Big Tech’s data centre boom poised to drive up carbon emissions

Big Tech’s data centre building boom could create a huge new source of carbon emissions as the surging demand for electricity sparks a wave of fossil-fuel power plants, despite companies’ climate commitments.

An FT analysis of 60 of the largest planned data centres being built in the US by Amazon, Microsoft, Google and Meta found that they could together produce 101.5mn tonnes of carbon dioxide emissions a year once fully operational, based on the most recent snapshot of US power generation.

That would be equivalent to about 7 per cent of US power-sector emissions in 2025 — the annual emissions of 27 coal plants or 24mn petrol-powered cars.“This is a reasonable ballpark estimate,” said Jonathan Koomey, an energy researcher who has studied energy efficiency and climate solutions. “It is a relatively small fraction of the total but it’s still a big increase compared to what the data centre companies were saying they were going to do five years ago, because they all had emission-reduction plans.”
The data centre boom is also spurring the construction of new fossil-fuel power plants. Three-quarters of the utilities serving the 60 projects are planning or building new gas-fired capacity, according to the FT’s analysis, based on utility filings, S&P data and analytics firm DC Byte. A third of those that operate coal plants are also delaying retirements.

The FT estimates underscore how the AI infrastructure boom threatens to undermine years of progress in cutting emissions from US electricity generation, even as Big Tech companies pledge billions of dollars for clean energy.

The US power grid has added more clean energy since 2023. But as many utilities servicing these data centres build more clean energy, they are also doubling down on fossil fuels because they face surging power demand.

“Any time you increase demand on the grid you are in all likelihood going to see increased emissions,” said Aaron Bergman, a fellow at Resources for the Future.

Seventeen per cent of utility operators serving these 60 data centres have explicitly told regulators that new gas plants are being built to meet the electricity demand from a specific hyperscale data centre.

“When demand spikes, utilities turn towards their easy button, which has always been adding new gas generation,” said Taylor McNair, deputy director of clean-energy consultancy GridLab. “For a couple of years, there was a lot of progress being made on deployment in new renewables.

“This new load growth phenomenon that we’re on has definitely put a wrench in things.”

The US nearly tripled its gas-fired capacity in development in 2025, which could increase its existing gas fleet by nearly 50 per cent if all plants are built, according to Global Energy Monitor. More than one-third of this capacity is to power data centres on site.

The uptick in gas capacity comes as the Trump administration has dismantled climate rules and cut clean energy tax incentives to promote the fossil fuel industry. Meanwhile, utilities and grid operators have started to prioritise fossil fuels because they need reliable around-the-clock power.

Despite corporate climate commitments from Big Tech companies, some have acknowledged in recent sustainability reports that their emissions have increased due to data centre build-outs.

Amazon’s latest sustainability report said that its emissions increased 16 per cent from 2024 to 2025, driven by data centre construction and fuel used for deliveries. It added that emissions related to purchasing electricity increased 34 per cent.

Microsoft said that its total emissions increased by 25 per cent in the same period, driven primarily by the expansion of its data centre infrastructure.

Alphabet also reported its “ambition-based” emissions — the company’s adjusted metric — increased 18 per cent, fuelled by increases in supply-chain activities that supported the “rapid expansion” of its business.

“We recognise that our climate impact has been growing alongside the unprecedented growth of AI, and we’re actively working to minimise this impact,” Alphabet said in the report. Without its other decarbonisation efforts, the company said its 2025 carbon footprint would have been five times larger, it added.

All four tech giants have made plans to match their electricity consumption with investments in clean energy, often through the use of renewable energy credits.

Amazon told the FT that it invested billions of dollars in carbon-free electricity and had matched 100 per cent of the electricity consumed by its operations with renewable energy elsewhere. Microsoft said it has continued to invest heavily in carbon-free electricity and other decarbonisation technologies.

Google said the company was one of the largest corporate purchasers of clean energy in the world and that it had matched all of its global electricity consumption with renewable energy purchases for nine consecutive years. Meta declined requests to comment.

“The problem with voluntary reductions is they’re expensive and they reduce profits,” said Michael Greenstone, director of the Energy Policy Institute at the University of Chicago. “Eventually, capital markets are going to force the firms to peel back some of their carbon mitigation efforts.”

Research company Rhodium Group estimated in an April report that supply-chain bottlenecks, jammed interconnection queues and challenges to permit applications could hinder clean-energy additions on the grid. That could force utilities to run existing gas and coal generation harder, worsening emissions before new plants even come online.

“Clean energy additions need to keep pace with data centre electric demand to maintain a path for emissions declining, but that’s not a given,” said John Larsen, a partner at Rhodium Group.

Data centres are the largest driver of energy demand growth, according to a Grid Strategies report, representing about 55 per cent of utility load forecasts over the next five years. Many of these utilities are responding by planning new gas generation alongside renewable projects, and some are delaying coal-plant retirements.

Georgia Power, which is servicing Amazon and Microsoft data centres, recently asked state regulators to allow the utility to produce 9,885MW of new generating capacity and said most of it would serve new large customers such as data centres.

Although the utility is planning on building renewables to meet a majority of that demand, it has 5,234MW of new gas capacity that is planned and under construction in the state, according to S&P data. The utility has also delayed the retirement of its coal plants that it said in filings it needed to run through 2035 or later. “We’re proud of our diverse energy mix, which includes a variety of generation sources to serve customers,” the utility said in response to the findings.

Other utilities have been more explicit. Entergy Louisiana is building nearly 10,000MW of new gas capacity, including 10 gas plants for Meta’s new data centre in Richland Parish.

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“Entergy Louisiana is using modern, highly efficient gas generation and new transmission upgrades to reliably serve Meta’s large-scale data centre, capacity that renewables alone can’t yet provide at this scale,” the company said. State regulators recently approved up to 1,500MW of solar, and the utility has proposed another 2,500MW of solar to meet demand, the company added.

Meta’s data centre projects in El Paso and Richland Parish are both temporarily going to be powered by gas plants that are not connected to the grid. But the utilities aim to connect both the new gas assets and the data centres to the grid in the future.

Some data centre operators, facing a rush to add power, have started securing their own energy resources “behind the meter”, which are not connected to the power grid. Most of these energy sources overwhelmingly rely on natural gas, according to data from Rystad Energy.

The US Energy Information Administration reported recently that carbon dioxide emissions increased by 2 per cent last year, largely driven by increases in power-sector electricity demand, in part from data centres.