Why is Emissions Compliance Critical for Data Centers?

By Ankit SinghReviewed by Laura ThomsonNov 4 2025

Data centers have become increasingly essential, driven by the growing demand for artificial intelligence (AI), cloud computing, and digital services. As economies shift toward greater digital engagement, data centers have emerged as some of the largest electricity consumers. Recent research indicates that data centers account for approximately 1 % of global energy consumption, comparable to the energy used by medium-sized countries. As online activities continue to rise, the energy demand from data centers is expected to grow significantly, raising concerns about their environmental impact.¹

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Emissions compliance is crucial for these facilities as it involves following regulations to reduce greenhouse gas emissions and other pollutants, such as nitrogen oxides and refrigerants. As consumers, investors, and regulators increasingly expect more environmental responsibility from businesses, data centers face challenges and opportunities. By adopting sustainable practices, they can play a key role in reducing emissions and contributing to a cleaner future.¹

What is Emissions Compliance?

Emissions compliance for data centers refers to the systems, policies, and standards implemented to measure, control, and mitigate emissions generated during normal operations. Major sources of these emissions are diesel generators used for backup power, electricity from the grid that is often produced using fossil fuels, and refrigerants in cooling systems that can leak potent greenhouse gases into the environment. These emissions are categorized into three scopes as defined by the Greenhouse Gas Protocol.^1,2

• Scope 1: Direct emissions from owned or controlled sources, such as on-site diesel generators
• Scope 2: Indirect emissions from the generation of purchased electricity used by the data center
• Scope 3: All other indirect emissions in the value chain, including emissions from the manufacturing of equipment, supply chain logistics, and emissions associated with cloud computing services

Regulatory bodies such as the United States Environmental Protection Agency (EPA), European Union (EU) regulators, and the California Air Resources Board (CARB) establish frameworks and regulations aimed at controlling emissions from various sources. For example, the EPA regulates generator emissions under the Clean Air Act, while the EU enforces emissions trading systems that include large data centers.?³

Why Does it Matter Now?

Emissions compliance has gained urgency due to sweeping government net-zero targets and climate policy mandates. Many countries now require data center operators to track and lower their emissions, with some enforcing penalties for non-compliance or inaccurate reporting.

Pressure from investors has intensified through the prioritization of Environmental, Social, and Governance (ESG) criteria. Customers also expect service providers to be transparent and to take clear, measurable actions toward sustainability.^1,4

Several industry studies highlight that carbon footprint, water usage, and energy sourcing have become core considerations for data center procurement decisions.

A recent analysis in Frontiers in Sustainability warns that expanding data centers in the US could increase CO₂ emissions by 0.4–1.9 % by 2030, an increase equivalent to up to 14 % of the power sector’s emissions during the same period.

Major companies like Google, Microsoft, and Amazon have experienced a 30–100 % rise in operational emissions over the past three years, leading them to set strong reduction targets.^1,4

Key Challenges

Achieving emissions compliance in data centers presents several complex challenges.^1,2,5

• Regulatory Patchwork: Data centers often operate across multiple regions subject to diverse and sometimes conflicting regulatory requirements. Navigating these differing rules is complex.
• Backup Generator Emissions: Diesel generators release harmful emissions such as nitrogen oxides, particulate matter, and carbon dioxide. Even though they are rarely used, strict regulations are in place to limit their environmental impact.
• Grid Reliance and Energy Mix: Most data centers draw electricity from the grid, where reliance on fossil fuels varies regionally. This impacts indirect Scope 2 emissions, which are difficult to control directly.
• Refrigerant Leaks: Cooling systems use refrigerants, such as hydrofluorocarbons (HFCs), which harm the environment. It is important to manage these leaks and switch to safer alternatives with low global warming potential (GWP), although this can be technically challenging.
• Tracking Scope 3 Emissions: These indirect emissions from suppliers and cloud service ecosystems are difficult to measure and regulate, but represent a large fraction of total impact.

Industry Solutions

Data centers are responding with various tactical and strategic solutions that support emissions compliance and accelerate efforts to reduce emissions.

