Data centres are places that house the physical infrastructure — including servers and other network technologies — that power our digital lives.
To call these places 'the cloud' is misleading. Data centres draw resources from our environment to operate. They are powered by electricity, cooled with water, and produce hazardous waste—all of which have very real impacts on the environments in which they operate.
The energy requirements of data centres are massive, and growing, though the size of their carbon footprint depends a lot on how this energy is produced.
In this guide, we'll run through some of the estimates for data centre carbon emissions, why the data isn’t great, and outline how we can collectively reduce the impact of data centres in the future.
What are data centres?
Data centres are facilities that host computer systems and related components, such as telecommunications and storage systems. These centres are the often-invisible infrastructure powering activities like streaming video, generative AI, and cryptocurrency mining.
There are two main types of data centres: Traditional data centres and cloud data centres. Traditional data centres are typically owned and operated by the businesses that use them. In contrast, cloud data centres are owned and operated by cloud service providers like Google Cloud, Amazon Web Services, and Microsoft.
What are the carbon emissions of data centres?
There is no typical data centre
What are the carbon emissions of a typical data centre? While you might find some statistics floating around the web, there's no easy answer to this question.
Why? First, because there is no typical data centre. The carbon emissions of data centres vary hugely according to their operational efficiency, power consumption, and electricity source.
Second, there is not much transparency from the data centre industry about their carbon emissions. This means that a lot of the data is extrapolated from a range of sources, some of which isn’t up-to-date.
This is why authorities like New Zealand's Ministry for the Environment are unable to produce a single emissions factor for data centres. As they write in their guide to measuring emissions:
"Due to the diversity and country location of data centres used by organisations in New Zealand it is not possible to produce a single emission factor that would inform users of the kg CO2-e each gigabyte of data produces."
Global data centre emissions estimates
This means that general claims about the carbon emissions impact of data centres vary wildly. The International Energy Agency claims that data centres account for 1-1.5% of global electricity demand, with an additional 1-1.5% for transmission networks. Together, they claim this accounts for 0.4% of global greenhouse gas emissions — though they notably exclude cryptocurrency mining from their global estimates.
Other studies have suggested that energy consumption of ICT, broadly defined, accounts for 3.7% of global emissions, and suggested that watching 30 minutes of Netflix is the equivalent to driving 6 kilometres in your car. While this has been strongly contested, it is still routinely cited as fact in blog posts and media outlets.
Where does that leave a business looking to understand their supply chain emissions? Well, the fact is, general claims about energy usage don't matter too much.
Focus on electricity source
Rather than focus on global averages, it's best to focus on the electricity source used by your specific data centre. This will give you a better sense of your own carbon footprint. It can also help inform decisions to reduce your scope 3 emissions in the future.
As a rule of thumb, data centres in India, Indonesia, and Australia are the most carbon intensive. This is because those countries produce more electricity with fossil fuels, particularly coal. Data centres in Northern Europe are typically more sustainable, as these countries use more renewable sources for electricity.
What impacts the carbon emissions of data centres?
Location
The location of a data centre significantly influences its carbon emissions. The carbon intensity of the local electricity grid, the availability of renewable energy sources, and the local climate all play a role in determining the environmental impact of a data centre.
Data centres located in regions with a high proportion of renewable energy in the local electricity grid will have lower carbon emissions than those in areas heavily reliant on fossil fuels. Similarly, data centres in cooler climates can leverage 'free cooling'—using outside air to cool the servers—thereby reducing their electricity consumption and carbon emissions.
IT load
The IT load refers to the amount of work that a data centre's IT systems are handling. It includes the processing, storage, and network activities performed by the servers. A higher IT load means more electricity is consumed, leading to higher carbon emissions.
Efforts to optimise the IT load, such as improving server utilisation or employing energy-efficient hardware, can effectively reduce a data centre's carbon emissions.
Electrical efficiency
Electrical efficiency serves as a critical metric for evaluating how effectively a data centre uses its electricity. This efficiency is often expressed through the Power Usage Effectiveness (PUE) formula, which calculates the ratio of the total energy consumed by a data centre to the energy specifically used by its IT equipment.
A lower PUE value is indicative of higher electrical efficiency, meaning that less energy is being wasted on non-computing functions such as cooling and power distribution. Larger data centres—sometimes called 'hyperscale' data centres—typically have a lower PUE.
Over the last decade, PUE has been trended downwards as data centres become more efficient. According to data from the International Energy Agency, this has helped keep electricity costs steady even as internet traffic has increased 25-fold.
