{"id":60091488,"date":"2025-07-23T17:03:52","date_gmt":"2025-07-23T16:03:52","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60091488"},"modified":"2025-07-30T15:39:09","modified_gmt":"2025-07-30T14:39:09","slug":"can-malaysias-ai-data-centres-go-green","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/","title":{"rendered":"Can Malaysia\u2019s AI data centres go green?"},"content":{"rendered":"\n

Data centres are springing up across Southeast Asia as China and the US vie for AI supremacy. Tech giants \u2013 from ByteDance and Alibaba to Google and Microsoft \u2013 are setting their sights<\/a> on Johor, Malaysia\u2019s manufacturing hub just across the strait from Singapore. A rich agricultural state, Johor is now also home to sprawling data centre parks.<\/p>\n\n\n\n

Since 2023, Malaysia has announced<\/a> MYR 99 billion (USD 23.4 billion) in data centre investments, much of it involving AI facilities, with a further MYR 149 billion (USD 35.2 billion) in the near future. With cheap electricity, labour and ample land, Malaysia has proven to be a compelling alternative<\/a> to its land-constrained neighbour and is set to become the fastest-growing<\/a> data-centre hotspot in Southeast Asia. <\/p>\n\n\n\n

Like many of its regional neighbours, Malaysia is positioning itself as an intermediary between the US and China amid their trade war. However, this tightrope is growing more difficult to walk \u2013 a Chinese company was recently accused<\/a> of renting Malaysian data centres via third parties, gaining indirect access to advanced, US-designed microchips that are restricted by US export controls. Weeks after an investigation into that case was launched, the US announced that Malaysia will face 25% tariffs<\/a> from August, though talks over a trade deal are ongoing between the two nations.<\/p>\n\n\n\n

\u201cWe can expect a continual and delicate balancing act where Malaysia seeks to avoid taking definitive action that antagonises either the US or China,\u201d says Ewan Lusty, a director at Flint Global, a firm offering policy and regulations advice to businesses.<\/p>\n\n\n\n

Counting the carbon<\/h2>\n\n\n\n

The surge strengthens Malaysia\u2019s role in the global data centre supply chain, but also raises environmental concerns. Shabrina Nadhila, Southeast Asia energy analyst at Ember, warns that the rise of energy-hungry server farms risks increasing emissions and \u201clocking in fossil-fuel infrastructure that may become stranded\u201d.<\/p>\n\n\n\n

AI data centres require advanced computing to train and run large machine learning models, consuming significantly more energy than conventional data centres.<\/p>\n\n\n\n

A key sustainability measure used by the industry is Power Usage Effectiveness (PUE). This ratio compares the energy used for facility operations, such as cooling, lighting and ventilation, against that for computing. A perfect PUE score<\/a> of 1.0 would mean that every watt powers computation alone. Hyperscale data centres, which host tens of thousands of servers, are more efficient and can achieve scores as low as 1.1. But PUE only tells part of the story. \u201cIt\u2019s an internal sustainability metric,\u201d says Wei Yang Khoo, a research associate at the Khazanah Research Institute (KRI) in Malaysia. He notes that PUE overlooks where the electricity comes from, how much is used overall, and the emissions tied to its generation.<\/p>\n\n\n\n

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Even the most technically efficient data centre can have a significant environmental footprint if it runs on fossil fuels. Khoo highlights<\/a> that hyperscale data centres consume between 20-100 megawatts (MW) of power; \u201cenough energy to power a small city\u201d. Up to half of the total energy consumption is for cooling the computer systems using vast air conditioning and cooling set-ups that use large amounts of water and energy.<\/p>\n\n\n\n

In 2024, 81% of Malaysia\u2019s electricity came from fossil fuels, much of it coal-fired<\/a>. That reliance jars with corporate sustainability claims and is a challenge to the government\u2019s National Energy Transition Roadmap, which targets<\/a> 70% renewable capacity by 2050. Ember projects that data centre electricity demand will surge<\/a> from 9 terawatt-hours (TWh) in 2024 to 68 TWh by 2030.<\/p>\n\n\n\n

Malaysia\u2019s fossil-fuel-heavy grid makes integration of renewables expensive and slow. It\u2019s common for data centres to buy renewable energy certificates (RECs) to offset emissions, but \u201cthey could be using very dirty coal-fired power in Malaysia and then just buy cheaper RECs elsewhere\u201d, says Khoo. Without standardised accounting, double-counting<\/a> is a real risk, he adds.<\/p>\n\n\n\n

Last year Malaysia launched its Corporate Renewable Energy Supply Scheme (Cress<\/a>), which allows large corporate consumers to procure renewable energy directly from independent power producers. But uptake of the scheme has slowed because of added fees it has imposed on producers to access the network and help maintain it, meaning businesses are currently paying a premium<\/a> for transitioning to renewable energy.<\/p>\n\n\n\n

Can data centres drive the transition?<\/h2>\n\n\n\n

Some industry voices insist that data centres can be part of the solution. \u201cData centres actually play a critical role in accelerating the transition towards renewable energy by driving demand for clean power and investing in innovative energy solutions,\u201d says Lusty.<\/p>\n\n\n\n

