Data Center Firm Backed by Oaktree Plans to Sell Carbon Credits to Hyperscalers
(Bloomberg) -- Pure Data Centres, a UK firm backed by private credit specialist Oaktree Capital Management, is launching a platform to sell carbon-removal credits to large cloud-computing providers.
Through its climate-technology subsidiary, A Healthier Earth, Pure DC says the credits will help expand a market viewed as critical to corporate efforts to limit carbon pollution. The initiative comes as many data centers continue to rely on fossil fuels to meet soaring power demand, driving up greenhouse gas emissions.
For companies seeking a way to offset the ballooning carbon emissions from running AI workloads, carbon-removal credits represent an essential tool, Alastair Collier, the firm’s chief research and development officer, said in an interview.
The challenge is that “credits aren’t available and the scale of the market doesn’t exist to satiate demand,” he said.
Pure DC is among companies betting on a quick uptake of AI applications in Europe, where investors and consumers are more concerned with climate goals than in the US. The Oaktree-backed firm last year sought to raise cash from other investors for an implied valuation of as much as £5 billion ($6.7 billion). The goal is to build large-scale AI campuses across Europe and the UK targeting a total capacity of 3 gigawatts that it says could be rented out to technology firms.
Collier says that by the end of 2029, Pure DC’s annual offering of carbon-removal credits will be as high as 100,000, which is equivalent to the greenhouse gas emissions of roughly 23,000 passenger cars. The company will also sell credits from its own carbon projects, as well as those created by its partners, he said.
The massive build-out of energy-hungry AI data centers makes them among the few sectors set to see a rise in emissions into 2030, according to the International Energy Agency. That’s in part as they continue to rely on natural gas, it said. Addressing this uptick in emissions means carbon removal will be a necessary component of the data-center boom, Collier said.
Microsoft Corp. has long stood out as by far the largest investor in carbon-removal credits. However, the company has shown signs of adjusting its climate commitments in its efforts to keep up in the AI race, raising concerns about demand for such credits.
Pure DC said combining data-center development with verified carbon-removal services creates “a critical commercial differentiator” that will appeal to hyperscaler customers and global corporates seeking to address residual emissions.
A Healthier Earth, the Pure DC subsidiary, is developing a carbon project in the UK county of Wiltshire. Credits generated will each represent 1 metric ton of carbon dioxide that’s been taken out of the atmosphere via biochar, which is what’s left after heating biomass and other agricultural waste. Biochar, though still a niche corner of the cabon-offsets market, can store CO2 for hundreds of years.
The company aims to complete verification and first credit issuance from its biochar facility before the end of this year. It won’t use any of the credits generated from its biochar projects, or any co-developed projects, to offset its own emissions.
Pure DC has close ties with the UK government, and is currently constructing a data center in Ireland that’s designed to be self-sufficient. Collier worked for the National Grid before joining the firm.
(Adds BNEF reference. A previous version corrected the final paragraph, to show that Collier worked for the National Grid.)
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