China’s top technology companies have made limited progress in meeting their renewable energy targets as the sector’s energy consumption is expected to rise due to demand for artificial intelligence (AI) and cloud services, according to a report of Greenpeace in East Asia. The group urged technology giants to take stronger action to combat climate change.
The environmental group on Thursday released a report that tracked the renewable energy use of China’s top 25 cloud providers and data center operators, which together account for more than half of the country’s cloud market and more than 60 percent of the data center market.
Alibaba Group Holding, Tencent Holdings and Baidu took the top three spots in the ranking of 10 cloud providers for purchasing renewable energy, carbon reduction measures and targets and data transparency. GDS, Chindata and VNET Group topped the list of 15 data center operators in their renewable energy acquisitions.
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“Over the past two years, some major companies have reported significant advances in their renewable energy consumption,” said Lyu Xin, climate and energy campaigner at Greenpeace East Asia. “However, advancements have been uneven across the industry.”
Over the past two years, the procurement of renewable energy by major Chinese technology companies has increased significantly, according to Greenpeace. Last month, five of the 25 companies in the study – Alibaba, China Telecom, Chindata, GDS and Tencent – reported annual renewable energy ratios that exceeded 10%, compared with just one company, GDS, in the 2022 study.
The report also concluded that only eight of these 25 companies have committed to using 100% renewable energy by 2030, and only six have established carbon neutrality targets for their direct and indirect emissions from purchased energy, the so-called scope 1 and scope 2 emissions, by the end of the decade.
Greenpeace has urged all technology companies to achieve 100% renewable energy and carbon neutrality by 2030. Companies must also include scope 3 emissions – indirect emissions in their value chain – in their carbon neutrality targets, it said the environmental group.
It is crucial for technology companies to rapidly expand renewable energy consumption given the exponential development of generative AI, which could fuel a boom in data center construction and require enormous amounts of energy, according to Greenpeace.
By 2030, AI is predicted to drive a 160% increase in energy demand for data centers around the world compared to 2023, according to research from Goldman Sachs.
Data centers are expected to account for 3% of global electricity consumption by 2028 and 7% by 2035, or about 3,100 terawatt hours over a decade, according to the investment bank. Macquarie.
In China, which has the world’s largest 5G network and one of the world’s largest data center industries, carbon emissions from digital infrastructure are expected to increase by 152% to 310 million tons in 2035 compared to 2020. according to a published report. by Greenpeace in 2021.
The sector is expected to consume 782 billion kilowatt-hours of electricity by 2035, or about 5 to 7 percent of national energy consumption, compared with 2.7 percent in 2020, the group said.
With China approaching a 2030 deadline to peak nationwide carbon emissions, Beijing has set policies to decarbonize the energy-hungry digital infrastructure sector, including cloud services and data centers.
Ministry of Industry and Information Technology of China listed the sector as a key decarbonization target alongside traditional high-emissions industries in 2022. The ministry ordered data center operators and telecommunications providers to conserve water and electricity, locate facilities in areas with abundant renewable energy and develop low energy consumption facilities and equipment.
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