Data centres have become the physical backbone of the digital economy, enabling artificial intelligence, cloud computing, financial services, smart cities and everyday services. As demand for data processing and storage accelerates, ASEAN is emerging as a strategic region for data centre development, supported by regional connectivity, available land in selected markets, competitive operating conditions, government support for digital investment and a growing renewable energy policy landscape [11].
Singapore is a mature data centre hub with an established base of digital infrastructure, but its land, energy and water constraints have shifted its policy direction toward selective, sustainable growth. Through its Green Data Centre Roadmap, Singapore aims to provide at least 300 MW of additional data centre capacity in the near term, with further capacity linked to green energy deployment and improved energy efficiency [1]. Singapore has also introduced a Tropical Data Centre Standard, recognising that hot and humid climates make cooling especially challenging, accounting for up to 40% of a data centre’s total energy use [2]. Malaysia, by contrast, is emerging as a high-growth hub, particularly through Johor and Klang Valley. Between 2021 and Q1 2025, Malaysia recorded RM144.4 billion in approved data centre investments, signalling strong investor confidence in Malaysia’s digital infrastructure ecosystem [3]. Furthermore, Johor’s proximity to Singapore, land availability and growing infrastructure base have positioned it as a key spillover market for regional data centre expansion [12].
Based on these market and policy trends, it is evident that the region’s strategic priority is to optimise data centres while balancing expansion for sustainable growth. Singapore’s optimised approach and Malaysia’s expansion trajectory provide complementary reference points for ASEAN. We are likely to witness from Singapore and Malaysia a regional data centre model that supports digital growth while managing electricity demand, water consumption, carbon emissions, e-waste, backup power impacts and local infrastructure pressure [11].
ASEAN’s data centre boom is both an economic opportunity and a sustainability test. The region needs data centres to support AI, cloud computing, enterprise digitalisation, e-commerce, financial services and public sector digital transformation. Data centres are high resource usage facilities that operate continuously and require reliable electricity, advanced cooling, water management, backup systems and periodic hardware replacement [11]. In many ASEAN markets, particularly tropical data centre hubs such as Singapore and Malaysia, hot and humid conditions mean data centres have to work harder to cool and dehumidify server rooms. Every new server does not only add computing capacity, it also adds cooling pressure, electricity demand, water demand and carbon risk. Singapore’s Tropical Data Centre Standard directly recognises this tropical constraint, noting that cooling can account for up to 40% of total data centre energy use and that operating data centres in a tropical climate requires careful temperature and humidity management. On the other hand, in Europe, some data centres can use naturally cool outside air for part of the year, which reduces the need for mechanical cooling [2]. Generally, it is estimated that cooling can account for up to 30%-50% of a facility’s total energy consumption in hot and humid climates, compared to 15%-30% in temperate climates [13]. For ASEAN, sustainable data centre development must therefore be designed around climate-adapted operations, not only generic global best practice.
Globally, the International Energy Agency projects data centre electricity consumption to roughly double from 485 TWh in 2025 to 950 TWh in 2030, with AI focused data centres growing even faster [4]. This global growth trajectory is directly relevant to ASEAN as hyperscalers and AI infrastructure providers expand across the region. Malaysia provides an early signal of the scale of this challenge, with data centre energy demand projected to exceed 5,000 MW by 2035 [5]. If growth is not paired with energy efficiency and grid readiness planning, data centre expansion could place pressure on national electricity systems, local power infrastructure and future decarbonisation pathways. Appropriately, Singapore’s Green Data Centre Roadmap addresses this pressure by linking additional capacity to energy efficiency and green energy deployment, while newer standards and certification tools are intended to raise the sustainability performance of both existing and new data centres [1]. This approach reflects a clear policy logic, in a resource constrained market, the priority is not simply to build more, but to make each unit of capacity more efficient, resilient and sustainable. Malaysia faces a different but equally important policy challenge. As a high-growth hub, Malaysia has greater room for expansion, particularly in Johor and Klang Valley. However, this expansion must be managed carefully to avoid locking in inefficient or carbon intensive infrastructure. Accounting for this, Malaysia’s Guideline for Sustainable Development of Data Centre introduces sustainability expectations around energy efficiency, water efficiency, carbon reduction and renewable or clean energy adoption, including the use of PUE, CUE and WUE as sustainability measurements [6]. The MCMC MTSFB Green Data Centre Technical Code further supports this direction by providing technical guidance for green data centre design and operations [7]. A key data center policy challenge for Malaysia is therefore to embed sustainability requirements early, while the sector is still scaling.
