Microsoft and Google Drive Surge in Carbon Removal Credit Demand as AI Use Expands – TipRanks.com

Large firms are buying more high-quality carbon removal credits as they expand their use of AI, according to industry experts. As a result, supply is tight and prices are rising. The trend is moving fast because firms want clear paths to reduce the impact of new data hubs that consume large amounts of power.

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Strong Demand and Limited Supply

Two of the major buyers of carbon removal credits are Microsoft (MSFT) and Alphabet (GOOGL). Since 2019, the group of large firms has spent over $10 billion on projects that capture and store carbon for long periods. Prices for these credits are now close to 4 times higher than those for credits tied to forest plans. Each firm is using these credits to help meet long-term climate aims as AI use grows.

In 2024, buyers took in 8 million tons of durable carbon removal. This year, the total is near 25 million tons. Yet fewer than one million tons of credits have been issued so far. Most issued credits have come from…