Renewable energy procurement is a central approach, often realized through power purchase agreements (PPAs) and on-site solar or wind installations. Some hyperscale providers match annual consumption with renewable generation, dramatically lowering Scope 2 emissions. Battery storage is also starting to replace diesel generators, offering a cleaner backup option with fewer pollutants. Better cooling systems, such as liquid or immersion, save energy and reduce the risk of refrigerant leaks.^1,6

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Data centers use Data Center Infrastructure Management (DCIM) software and emissions tracking tools to enhance their energy management. These technologies can monitor and optimize energy and environmental performance in real-time. Leading companies such as Google, Microsoft, and Equinix are at the forefront, utilizing AI to predict emissions and actively engaging in industry standards to improve sustainability. These efforts show a strong commitment to reducing their carbon footprints and supporting regulatory compliance.^1,6,7

What’s Next?

The landscape for emissions compliance is defined by tightening global standards and growing attention to embodied carbon. The Climate Neutral Data Centre Pact is a key initiative that engages operators to meet the EU’s net-zero goals with clear timelines. Moreover, new regulations in Europe, the US, and East Asia require detailed reporting and verification of emissions from data centers. Some regions are also focusing on the environmental effects of construction and supply chains related to new data center projects.^4,8

Research initiatives focus on further decarbonizing the energy mix, integrating hydrogen fuel cells, and using AI-based modeling for predictive efficiency and better resource planning. Data center operators anticipate that compliance will extend beyond emissions to include water use, recycling, and transparency for customers and regulators.

Innovation in technical and management strategies will support deeper reductions across all scopes, positioning emissions compliance as a fundamental dimension of building and operating competitive, sustainable data centers.?^4,8

Final Takeaway

Emissions compliance is now central to modern data center management and carries significant legal, reputational, and operational weight. It is no longer just about avoiding regulatory penalties - data centers are expected to demonstrate genuine environmental responsibility to investors, customers, and the broader public.

As regulations tighten and digital emissions tracking becomes more transparent, staying compliant is emerging as a catalyst for innovation and long-term business resilience across the industry.

References and Further Reading

1. Jha, R. et al. (2025). Forecasting US data center CO₂ emissions using AI models: Emissions reduction strategies and policy recommendations. Frontiers in Sustainability, 5, 1507030. DOI:10.3389/frsus.2024.1507030. https://www.frontiersin.org/journals/sustainability/articles/10.3389/frsus.2024.1507030/full
2. Adhikari, N. et al.(2025). A Bibliometric and Systematic Review of Carbon Footprint Tracking in Cross-Sector Industries: Emerging Tools and Technologies. Sustainability, 17(9), 4205. DOI:10.3390/su17094205. https://www.mdpi.com/2071-1050/17/9/4205
3. Data Center Emissions Monitoring. (2025). Encino Environmental Services. https://encinoenviron.com/data-center-emissions-monitoring/
4. Aslan, T. et al. (2025). Toward climate neutral data centers: Greenhouse gas inventory, scenarios, and strategies. IScience, 28(1), 111637. DOI:10.1016/j.isci.2024.111637. https://www.sciencedirect.com/science/article/pii/S2589004224028645
5. Data center emissions and permitting challenges. (2024). Data Center Dynamics. https://www.datacenterdynamics.com/en/product-news/data-center-emissions-and-permitting-challenges/
6. World’s Leading Data Center and Cloud Operators with Zero Carbon Goals. Sunbird. https://www.sunbirddcim.com/infographic/world%E2%80%99s-leading-data-center-and-cloud-operators-zero-carbon-goals
7. Mogahed, D. E. et al. (2022). Applying the Data Center Infrastructure Management (DCIM) Tool to Enhance the Quality Management of the Data Centers by Decreasing the Unplanned Outage Reasons. International Journal of Innovative Research in Computer Science & Technology, 192–203. DOI:10.55524/ijircst.2022.10.4.23. https://ijircst.org/DOC/23-applying-the-data-center-infrastructure-management-dcim-tool-to-enhance-the-quality-management-of-the-data-centers-by-decreasing-the-unplanned-outage-reasons.pdf
8. Liu, F. H. et al. (2025). Decarbonising digital infrastructure and urban sustainability in the case of data centres. Npj Urban Sustainability, 5(1), 1-11. DOI:10.1038/s42949-025-00203-1. https://www.nature.com/articles/s42949-025-00203-1

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