An environmental group has warned that Malaysia’s booming data centre industry could soon generate as much carbon pollution in a year as the whole of Papua New Guinea.
In a report titled “Climate Impacts of Malaysia’s Data Centre Expansion”, RimbaWatch estimated that the 14 new data centres planned or currently under construction in Malaysia would add up to 2.2 gigawatts (GW) of capacity, of which 1.7GW has no immediate renewable energy plans.
RimbaWatch said this could lead to nearly 13,000 gigawatt-hours of electricity being pulled from Malaysia’s mostly fossil fuel-powered grid each year.
It said this could release about 9.9 million tonnes of carbon dioxide equivalent each year, which is comparable to that of countries like Papua New Guinea.
“To put it into perspective, that amount of carbon emissions is equivalent to adding more than two million passenger vehicles to Malaysia’s roads,” the group said.
According to RimbaWatch’s analysis, the 14 new data centres in Malaysia consist of three which were completed between 2023 and November 2024, two currently under expansion, five which are currently under construction, and four which have been proposed.
RimbaWatch director Adam Farhan said the group was concerned that the estimated emissions from activities in just one sector could drive an increase in emissions equivalent to that of entire countries.
“The reason for this high figure is the high fossil fuel intensity of Malaysia’s grid, which is still overwhelmingly reliant on fossil fuels,” he said.
As of 2022, fossil fuels made up about 81% of electricity generation, though more recent estimates place it closer to 90%.
While the government plans to retire coal-fired plants by 2044, it also intends to expand gas-fired capacity by 50% to meet the surging demand from energy-intensive facilities like data centres.
“Fossil fuels are the leading driver of global emissions,” said Adam.
“Malaysia must urgently commit to a just and rapid fossil fuel phase-out, especially when planning new infrastructure.”
The report also made several recommendations, including the development of a new carbon budget for the data centre sector, approval only for new centres that run on 100% renewable energy, the introduction of transparent public consultations for all projects, and the creation of a water usage plan to manage climate and resource risks.
RimbaWatch also called on Malaysia to support global climate efforts such as the proposed Fossil Fuel Non-Proliferation Treaty, a campaign from a network of over 3,900 civil society organisations aimed at creating a treaty to stop fossil fuel exploration and expansion.
Last year, The Straits Times reported that the demand for energy to supply Malaysian data centres in the next 10 years could surpass the available power.
It said that electricity demand from data centres in Malaysia was expected to exceed 5,000 megawatts (MW) by 2035, with Tenaga Nasional receiving applications for 11,000MW, equivalent to 40% of Peninsular Malaysia’s existing installed power-generation capacity of about 27,000MW.
Data centres in Malaysia are mainly located in Selangor and Johor. They also consume vast amounts of water for cooling.
A data centre with a capacity of 100MW uses about 1.1 million gallons of water per day for cooling, the equivalent of daily water usage in a city of 10,000 people, according to a US study.
On Wednesday, deputy prime minister Fadillah Yusof said the government was working with state regulators to introduce a specific water tariff for data centres and heavy industrial users, while encouraging the adoption of recycled water and district cooling systems to reduce the strain on clean water resources.