He notes that Cress can help align energy-intensive sectors like data centres with national decarbonisation goals. Facility operators may also face pressure to meet environmental, social and governance (ESG) targets from global investors and clients.<\/p>\n\n\n\n

This whole idea of a sustainable data centre is itself an oxymoron<\/blockquote>Sara Loo, associate research officer, ISEAS-Yusof Ishak Institute<\/cite><\/div><\/div>\n\n\n\n

Yet not all renewable efforts are created equal. Australian data infrastructure company AirTrunk recently announced a rooftop solar project<\/a> at its JHB1 campus in Johor that will generate just 1 MW \u2013 less than 1% of the facility\u2019s 150 MW load. This illustrates what Sara Loo, associate research officer at Singapore\u2019s ISEAS-Yusof Ishak Institute, describes as the illusion of progress created by highly visible but marginal solar installations. As Loo puts it, \u201cthis whole idea of a sustainable data centre is itself an oxymoron\u201d because these facilities are inherently energy intensive, water intensive and carbon emitting. Despite growing pressure to go green, the core model remains environmentally costly, she notes.<\/p>\n\n\n\n

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Malaysia\u2019s environment minister Nik Nazmi Nik Ahmad said<\/a> earlier this year that the data centre boom can support the country\u2019s renewable-energy system. Malaysia had become \u201cmore selective\u201d when approving new data centre projects because of water and energy constraints, he highlighted. But the minister added that tech companies are expected and \u201cwilling to pay a premium\u201d, enabling them to \u201cpush boundaries\u201d in renewable energy and water-recycling systems in ways that many other industries cannot afford.<\/p>\n\n\n\n

Unlike Singapore, which imposed a moratorium<\/a> on new data centres from 2019 to 2022 to assess how it could manage its data centre growth sustainably, Malaysia is therefore not likely to slow down. \u201cJohor is benefiting a lot from the moratorium that Singapore [had] in place,\u201d Loo explains. But she cautions that Malaysia\u2019s ongoing expansion into data centres, supported by an incentive-based approach focused on efficiency optimisation, may not sufficiently address the environmental and social impacts of energy and water consumption at the local and national level. Loo notes that the long-term consequences of this growth remain uncertain.<\/p>\n\n\n\n

Nadhila highlights Singapore\u2019s successful policy approach, which includes grants<\/a> for green building upgrades and research<\/a> aimed at boosting data centre efficiency, as a strong regional example. \u201cTargeted incentives can accelerate adoption of clean technologies,\u201d she says, but \u201cestablishing a clear sustainability framework from the outset is also critical; once data centres are operational, retrofitting becomes much harder\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

A wave of AI server farms is turning Malaysia into Southeast Asia\u2019s digital epicentre, but their high energy use could derail the country\u2019s climate goals<\/p>\n","protected":false},"author":50000797,"featured_media":60091495,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[40027749,513,50041599],"hashtags":[],"country":[20000110,50040718,50040719,50040700],"class_list":["post-60091488","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-big-data","tag-carbon-emissions","tag-energy-consumption","country-china","country-malaysia","country-singapore","country-united-states-of-america"],"acf":[],"yoast_head":"\nCan Malaysia\u2019s AI data centres go green? | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"A wave of AI server farms is turning Malaysia into Southeast Asia\u2019s digital epicentre, but their high energy use could derail the country\u2019s climate goals\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can Malaysia\u2019s AI data centres go green?\" \/>\n<meta property=\"og:description\" content=\"A wave of AI server farms is turning Malaysia into Southeast Asia\u2019s digital epicentre, but their high energy use could derail the country\u2019s climate goals\" \/>\n<meta property=\"og:url\" content=\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\" \/>\n<meta property=\"og:site_name\" content=\"Dialogue Earth\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-23T16:03:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-07-30T14:39:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/07\/Data-center-building-under-construction-in-Johor-Malaysia_Vincent-Thian_Associated-Press_Alamy_2STHTE3-1200px-copy.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Genevieve Mallet\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\"},\"author\":{\"name\":\"Genevieve Mallet\",\"@id\":\"https:\/\/dialogue.earth\/en\/#\/schema\/person\/c885674e7c387111fffa078f3addbdd6\"},\"headline\":\"Can Malaysia\u2019s AI data centres go green?\",\"datePublished\":\"2025-07-23T16:03:52+00:00\",\"dateModified\":\"2025-07-30T14:39:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\"},\"wordCount\":1125,\"publisher\":{\"@id\":\"https:\/\/dialogue.earth\/en\/#organization\"},\"image\":{\"@id\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/dialogue.earth\/content\/uploads\/2025\/07\/Data-center-building-under-construction-in-Johor-Malaysia_Vincent-Thian_Associated-Press_Alamy_2STHTE3-1200px-copy.jpeg\",\"keywords\":[\"Big data\",\"Carbon emissions\",\"Energy consumption\"],\"articleSection\":[\"Energy\"],\"inLanguage\":\"en\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\",\"url\":\"https:\/\/dialogue.earth\/en\/energy\/can-malaysias-ai-data-centres-go-green\/\",\"name\":\"Can Malaysia\u2019s AI data centres go green? 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