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Green hydrogen is emerging as a key player in the clean energy transition. With this thought, Microsoft and Irish energy company ESB have joined forces to launch a groundbreaking pilot project that could reshape the way data centers are powered. To decarbonize its operations, the tech giant will use green hydrogen (H2) fuel cells to generate clean electricity at its Dublin campus.

Microsoft Switches to Green Hydrogen to Tackle Scope 3 Emissions

Microsoft’s move to adopt green hydrogen aligns with its broader sustainability goals. In 2020, the tech giant committed to becoming carbon-negative, water-positive, and zero-waste by 2030. This latest project not only supports that vision but also demonstrates how hydrogen technology can play a critical role in decarbonizing sectors like data centers, which are significant energy consumers.

Lavinia Morris, General Manager, of Microsoft’s EMEA Data Centre Operations, remarked,

 “This pilot project is another important step in our journey to transition to carbon-free electricity supply for our data centers, buildings, and campuses around the world. As we look to advance a more sustainable future, we hope to build on the success of this pilot project and continue to find innovative ways to decarbonize our operations.”

However, recent reports reveal that Microsoft’s Scope 3 emissions in 2023 were 30% higher than in 2020. The rise in emissions is largely driven by the expansion of data centers to meet the growing demand for AI computing power. Consequently, switching to blue hydrogen is one way to tackle the Scope 3 emissions.

Microsoft emission

Source: Microsoft 2024 sustainability report

This pilot project also adheres to the ‘Principles for Sustainable Data Centre Development’ outlined by the Irish government. By ensuring efficient use of the electricity grid and promoting the use of renewable energy, Microsoft is contributing to the country’s sustainability goals.

ESB’s Innovative Hydrogen Fuel Cells: Zero Emissions, Maximum Impact

Hydrogen is emerging as a vital component of the clean energy transition. It’s especially valuable for sectors where renewable solutions like wind and solar are less practical. ESB’s hydrogen fuel cells can potentially replace diesel generators and offer a carbon-free alternative that can power critical infrastructure without any carbon emissions.

Microsoft’s press release explains that the pilot project will run for eight weeks. Significantly it is the first time that hydrogen fuel cells will be used to provide electricity to Microsoft’s data center in Europe. These zero-emission fuel cells, designed by ESB, will deliver up to 250 kW of power to Microsoft’s data center and administration building in Dublin.

The key feature of hydrogen fuel cells is their ability to convert stored green hydrogen into electricity. The only byproduct? Pure water. Unlike traditional diesel generators, these cells produce no carbon emissions or harmful air pollutants, such as sulfur dioxide (SO2), nitrogen oxides (NOx), or particulate matter. This makes them an ideal solution for reducing the environmental and health impacts often associated with backup power systems.

Eoin Doherty, Vice President, EMEA Regional Leader, Microsoft Cloud Operations + Innovation, said,

“The green hydrogen project we’re launching with ESB is a pioneering first for Microsoft in Europe, demonstrating how zero-emissions hydrogen can be harnessed to power our digital lives. If scaled successfully, it could provide new ways of advancing sustainability in our sector and beyond.”

Additionally, Jim Dollard, ESB Executive Director, Generation and Trading, commented,

“ESB believes green hydrogen will play an important role in the net zero energy system of the future. We’re delighted to be working with Microsoft on this innovative pilot project that will showcase the potential for green hydrogen as part of zero-emission electricity generation for data centers.”

Notably, the Dublin pilot is just the start of a broader shift to hydrogen power across Europe. ESB aims to expand hydrogen fuel cell projects in 2024 and 2025, showcasing its versatility in various energy applications.

Green hydrogen capacity targets and consumption potentials in selected countries in the EU in 2030

green hydrogen EU

Source: Statista

Microsoft’s collaboration with ESB highlights the role hydrogen can play in reshaping energy production and consumption. With growing sectors like AI and cloud computing, the demand for cleaner power is more urgent than ever. By adopting hydrogen fuel cells, Microsoft is demonstrating how innovative solutions can help meet these challenges and reduce emissions.

Source: Microsoft announces pioneering green hydrogen pilot project with ESB

The post Microsoft and ESB Launch Groundbreaking Green Hydrogen Pilot to Decarbonize Dublin Data Centers appeared first on Carbon Credits.

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Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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