The Data Center Surge Has a Hidden Source of Carbon Emissions

(Bloomberg) -- Data centers siphon huge amounts of energy to power artificial intelligence. But their environmental footprint starts to balloon even before the first server switches on due to the immense amount of carbon-intensive concrete needed to build them.

As the US data center buildout surges, with construction beginning on multibillion-dollar facilities from Texas to Wisconsin, tech companies are becoming buyers of low-carbon concrete.

Through 2030, data center expansion is expected to require 2 million metric tons of cement, the binding agent in concrete, according to environmental nonprofit RMI. If these facilities are constructed with traditional concrete, they could generate 1.9 million metric tons of CO2 emissions, according to Chandler Randol, a senior associate with the group’s cement and concrete team. That’s the equivalent of annual emissions from 415,000 gas-powered cars.

Concrete — as well as steel — is a significant portion of the emissions associated with building data centers, said Katherine Vaz Gomes, a decarbonization engineer at Carbon Direct, a climate advisory firm. 

“The boom in data centers is providing an opportunity to evaluate, address and move on the carbon impacts of concrete,” said Vaz Gomes. “As AI infrastructure explodes, data center construction is accelerating and bringing concrete demand with it.”

Microsoft Corp. announced a deal with low-carbon concrete maker Sublime Systems last year, allowing the tech company to purchase up to 622,500 metric tons of cement over a period of six to nine years. 

“As demand for AI and cloud services grows, we are advancing how we design, build, and operate our datacenters and campuses. Decarbonizing the built environment is a crucial element in this process,” Melanie Nakagawa, Microsoft’s chief sustainability officer, said. 

In August, Amazon.com Inc. struck a similar deal with startup Brimstone, but didn’t disclose how much concrete it would purchase. To help support the industry, Amazon, along with Meta Platforms Inc. and Prologis Inc., signed a low-carbon concrete pact in September called the Sustainable Concrete Buyers Alliance. The group was brought together by RMI and the Center for Green Market Activation, a nonprofit focused on decarbonizing industries. Its aim is “sending clear demand signals to producers” that they’ll find buyers of their low-carbon products, said Heather House, principal of RMI’s cement and concrete practice.

Amazon has started using low-carbon concrete in data centers under construction in Virginia and Oregon, and the company also invests in startups with the “potential to help accelerate decarbonization progress,” according to Chris Roe, the company’s director of worldwide carbon.

In addition to Brimstone, Amazon has also invested in CarbonCure, another startup that produces low-carbon cement. The tech company has also put in place carbon intensity standards for any concrete it uses that factor in production and transportation emissions, according to Roe.

The maturation of the green cement industry is going to require a lot of capital, said Christina Theodoridi, policy director for industry at Natural Resources Defense Council. The technology for low-carbon cement is there, but the industry hasn’t yet scaled to meet the enormous demand coming over the next several years. But the partnerships between large tech companies and startups are crucial. 

“Having an offtake agreement with a large data center is a very clear demand signal,” Theodoridi says. “That’s a really critical mechanism to scale up those technologies.”

Funding from big tech companies might not be enough, though. The green concrete industry was set to receive roughly $1.6 billion in support from the Inflation Reduction Act. But President Donald Trump pulled the funding last year. 

“That was going to breathe real momentum into the industry,” Theodoridi said. “The data centers present an opportunity for which we would have been much better prepared for had we continued those investments in heavy industry.” 

The impacts of funding cuts are starting to ripple through the industry. In December, Sublime laid off 10% of its staff, citing a loss of $87 million in government funding. It also said it was pausing construction on its factory in Holyoke, Massachusetts, which was scheduled to open as early as this year.

Data center operations will put much more carbon in the atmosphere than their construction. Operational emissions, however, can be lowered over time as data centers become more efficient or rely more heavily on clean energy. But using green building materials is the only way to reduce what’s known as the embodied emissions associated with data centers. 

And for tech companies to meet their climate goals, those emissions will have to be dealt with. “Quite a few of those large tech companies actually have quite aggressive and meaningful climate targets,” said Chris Magwood, a manager on RMI’s carbon-free buildings team. “Internally, they obviously have identified that data centers and particularly the concrete use in those data centers is a key driver for them.”

(Updates to include quote attribution in paragraph 8. A previous version corrected Chris Magwood’s team name in the final paragraph.)

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