On 13 April 2026, Bloomberg reported that Microsoft has paused all new carbon removal credit purchases — a move that has sent shockwaves through a market that the tech giant effectively created. Internal staff confirmed the halt, which affects direct air capture (DAC), biochar, enhanced weathering, and all other engineered carbon removal categories. The strategic review was triggered, in part, by the revelation that Microsoft's own greenhouse gas emissions have risen 23.4% since 2020, driven by massive data centre expansion to support AI workloads.
The scale of Microsoft's dominance in the voluntary carbon removal market is extraordinary. As of April 2026, the company accounts for 36.4 million tonnes — or 78.5% — of all disclosed durable CDR tonnes contracted globally. According to CDR.fyi's April 2026 demand snapshot, no other organisation even comes close: the next-largest buyers collectively account for the remaining 21.5%. When Microsoft pauses, the market pauses.
The pause directly affects multi-year agreements with Climeworks and Carbon Engineering (now 1PointFive), worth a combined $200–300 million. Microsoft has confirmed these existing contracts remain intact — no existing deliveries have been cancelled. But the pipeline of new contracts, previously the engine of DAC facility financing, has dried up overnight.
Microsoft's own June 2025 Environmental Sustainability Report revealed a 23.4% increase in total emissions since 2020 — a direct consequence of the energy-hungry data centres required to run its AI products, including Azure OpenAI services. The company had committed to being carbon negative by 2030, but that target now looks increasingly out of reach without a radical strategy shift. The CDR pause appears to be part of a broader recalibration of climate commitments to match operational reality.
Market implication: The US 2026 federal spending law included $116 million for a federal CDR purchasing programme — a number that looked modest when Microsoft was hoovering up supply. With Microsoft sidelined, government procurement becomes the critical demand backstop. Prices could soften in the short term, creating a potential entry window for new buyers.
The CDR.fyi April 2026 durable CDR demand snapshot shows that beyond Microsoft and the Frontier coalition (whose $1B+ commitment remains active), the buyer base is thin. The structural risk is clear: a market built on a single anchor buyer is not a market — it is a bilateral agreement with branding. The next 12 months will test whether diversified demand from corporate buyers, airlines (via CORSIA), and government programmes can fill the gap.
MIT Technology Review noted on 16 April 2026 that the pause "could delay hundreds of millions of dollars in planned investments" across the sector. Climeworks, which went public in 2024 partly on the strength of Microsoft's long-term commitment, has not yet commented on its project expansion timeline.
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Sources: Bloomberg, 13 Apr 2026 · MIT Technology Review, 16 Apr 2026 · CDR.fyi April 2026 Snapshot · Carbon Herald