Sustainable Data Centres: Navigating Regulations and Innovations for a Greener Future

In the ever-evolving landscape of technology, the drive towards sustainability has become not just a goal but a necessity. This is especially true for data centres, which are often described as “the backbone” of our current digital landscape. These facilities, critical for storing, processing, and disseminating vast amounts of data, consume a significant amount of energy ( with sources reporting that they account for around 4% of Global Energy Consumption)* making them prime candidates for green measures. Recent regulatory changes have emphasised the urgent need for these measures and the importance of adopting sustainable practices within data centres globally. As we delve into the complexities and challenges that data centre operators face today, it’s crucial to recognise the innovations and strides taken toward a more sustainable future.

Recent Regulatory Changes: A Catalyst for Action

EU Regulations
In the face of climate change, governments and regulatory bodies worldwide are tightening the reins on emissions and energy consumption. The EU, for example, has been at the forefront with its ambitious Green Deal, aiming to make Europe the world’s first climate-neutral continent by 2050. This broad legislative framework directly impacts data centres alongside other sectors, mandating significant reductions in carbon footprints, increased reporting and disclosure under the Corporate Sustainability Reporting Directive (CSRD) and increased renewable energy targets under the recast Renewable Energy Directive (RED III).
In addition, the EU very firmly has the data centre sector more specifically in its sights with the EU Commission adopting on 15 March 2024 a new an EU-wide scheme to rate the sustainability of EU data centres as foreseen under the recast Energy Efficiency Directive (EED). Under the scheme data centres will be required to publish information on their energy performance and sustainability and this information, along with KPIs, will form part of an EU database. The delegated regulation, which defines the initial sustainability indicators that will be used for the rating of data centres, requires data centre operators to report the key performance indicators to the European database by 15 September 2024 and then by 15 May in 2025 and subsequent years.
The new scheme is part of ‘promoting climate-neutrality actions for the IT sector’ foreseen in the EU Commission’s Action Plan for the Digitalisation of the Energy Sector, issued in October 2022. It is intended to increase transparency and potentially to promote new designs and efficiency developments in data centres that can not only reduce energy and water consumption, but also promote the use of renewable energy, increased grid efficiency, or the reuse of waste heat in nearby facilities and heat networks.
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) was also adopted by the EU Council on 15 March 2024 paving the way for it to be passed into law in a European Parliament vote currently scheduled for April.
After significant last minute setbacks and negotiations between member states it now requires EU-based companies with global turnover of at least €450m and 1000 employees to identify, mitigate and prevent negative impacts on human rights and the environment in their upstream and downstream supply chains, or risk being fined up to 5% of net turnover.

Regulations and updates in the UK
Whilst in the UK there are fewer regulations currently specifically targeting sustainability in the sector there are plenty of general regulations which already impact data centre operators including the Building Regulations in England and the Minimum Energy Efficiency Standards (MEES) both of which were tightened in 2023. The Energy Act 2023 provided powers for government to implement heat network zoning in England through regulations which will impact the sector amongst others and there are the existing voluntary schemes such as the Climate Change Agreement for Data Centres which sets out specific targets for energy efficiency, encouraging operators to adopt greener practices or face stringent penalties.
Large UK companies are already required to report publicly on their UK energy use and carbon emissions within their Directors’ Report under the Streamlined Energy & Carbon Reporting (SECR) framework implemented by the Department for Business, Energy and Industrial Strategy (BEIS) but as most operators in the sector operate internationally it is already more likely than not that operators in the UK will be looking to comply with the various more prescriptive EU regulations from the start.

US Initiatives
Across the pond, the United States is also stepping up its game building on previous voluntary initiatives such as the Energy Star certification for data centres, a voluntary labelling programme providing certification for qualifying data centres, and the Department of Energy’s Better Buildings Challenge designed to encourage facilities to improve their energy efficiency and reduce their environmental impact.

On 6 March 2024, the US Securities and Exchange Commission (the SEC), approved final rules requiring companies to disclose certain climate-related information in registration statements and annual reports. Whilst on March 15, 2024, the US Court of Appeals for the Fifth Circuit granted an administrative stay of the final rules in response to a request for review and therefore there is still some uncertainty regarding the implementation of the rules (both in terms of timing and the exact details of the rules) the direction of travel is still pretty clear and will define a new standard for data centre regulation in America.

All these regulatory changes in different parts of the world, though challenging, serve as a necessary push towards innovation and sustainability in the global data centre industry.
Compliance is now a watchword for the sector in the EU in 2024 and beyond not just for the purposes of regulatory compliance but also because customers, investors and the most talented employees are increasingly focused on the sustainability practices and ambitions of data centres. There are huge opportunities for data centre operators to turn compliance into a competitive advantage.

Embracing Green Measures: Where Theory Meets Practice

Acknowledging the necessity is one thing; implementing practical solutions is another. The journey towards sustainability requires a multifaceted approach, combining advanced technology, innovative design, and strategic planning. Let’s explore how some data centres are leading by example, not just in adopting green measures but in setting new standards for the industry.

The EcoDataCentre in Falun, Sweden, stands as a paragon of sustainability. It’s the world’s first climate-positive data centre, leveraging 100% renewable energy sources and a highly efficient cooling system that uses the cold Nordic air. What sets it apart is its integration with the local community’s energy system, where excess heat generated by the data centre is repurposed to warm surrounding buildings, highlighting a symbiotic relationship between technology and the environment.

Elsewhere in Europe, the Amsterdam Data Tower embodies efficiency and green technology. It also boasts an advanced cooling system that uses outside air and recycles waste heat, supplying it to nearby greenhouses. Furthermore, it’s powered by renewable energy, making sustainable operation possible without compromising on performance. The Google data centre in Hamina, Finland, is another notable example – utilising sea water from the Gulf of Finland for its cooling needs, significantly reducing its energy consumption.

Meanwhile, in the United States, data centres are also embracing the green revolution. Facebook’s data centre in Fort Worth, Texas, for example is supported by 100% renewable energy and aims to be water positive by 2030 – restoring more water than it consumes.

The Path Forward: Sustainability as a Competitive Advantage

The transition to greener data centres is not just an ethical or regulatory imperative but a strategic business move. In an era where consumers are increasingly conscious of their environmental impact, companies that demonstrate a genuine commitment to sustainability stand to gain a competitive edge. Investors are increasingly attracted by sustainable business practices and commitments for future innovation. This shift is already evident, with a growing preference for green cloud services and sustainable data storage solutions among both individuals and corporations.

Moreover, sustainable practices can lead to significant cost savings over time, particularly in terms of energy consumption and operational efficiencies. By investing in advanced cooling technologies, renewable energy sources, and energy-efficient infrastructure, data centres can reduce their overheads while simultaneously enhancing their corporate reputation.

Sustainability : A challenge and an opportunity

The increasing need for sustainability measures in data centres is both a challenge and an opportunity. As we’ve seen, recent regulatory changes across the globe are pushing the industry towards a greener future. Examples from the UK, Europe, and the US highlight the innovative approaches being taken to minimise environmental impact while maintaining, if not improving, operational efficiency.

For data centre operators the message is clear: sustainability is no longer an optional extra but a crucial component of strategic planning and operations. By embracing green measures, investing in sustainable technologies, and fostering a culture of innovation, data centres can not only comply with regulatory demands but also lead the way in the global shift towards a more sustainable and environmentally responsible technology sector.

As we look to the future, it’s evident that the data centres that thrive will be those that view sustainability not as a burden but as an opportunity to innovate, differentiate, and contribute to a more sustainable world.

*Source: Engie Global Energy Report