Can Carbon Credits Help Sustainable Data Centre Strategy?
Carbon credits have long been controversial, often criticised for lacking transparency and raising fears of greenwashing.
Yet with the rise of energy-intensive AI and cloud workloads, the data centre industry is beginning to look more seriously at its role in offsetting emissions.
The World Resources Institute argues that carbon removal will be essential to counterbalance emissions that cannot otherwise be abated on the journey to net zero. Without corporate investment, markets for removals may struggle to scale.
Why data centres are driving new interest
Research from MSCI suggests the “frozen” carbon market could thaw by 2030, as corporate climate commitments and regulatory pressures intensify.
“Carbon credits have come a long way since their inception in the late 1980s,” says Jeremy Davis, Executive Director at MSCI.
“From early offset programs to today's dynamic voluntary markets, the path has been shaped by pivotal milestones like the Kyoto Protocol, the EU Emissions Trading Scheme and the Paris Agreement.”
Tech giants like Microsoft, Google and SAP are not only buying credits but also publicising their strategies, signalling a shift that could drive wider adoption.
For data centres under pressure to cut emissions while scaling capacity, this represents a practical, if imperfect, lever.
Types of credits and relevance to digital infrastructure
Carbon credits vary depending on whether they avoid, reduce or remove emissions.
Avoidance credits might come from renewable energy projects that prevent fossil fuel use, while reduction credits can be linked to efficiency improvements.
Removal credits include reforestation, carbon capture and storage, or direct air capture technologies.
Nature-based projects, such as forestry or soil carbon programmes, contrast with technology-based approaches like biochar or methane capture.
For data centre operators grappling with escalating electricity consumption, the latter can offer targeted removals that complement efficiency gains.
Major providers and market standards
The carbon credit landscape now includes providers aligned to different business needs.
Climeworks is developing direct air capture technologies and works with global enterprises including SAP.
South Pole offers one of the world’s largest portfolios spanning both nature-based and technology-based projects.
Agreena operates Europe’s largest soil carbon programme, while Watershed vets projects against criteria like permanence and co-benefits to build diverse portfolios.
Verification standards are also tightening. Verra’s Verified Carbon Standard remains one of the most widely used, while the Puro Standard specialises in removals such as biochar.
Newer frameworks like Isometric emphasise scientific rigour for technology-based projects. These standards aim to ensure credibility and trust, particularly important for high-visibility industries like data centres.
SAP and Climeworks: long-term removals deal
SAP has entered into a multi-million-euro agreement with Climeworks to secure 33,500 tonnes of carbon removal credits through 2034.
“Investing in quality carbon removals addresses emissions we can't eliminate directly,” says Sophia Mendelsohn, Chief Sustainability and Commercial Officer at SAP.
"Investing in quality carbon removals addresses emissions we can't eliminate directly”
“Our Climeworks partnership secures high-integrity capacity at preferred rates while protecting against price volatility. This investment also strengthens SAP economically - we can now develop new products that meet evolving customer, partner and regulatory expectations.”
“Climeworks and SAP share the belief that sustainability is a core element of business strategy,” adds Climeworks Co-Founder and Co-CEO Christoph Gebald.
“Through this partnership, we are not only advancing carbon removal as a key solution to mitigate climate change-induced business risks but are also embedding it into enterprise technology, making it easily actionable for businesses worldwide.”
Microsoft turns to forestry for removals
Microsoft has also leaned on carbon credits as AI and cloud workloads strain its emissions targets. In the southern US, the company signed a long-term agreement with Chestnut Carbon to deliver more than six million tonnes of credits over 25 years, involving the planting of over 35 million trees.
“This is one of – if not the – single largest voluntary corporate investments in conservation forestry in the United States,” says Brian Marrs, Senior Director of Energy and Carbon Removal at Microsoft.
“This is one of – if not the – single largest voluntary corporate investments in conservation forestry in the United States”
“It will deliver seven million tons of carbon removal over a 25-year period, restore roughly 60,000 acres of land and plant over 35 million native, biodiverse hardwood and softwood trees.”
Google catalyses diverse carbon removals
Google, facing similar challenges with its energy use, has contracted more than US$100m in removal credits, supporting solutions from forestry to enhanced rock weathering.
“We’re encouraged by our progress, but the journey to catalyse carbon removal is just beginning,” explains Randy Spock, Carbon Credits and Removals Lead at Google.
“In the year ahead, we will continue to expand our support for carbon removal as part of our ongoing effort to find the solutions the world needs and maximise their impact on the planet.”
For the data centre sector, these moves highlight a new phase where offsets are no longer viewed solely as greenwashing, but as one piece of a broader toolkit.
As demand for AI-driven capacity soars, carbon credits could play an increasingly visible role in bridging the gap between sustainability commitments and the reality of high-power operations.
