What is Insurtech’s Role in AI‑Driven Carbon Markets?

The rapid expansion of AI is placing data centres under increasing scrutiny as energy demand surges – but what role can carbon credits play in managing the risk exposure?

According to an IEA report, electricity consumption from AI-driven data centres rose by 50% in 2025, with forecasts suggesting demand will double by 2030.

A new report from The City of London Corporation and the UK Carbon Markets Forum connects this growth to rising demand for carbon credits, as insurers and risk managers assess how organisations offset emissions linked to scaling AI infrastructure.

These credits enable companies to finance projects that reduce or remove greenhouse gases, forming an increasingly important tool within underwriting frameworks and net zero strategies .

How is data centre growth driving carbon markets?

The scaling of AI infrastructure is reshaping procurement strategies across the technology sector, with knock-on implications for insurance buyers, underwriters and risk managers.

Companies like Microsoft and Google have increased their near-term demand for engineered greenhouse gas removal credits, which permanently remove CO₂ from the atmosphere rather than simply avoiding emissions.

As AI workloads require vast processing power, driving higher electricity use and heat output, firms are turning to carbon credits to help manage emissions while continuing to expand capacity.

The report emphasises the pace of this shift.

Amazon, Alphabet, Microsoft and Meta increased their purchases from 14,200 credits for permanent carbon removal in 2022 to 11.92 million credits in 2023.

From an insurtech perspective, this points to a fast-growing market where emissions exposure, transition risk and corporate net zero claims are becoming more relevant to underwriting and product design.

Dame Clara Furse, Chair of the UK Carbon Markets Forum, says: “As demand grows for high integrity carbon credits, including from energy-intensive emerging technologies, the question is how markets channel this capital at scale.

“The UK already has a sophisticated financial and professional services ecosystem that is well placed to support Carbon Markets growth.

“This report shows that with the right policy framework, the UK can lead in scaling markets that deliver real climate impact and long term economic value.”

UK market positioned for expansion

The UK plays a central role in this evolving ecosystem, with carbon credit markets already generating £1.2bn (US$1.6bn) in annual gross value added and supporting more than 11,000 jobs.

That activity is closely linked to the country’s financial and professional services sector, which helps channel capital into carbon projects worldwide.

Between 2023 and 2025, UK financial institutions and corporates committed US$5.8bn to carbon projects around the world.

These initiatives spanned nature restoration, flood protection and air quality improvement, all of which support emissions reduction or removal.

The UK is strengthening its role in the greenhouse gas removals market, sitting just behind the US as the sector develops.

That position could help British firms export specialist expertise and services to overseas markets as data centre operators increasingly look for high-integrity carbon credits.

Insurance is also a critical piece of the puzzle, with many carbon initiatives unable to move ahead without the right cover in place.

Global gross written premium for carbon insurance products is expected to reach about £30bn (US$40.7bn) by 2050, roughly 80 times its current level, and the UK remains the market leader.

Policy decisions shape future growth

As AI continues to scale across data centres, policy is becoming a key part of making that growth sustainable.

A government consultation on carbon markets is due this summer, offering a chance to shape how the UK responds to rising demand from digital infrastructure.

The carbon credit report outlines six recommendations for the government.

Chris Hayward, Policy Chairman of the City of London Corporation, says: "Carbon markets are a significant and growing part of the UK's financial services offer – generating over a billion pounds of economic value, supporting thousands of jobs and attracting billions in investment from around the world.

"As AI accelerates global demand for carbon credits, the City of London is well-positioned to be the home of that market.

"But that position is not guaranteed.

"We are calling on government to treat carbon market development as the industrial and financial services strategy priority it deserves to be."

As AI continues to scale, the link between data centre operations and carbon credit markets is becoming more pronounced, influencing both environmental strategy and commercial opportunity.