With the fast growth of AI and high-performance computing, the energy demand and CO2 emissions of the data center sector will continue to increase. As governments increasingly focus on reaching net-zero by 2050 targets, and with data center hyperscalers such as Microsoft and Meta pledging to be carbon neutral by 2030, data centers face increasing pressure to decarbonize operations and prioritize sustainability.

 

IDTechEx's report on Sustainability for Data Centers 2025-2035 characterizes green data center technologies, players, and markets. With coverage across solutions for reducing scope 2 emissions (renewable power generation and energy efficiency on the data center componentry level) and scope 3 emissions (carbon credits, green concrete, and decarbonized IT manufacturing), spanning over 170 companies, and market forecasts until 2035, it provides comprehensive market intelligence for the data center space. Forecast areas include:

10 year market forecast for expected growth in scope 2 and scope 3 emissions (kg) in the data center space.

10 year market forecast for power (GW) and electricity consumption (TWh) in the global data center sector.

10 year market forecast for thermal design power (TDP) for CPUs and GPUs (W).

10 year market forecast for carbon credits for data centers (kg).

10 year market forecast for savings from carbon free energy usage (US$) in global data center sector.

Decarbonized power generation

For some regions, unprecedented growth in the data center construction is starting to stretch grid capacity to its limits. To expand in a way aligned with sustainability goals, data center players are increasingly playing a more active role in bringing new renewable energy projects online beyond the standard power purchasing agreements (PPAs) and renewable energy certificates (RECs). For example, early microgrid projects exploring on-site off-grid power generation for data centers are emerging. Wind and solar power have long been favored by data center players due to a low LCOE (levelized cost of electricity), but the intermittency of these renewables is proving problematic in anticipation of updates to the GHG Protocol with increased focus on location-based and time-based energy matching. This report examines emerging low-carbon energy technologies including hydrogen fuel cells, enhanced geothermal energy, small modular nuclear reactors, and grid-scale Li-ion batteries, identifying key players and case studies in the data center space, and comparing the economic and technical factors that determine which emerging energy solutions hold the most promise for green data centers over the next ten years.

Improving energy efficiency

Most existing policies surrounding data center decarbonization, such as the EU Energy Efficiency Directive, relate to the energy efficiency (PUE - power use efficiency) of data centers. As the data center sector transfers over from traditional air cooling to direct-to-chip liquid cooling, bringing reductions in greenhouse gas emissions, water usage, and energy consumption, tradeoffs in other metrics such as cost and complexity must be considered. Further, with the constant emphasis of energy efficiency from leading component suppliers such as Nvidia, AMD, SK Hynix, and Infineon, the energy efficiency on the componentry level (e.g., GPUs, CPUs, memory modules, power converters, etc) is also seeing growth.

 

This report includes comprehensive coverage of data center cooling technologies and sustainability implications. Improvements are also being made to electrical and IT efficiency alongside thermal efficiency. From purpose-built chips, memory modules, to cooling components and AC/DC converters, data center players are racing to enhance energy efficiency.

Reducing Scope 3 emissions

Scope 3 emissions typically represent the majority of CO2 emissions from data centers. Key factors contributing to scope 3 emissions include upstream manufacturing and assembly of servers and networking equipment used in data centers, upstream emissions from purchased electricity, and emissions related to data center construction. In 2023, Microsoft's Scope 3 emissions were 30.9% higher than 2020 "primarily from the construction of more data centers and the associated embodied carbon in building materials, as well as hardware components such as semiconductors, servers, and racks."

 

Because Scope 3 emissions are indirect emissions in a company's value chain that are not caused by the company itself, it can be hard for data center players to tackle scope 3 emissions. IDTechEx explores three different ways for companies to reduce scope 3 emissions in this report: (1) Purchasing carbon credits (specifically carbon removal credits) to counteract hard-to-avoid CO2 emissions, ​(2) Using low-carbon materials in data center construction (green concrete, green steel, and timber) either physically or through attribute purchases (book and claim), and (3) Choosing IT hardware with lower embodied/manufacturing carbon over the lifetime of a data center.