Other than intense energy needs, data centres generate heat and require continuous cooling to protect IT equipment. In tropical climates, cooling demand is structurally higher, and some cooling systems may require significant water use. UNEP highlights, citing the World Economic Forum, that a 1 MW data centre can consume up to 25.5 million litres of water annually for cooling [8]. This makes water stewardship especially important in fast growing clusters where data centre water demand may compete with households, industries and local ecosystems. Malaysia’s guideline recognises this by incorporating WUE as a core sustainability metric, while Singapore’s Green Data Centre Roadmap places water efficiency within its broader sustainability pathway [6, 1].
An equally important consideration for the sustainable operations of data centers is its energy source. A data centre can operate efficiently but still remain carbon intensive if the electricity it consumes comes from a fossil heavy grid. The IEA states that data centres connected to electricity grids with lower shares of fossil-fuel generation have lower associated emissions, and reports that data centres and data transmission networks accounted for around 330 Mt CO₂e in 2020, including embodied emissions [9]. For ASEAN, this means that data centre sustainability depends not only on facility level performance, but also on the carbon intensity of electricity supply. Renewable electricity access, credible power purchase agreements, green tariffs, renewable energy certificates and mechanisms such as Malaysia’s CRESS will be central to reducing carbon risk [10].
Lastly, lifecycle impacts should be built into ASEAN’s data centre sustainability agenda. Servers, batteries, networking equipment, backup systems and cables all require replacement over time. Poorly managed hardware turnover can contribute to e-waste, while diesel backup generation can add local pollution and emissions. For corporate leaders, regulators and investors, data centre sustainability should therefore be assessed across the full lifecycle of the facility, rather than only through operational electricity efficiency [11].
Conclusively, ASEAN’s common policy direction should be to optimise where resources are constrained, expand where infrastructure capacity exists, and ensure that all growth is tied to measurable sustainability performance [11]. In this aspect, Singapore and Malaysia provide a useful policy baseline for ASEAN. Singapore demonstrates how a mature, resource constrained hub can prioritise optimisation through selective capacity allocation, tropical climate standards, green energy deployment and performance certification [1], [2]. On the other hand, Malaysia demonstrates how a high-growth hub can support expansion while introducing sustainability expectations around energy, water, carbon and renewable electricity access [6, 10]. For ASEAN, the end goal should not be to become merely a larger host for global data centre infrastructure. The more strategic objective is to become a region known for building and operating data centres that are climate adapted, energy efficient, water conscious, low carbon and transparently governed. This requires stronger baseline expectations for PUE, WUE, CUE, and public disclosure. It also requires a shift in how data centre approvals are evaluated, not only by investment value or capacity, but by whether each project strengthens or strains the region’s long-term energy, water and climate resilience [11].
A credible sustainability assessment should not rely on one metric alone. While Power Usage Effectiveness (PUE) is widely used, it does not capture the full environmental impact of a data centre.
[1] Infocomm Media Development Authority, “SG announces Green Data Centre Roadmap for sustainable growth.”
[2] Infocomm Media Development Authority, “Tropical Data Centre Standard.”
[3] Bernama / MITI, “Data Centre Investment Surges To RM144.4 Bln.”
[4] International Energy Agency, “Key Questions on Energy and AI – Executive Summary.”
[5] ISEAS – Yusof Ishak Institute, “Data Centres, Energy Demand and Sustainability: Can Malaysia Strike the Right Balance?”
[6] Malaysian Investment Development Authority, “Guideline for Sustainable Development of Data Centre.”
[7] Malaysian Technical Standards Forum Bhd, “MCMC MTSFB TC G004:2024 Specification for Green Data Centres.”
[8] United Nations Environment Programme, “UNEP releases guidelines to curb the environmental impact of data centres.”
[9] International Energy Agency, “Data Centres and Data Transmission Networks.”
[10] Single Buyer, “Corporate Renewable Energy Supply Scheme.”
[11] ASEAN, “ASEAN Guide for Sustainable Data Centre Development.”
[12] Bernama, “Demand Boom, Resources Readiness Is Why Johor Fits Criteria As Data Centre Hub – MDEC.”
[13] Infocomm Media Development Authority, Turning the red dot, green: Helping data centres get better at staying cool
Written by: Neeran Niraj, Sustainability Associate at Aubrens
Edited by: Dr Janak Preet Kaur, Principal Sustainability Consultant at Aubrens
