more than double.

That's according to an analysis from Stand.earth Research Group (SRG), which argues that three methane gas projects announced in the last month to power AI data centers for the company will send its carbon footprint skyrocketing 160%.

“Microsoft makes great claims about its climate credentials, and has shown real leadership in the past, which makes it even more disappointing to see the company so wholeheartedly turn toward fossil fuels – proposing nearly 5GW of new fossil fuel power in just the first few months of 2026 – while still promising to be on track for its climate goals," said Rachel Kitchin, senior corporate climate campaigner at Stand.earth.

"The gap between what Microsoft says, and what Microsoft does, seems to grow wider by the day."

The analysis comes amid a boom in data center construction driven by AI, which is already driving up energy demand. The rush has caused some tech companies to turn to alternative fuel sources, including nuclear, but also led to an increase in gas-powered data centers.

In recent years, increased generation of data center power using fossil fuels has sharply increased tech emissions.

Indeed, back in 2024, Microsoft's emissions surged 29% off the back of data center building, while Google admitted its emissions were up 50% due to AI energy demand. Despite such concerns, Google-owner Alphabet last month called for more power generation to feed AI.

In response, campaigners have demanded the UK government enforce stricter emissions rules for data centers.

Gas-powered AI

The SRG analysis points to a trio of data center projects powered by methane gas. The first is an exclusive agreement with Microsoft and Chevron for 2.5GW of power for a data center, while the second involves Microsoft leasing a 900MW facility in Abilene, Texas, which applications reveal has plans for methane gas powered turbines.

SRG calculates that those three projects alone will emit 15.52 million metric tons of carbon dioxide emissions – despite Microsoft's own plans to become carbon negative, including with data centers, by 2030.

ITPro contacted Microsoft for comment, but had not yet received a response at the time of publishing.

On-site power

Last month, Big Tech players in the US signed an agreement with the government to "build, bring or buy" their own power to data centers, in the hopes that would keep electricity prices down. However the agreement didn’t include any provisions to use renewable sources.

That, alongside dated electrical grid infrastructure, has led some data center companies to generate energy on site. In some cases that's achieved by co-locating with existing power stations such as nuclear facilities, but in others that's involved turning to gas.

SRG notes that at the end of 2024, data centers made up 5% of demand for methane gas power, but just a year later, that has leapt to 39%.

"Proponents of these fossil fuel-powered hyperscaler projects may, for example, point to the opportunity to leverage methane that would otherwise be burned off as part of the conventional extraction process, which is a convenient perspective to hold if you’re an oil-and-gas giant seeking to entrench new dependents," said Kitchin.

"However, if you’re one of the world’s leading technology companies that has for years proudly touted its decarbonization goals, the visions don’t line up."

"Renewables are the cheapest form of energy to build, aren’t subject to the massive price volatility compared to fossil fuels, and don’t drive up people’s utility bills," she added. "Microsoft has shown that it knows how to build renewables quickly and at scale, so to get back on track, it needs to cancel these pollution-producing contracts and recommit to around-the-clock clean energy."