Data centres' growing environmental challenge: mapping the global regulatory response
Data centres promised economic growth, but they're also straining local infrastructure and threatening climate commitments. As countries scramble to respond with new regulations, we've built a live tracker to map the evolving policy landscape across OECD countries.
The explosive growth in data centre installations has become a frontier for environmental and economic policy. Enthusiastically embraced as the key to future economic growth by governments like the UK’s, the hard reality is that our digital economy demands significant material resources and increasingly imposes its own environmental costs.
The banks of servers inside a modern data centre, containing thousands of semiconductors working 24/7, create significant demands not only for electricity to power their operations, but also water for the advanced cooling systems needed to keep temperatures optimal.
A footprint as large as major economies – but unevenly distributed
This combination creates a substantial environmental footprint. Opportunity Green’s recent report laid bare the growing size of the issue: data centres currently consume about as much energy as France or Germany, and International Monetary Fund projections suggest they could match India’s consumption by 2030. But while this global comparison is dramatic, it disguises huge variation in how data centres are distributed across the globe. across the globe.
In hotspots for installation, like Virginia in the US or Ireland, demands for electricity and water use are starting to impose real constraints on over-stretched local infrastructure. Ireland’s data centre energy use accounted for 17% of its electricity supply in 2022, but it’s set to reach one-third by 2026 after years of breakneck expansion – though this has been halted more recently by a moratorium imposed around Dublin by Ireland’s electricity grid operator. Water demands, meanwhile, can be extraordinary: a hyperscale data centre might use the same amount of water as around 30,000 households. (All of these figures are taken from Opportunity Green’s report, available here.)
From renewable pledges to fossil fuel dependency
The challenges aren’t only on local infrastructure and supplies. As expansion has accelerated, and despite pledges from operators to meet voluntary targets on renewable energy, data centres have increasingly leaned into the use of fossil fuels to provide the substantial, continuous electricity source they need.
US President Donald Trump recently hosted CEOs and leaders from US Big Tech and fossil fuel giants like Exxon at the “Pennsylvania Energy and Innovation Summit”, showcasing the state’s fossil fuel reserves. In the US, 60% of new generation installations are gas turbines, with data centres leading the charge in rising demand for power. Elsewhere in the world, new electricity demands from data centres are threatening existing commitments on climate policy.
A patchwork of regulatory responses
In response to these mounting challenges, governments across OECD countries are beginning to implement targeted regulations and sustainability requirements for data centre operations. As documented in the analysis of emerging regulations below, interventions range from Ireland's moratorium on new data centre connections to Germany's Energy Efficiency Act mandating renewable energy use and power usage effectiveness limits.
However, the policy response has largely been fragmented and reactive, with most measures occurring at local or regional levels rather than through comprehensive national frameworks. This patchwork approach reflects the urgent need for coordinated policy development that addresses both the macro-level environmental impacts and the systemic challenges posed by an industry whose rapid expansion has outpaced regulatory frameworks and environmental planning.
We will keep this as a live document, updated regularly, to provide a resource for policy developments on data centre environmental regulations across the OECD.