Other environmental issues with data centres
In addition to contributing to carbon emissions, data centres present a range of other environmental challenges that warrant attention.
Water usage
One of the major environmental issues is water usage. Data centres use vast amounts of water, primarily to cool the servers and other IT equipment. This cooling process can be incredibly water-intensive, which is problematic in areas suffering from water scarcity.
Google notes that their data centres use 450,00 gallons of water per day — a number that, when scaled across all major cloud providers, has the clear potential to strain local water infrastructure.
In such locations, the excessive use of water by data centres can exacerbate local water stress, potentially impacting both ecosystems and human communities who rely on these water resources. This is why there's a growing demand for more water-efficient cooling technologies in data centres.
E-waste
Another significant concern is the limited lifetime of data centre equipment like servers, storage devices, and cooling systems. These components often have a lifespan that can be as short as a few years. Once they reach the end of their useful life, proper disposal becomes imperative.
Incorrect disposal methods can result in harmful substances such as heavy metals and chemicals leaching into the soil, contaminating water sources and posing risks to wildlife and human health. This is particularly troubling because many electronic components contain toxic materials like lead, mercury, and cadmium, which can have severe environmental and health impacts if not properly managed.
Battery back-ups
Backup power is also an environmental concern. Data centres usually rely on large banks of batteries to maintain operations during power outages. These batteries, typically of the lead-acid or lithium-ion variety, have their own set of environmental challenges.
If improperly disposed of or recycled, these batteries can leak toxic substances into the environment, causing soil and water pollution.
Coolant
Coolants used in data centres can be an environmental hazard. Various types of cooling agents are used to dissipate the heat generated by the servers and other equipment.
Some of these coolants, particularly those used in older air conditioning systems, are potent greenhouse gases that can contribute to climate change if they leak into the atmosphere. Due to these concerns, there is an increasing focus on developing environmentally friendly cooling solutions for data centres.
Why this matters for all businesses
The environmental impact of data centres is a concern for all businesses, not just those in the IT sector. As more companies move their data and services to the cloud, they indirectly contribute to the environmental footprint of data centres.
The data centres used by the digital services businesses purchase are part of their scope 3 emissions, and are calculated as part of their carbon footprint. This number is increasingly being requested by customers and stakeholders.
Businesses are also under increasing pressure from consumers, regulators, and investors to demonstrate their commitment to sustainability — without greenwashing. Understanding and addressing the environmental impact of their data centre usage is becoming a vital aspect of corporate sustainability strategies.
What can be done about it?
While the environmental challenges posed by data centres are significant, there are several strategies that businesses and data centre operators can employ to reduce their impact.
Use different cloud services
Not all cloud services are created equal when it comes to environmental impact. Some cloud providers are more committed to sustainability than others, operating their data centres on renewable energy and implementing advanced energy efficiency measures.
Businesses can reduce their environmental impact by choosing to work with these providers.
Invest in renewable energy
Data centre operators can make a significant dent in their carbon emissions by switching to renewable energy and investing in green data centres. This could involve purchasing renewable energy directly, investing in renewable energy projects, or even buying carbon offsets.
It's worth noting that all major data centre providers have committed to 100 percent renewable energy in the future.
Build data centres close to renewable energy
Building new data centres in locations with abundant renewable energy resources can help to reduce their reliance on fossil fuels. For example, data centres in Iceland can take advantage of the country's abundant geothermal energy.
This is why Microsoft and Amazon are investing in data centres in New Zealand, leading to claims that the country could become the land of the long green cloud.
Invest in cooling techniques
Investing in advanced cooling techniques can significantly reduce a data centre's electricity consumption. These could include free cooling, liquid cooling, and the use of artificial intelligence to optimise cooling systems.
Reuse waste heat
Some data centres have outlined plans to repurpose their waste heat for beneficial purposes. Traditionally, the excess heat generated by servers and other equipment is considered a byproduct to be eliminated, often through energy-intensive cooling systems.
However, this waste heat can be captured and repurposed for other applications, such as district heating systems that warm residential and commercial buildings. By integrating a data centre's cooling infrastructure with a local heat distribution network, it's possible to offset the energy used for heating in other facilities, thus making the entire system more energy-efficient and reducing its carbon footprint.
Advocate for greater transparency
Finally, businesses can help drive change in the data centre industry by advocating for greater transparency around environmental impact. This could involve pushing for more detailed reporting on energy use, carbon emissions, and other environmental metrics.
