Hong Kong’s data centre boom: Powering innovation or jeopardising climate goals?

By Steven Chan

Hong Kong attempts to position itself as Asia’s innovation hub, and the numbers look impressive.

Server racks in data centres. Photo: Brett Sayles, via Pexels.

According to market data, the city hosts 47 data centres with a total IT load of 581 megawatts. Another 671 megawatts worth of facilities are already in planning or under construction.

Yet behind the gleaming servers and promised economic gains lies a sobering reality: our data centres are becoming one of the territory’s largest electricity consumers and carbon emitters, and current energy conservation policy is dangerously out of date.

Hong Kong’s data centres consumed 7,131 terajoules of electricity in 2023 – up by more than 75 per cent in just five years.

If we take the Environment and Ecology Bureau’s data as a reference, greenhouse gas emissions from data centres through electricity use rose by 35.6 per cent, from 680,164 tonnes of CO₂-equivalent in 2018 to 922,392 tonnes in 2023. That is equivalent to the annual emissions of roughly 200,000 Hong Kong residents.

The forthcoming Sandy Ridge data centre – a 220-megawatt facility on an 11.6-hectare site in the Northern Metropolis – makes the scale impossible to ignore.

Even assuming a conservative 70 per cent utilisation rate and a Power Usage Effectiveness (PUE) of 1.3, annual electricity demand will reach 1.75 billion kilowatt-hours. Not only is this more than the MTR’s 1.67 billion kilowatt-hours in 2024 and roughly 3.8 per cent of Hong Kong’s entire electricity consumption, but it will also eclipse Hong Kong’s current largest single electricity user.

Its electricity demand is so large that four I-Park waste-to-energy incinerators could barely power it. Its carbon footprint alone, using CLP’s 2024 grid factor of 0.38 kg CO₂-equivalent per kilowatt-hour, will be 666,520 tonnes – 2 per cent of the city’s total emissions in 2023.

Yet the policy framework governing this surge remains stuck in the past. The Energy Saving Plan 2015-2025+ has expired and never addressed data centres at all. The Green Data Centres Practice Guide, commissioned by the Digital Policy Office, is still in its 2020 version. It only discusses traditional air- and water-cooling, ignoring liquid-cooling technologies now standard elsewhere.

The Sandy Ridge Data Facility Cluster site in the Northern Metropolis. Photo: Screenshot, via YouTube.

Last year, the government amended the Buildings Energy Efficiency Ordinance (Cap. 610) to mandate energy audits and public disclosure for data centres every five years – a welcome step.

But when we asked the Digital Policy Office for the government’s own data centre performance data, the reply was a curt refusal, citing “security reasons.” If the government itself will not lead by example, why should the private sector?

Contrast this vacuum with international practice. In mainland China, all new data centres must achieve a PUE no higher than 1.25. Beijing ties renewable-energy quotas directly to PUE performance and publishes a national “Green Data Centre” honour roll.

Germany’s Energy Efficiency Act sets a PUE cap of 1.2 for new facilities from July 2026 and 1.3 for all facilities by 2030, plus mandatory waste-heat reuse. Ireland demands 80 per cent renewable energy for new centres. Singapore’s carbon tax is recycled into green-transition subsidies.

The European Union requires mandatory reporting of electricity, water and carbon data. Hong Kong, by comparison, is coasting.

This matters because Hong Kong’s energy decarbonisation strategy relies almost entirely on cleaning the grid – replacing coal with natural gas and importing nuclear and renewables.

Ireland offers a cautionary tale: even though its grid emissions intensity fell more than half over a decade, data centre electricity demand rose nearly fivefold, driving a near-doubling of sector emissions. 

Hong Kong risks the same trap. The Sandy Ridge, the Lok Ma Chau Loop and the San Tin projects will push demand sharply higher. Without demand-side controls, every tonne of grid decarbonisation will be cancelled out.

The Digital Policy Office. Photo: Screenshot, via YouTube.

The solutions are straightforward and proven. First, the government should immediately update the expired Energy Saving Plan and the Green Data Centres Guide with legally binding PUE targets and incentives for liquid cooling and waste-heat recovery. 

Second, the Digital Policy Office must publish its own data centre energy performance – or at least explain how “security” is being balanced against energy conservation and transparency. 

Third, Hong Kong should develop local green-finance standards referencing China’s national benchmarks and international best practice, unlocking concessional loans and green bonds for retrofits.

Fourth, power-demand management must sit alongside grid decarbonisation in every future energy plan.

Hong Kong wants to be the region’s technology leader. True leadership means showing the world that cutting-edge computing and genuine climate responsibility can coexist.

The data centre explosion is not a distant problem; it is already reshaping our carbon ledger and may jeopardise our commitment to carbon neutrality. 

The policy gaps are clear and require an immediate response, as Sandy Ridge will come into operation in 42 months. It is time for the government to move from aspiration to action — before one industry’s growth becomes everyone’s environmental burden.

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Steven Chan is the assistant environmental affairs manager at The Green Earth, a Hong Kong-based environmental charity.

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