Data Centres: Boost Or Barrier To Net Zero?

3rd June 2025

As artificial intelligence (AI) reshapes global industries, data centres have become the backbone of this transformation. However, their rapid expansion presents both opportunities and challenges, especially for countries like Malaysia striving towards net-zero emissions.

Globally, data centres consumed approximately 415 terawatt-hours (TWh) of electricity in 2024, with projections indicating a rise to 945 TWh by 2030—surpassing Japan’s current electricity consumption. AI is a significant driver of this surge, with AI-optimized data centres expected to quadruple their electricity demand by 2030. (IEA)

In Malaysia, the data centre market is experiencing exponential growth. Valued at USD 4.04 billion in 2024, it’s projected to reach USD 13.57 billion by 2030, growing at a compound annual growth rate of 22.38%. Johor, in particular, is emerging as a data centre hub, with plans to develop 1.6 gigawatts of capacity, making it the fastest-growing market in Southeast Asia. (globenewswire.com, AP News)

This growth brings economic benefits, including job creation and technological advancement. However, it also raises environmental concerns. Data centres are energy-intensive and require substantial water resources for cooling. In 2024, Selangor approved 27 new data centres, which collectively require 79 megalitres of water daily. (AP News, digitalnewsasia.com)

To address these challenges, Malaysia is implementing strategic measures. The government has introduced new planning guidelines to streamline data centre development and ensure sustainable growth. Additionally, initiatives like the YTL Green Data Center Park in Johor aim to integrate renewable energy sources, such as a 500MW solar farm, to power data centre operations. (datacenterknowledge.com, Wikipedia)

Furthermore, Malaysia is encouraging data centres to adopt green technologies and practices, including the use of reclaimed water and rainwater harvesting, to reduce environmental impact. (digitalnewsasia.com)

In conclusion, while data centres are pivotal to Malaysia’s digital and economic future, balancing their growth with environmental sustainability is crucial. By embracing green technologies and implementing robust policies, Malaysia can harness the benefits of data centres while progressing towards its net-zero ambitions.(AP News).

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