Emissions from company-owned data centres of big technology giants Google, Microsoft, Meta and Apple are likely around 7.62 times higher than officially reported, according to a recent analysis by the Guardian.
These companies’ emissions still dwarf those of Amazon, the largest emitter of the big five tech conglomerates. Amazon’s emissions were more than double that of the second-largest emitter, Apple, in 2022. Because of Amazon’s unique business model and the associated difficulty in isolating emissions solely from “in-house” data centres, they were left out of the Guardian’s research.
If the five companies were one country, the sum of their “location-based” emissions — the actual emissions where data is being processed, not including offsets — in 2022 would put them as the 33rd highest emitting country in the world.
With the rise of artificial intelligence (AI) and the continued push for new technologies in all areas of business, there has been a growing demand for data centres. The energy these data centres increasingly use produce high levels of carbon emissions. The International Energy Agency reported that in 2022, 1% to 1.5% of energy consumption worldwide was due to data centres. This was before the AI revolution reached the general public with ChatGPT.
AI has proven to be more energy-intensive than cloud-based applications. A Goldman Sachs report stated that a ChatGPT query requires almost 10 times the electricity used by a Google query. The analysis also predicted a 160% increase in data centre energy demand by 2030. Morgan Stanley projected a similar figure, predicting data centre emissions to reach 2.5 billion metric tons of CO2 by 2030.
This all comes as companies in the tech space and beyond have promised greener operations and even carbon neutrality. Most recently, Amazon claimed it met its goal of carbon neutrality seven years before the target date, cutting gross emissions by 3%.
Not all employees of the tech giant are satisfied. “It’s down to creative accounting,” explained an Amazon Employees for Climate Justice representative, an advocacy group of current Amazon employees unhappy with the company’s work to protect the environment. “Amazon – despite all the PR and propaganda that you’re seeing about their solar farms, about their electric vans – is expanding its fossil fuel use, whether it’s in data centres or whether it’s in diesel trucks.”
Within these loopholes or “creative accounting” are renewable energy certificates (Recs). These certificates show that a company is purchasing renewable electricity to compensate for its own electricity consumption. These Recs, however, can reflect energy consumed anywhere in the world, far from a company’s operations. This is why location-based emissions can tell a different story, one where companies are not in fact carbon neutral.
“Location-based [accounting] gives an accurate picture of the emissions associated with the energy that’s actually being consumed to run the data centre. And Uptime’s view is that it’s the right metric,” Jay Dietrich, the research director of sustainability at leading data centre research organisation the Uptime Institute, told the Guardian.
Despite backlash, Amazon and Meta are leading the charge to keep Recs in the accounting process for emissions. Google and Microsoft, on the other hand, argue for a time-based and location-based renewable energy reporting. For Google, this is the 24/7 goal. They aim to have all of their facilities run on renewable energy 24 hours per day, seven days per week, by 2030.
For Microsoft, this is the 100/100/0 goal where the company aims to have 100% of its facilities run on 100% carbon-free energy while buying zero carbon-based energy, also by 2030. Both companies plan to phase out Recs by 2030.
Environmentalists for every industry across the world have long argued against the Greenhouse Gas protocol’s (GHG) allowance for Recs. In a 2015 open letter from GHG accounting practitioners and academics, it was argued that “it should be a bedrock principle of GHG accounting that no company be allowed to report a reduction in its GHG footprint for an action that results in no change in overall GHG emissions. Yet this is precisely what can happen under the guidance given the contractual/Rec-based reporting method.”
Within the GHG protocol, scope 2 reflects the emissions that are most related to in-house data centres, mainly concerning electricity. Within scope 2 is where the stark difference between reported emissions and location-based emissions can be seen. In Meta’s case, its official scope 2 emissions were reported to be 273 metric tons of CO2 in 2022 — all from data centres. With location-based emissions accounting, this grows to 3.8 million metric tons of CO2 — a 19,000 times increase.
With Microsoft, official reporting showed 280,782 metric tons of CO2 emissions from data centres in 2022. Location-based emissions accounting would reflect 6.1 million metric tons of CO2 equivalent. An almost 22 times increase.
These big tech firms also often outsource a large amount of their data centre capacity to third-party operators. Large tech companies accounted for 37% of data centre capacity globally in 2022, with half of that coming from outsourced contracts, according to Synergy Research Group.
The emissions coming from outsourced data centres would be included in scope 3 of the GHG protocol accounting. Also included in scope 3 would be any emissions from construction of in-house data centres. The outsourcing of these contracts leads to difficulties in fully accounting for emissions, explains Dietrich, saying: “Scope 3 emissions are hugely uncertain, this area is a mess just in terms of accounting.”
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Additionally, third-party data centre emissions may be accounted for in scope 2 reporting for the third-party, negating the need for Google or Apple, for example, to report it in their scope 3. As a result, many big tech giants underreport their scope 3 emissions.
Still, the energy needs of data centres continue to rise, and this cannot yet be hidden in company reporting. Google and Microsoft both pointed to the AI boom as the reason for their increased emissions of late.
“The relative contribution of AI computing loads to Google’s data centres, as I understood it when I left [in 2022], was relatively modest,” said Chris Taylor, former site lead for Google’s data centre energy strategy unit and current CEO of Gridstor. “Two years ago, [AI] was not the main thing that we were worried about, at least on the energy team.”
It remains to be seen if today’s power grids can withstand these huge energy demands in their current state. CEO of DigitalBridge Marc Ganzi, whose firm owns two of the world’s biggest third-party data centres, claimed that the data centre industry could run out of power by 2027.
As bottlenecks and capacity issues continue to arise across the world, the impact of data centre’s energy needs could be widespread. With regards to the protection of the environment and planet in particular, the emissions created by data centres could be devastating and yet they remain misunderstood and misreported by some of the world’s biggest companies.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Cover Photo Credit: Goodfon.
