Making the Data Centre Industry More Sustainable

I am delighted to launch the Green Building Index (GBI) Data Centre Tool Version 2.0 – an initiative that aligns with Malaysia’s aspirations for a sustainable, future-ready digital economy. 

Let me start by congratulating the GBI team, led by the Board and Accreditation Panel, for your dedication in crafting this performance-based, Malaysia-specific tool that will support responsible growth. 

Data centres are not new, having existed in Malaysia since the 1990s. However, data centres that service overseas cloud needs are a new phenomenon since 2021. Between 2021 and December 2024, investments in data centres, cloud computing, data hosting etc amounted to RM184.7 billion (USD$41.7 billion). 

In other words, the sector that was an infant industry in 2021 has now more than matured in 2025. As the sector matures, the growth has to be sustainable and responsible. 

Data centres are highly energy- and water-intensive. To put it into perspective, a single 300-megawatt data centre can consume the equivalent electricity of two towns the size of Muar, and up to 30 percent of their domestic water use. If we do not act wisely, this growth could undermine our environmental goals.

At Ministry of Investment, Trade and Industry (MITI), we are clear-eyed about this challenge. On Monday, MITI Minister Tengku Zafrul Aziz and Digital Minister Gobind Singh chaired the Data Centre Task Force (DCTF) and deliberated on how to regulate and guide the data centre sector to grow sustainably. 

The challenges facing the data centre sector include: 

• Phantom demand and speculative build which burdens the economy as a whole and the utility providers particularly; we need to ensure only genuine data centre operators are in the business. 
• The lack of local supply chain which causes significant import of capital goods, which should be coordinated to avoid causing any issues with the balance of payment. There should also be much quicker localisation of data centre equipment. 
• The insufficient provision of jobs for Malaysians by the data centre sector. We will work with the data centre operators to ensure that more jobs are created in the data centres for Malaysians and also across the sector as a whole. 
• A paradigm shift that we will have to push through is this recognition that while we are happy to see the investors investing in data centre infrastructure – the “hotel” part of the business – we would like to work with investors in the sector to invest in the whole value chain. The “whole-of-value chain investment” means each investment in a data centre will have to come with the articulation of how it will bring benefits to and investment in renewable energy, jobs, local supply chain, and ultimately the development of AI in Malaysia. 

But beyond regulation, we believe strongly in enabling, empowering, and encouraging industries to take proactive steps – and that is where initiatives like the GBI Data Centre Tool Version 2.0 come in.

This tool is a comprehensive, performance-based framework designed specifically for the Malaysian context. It addresses critical sustainability concerns in a sector known for high consumption. The tool focuses on Power Usage Effectiveness (PUE) to enhance energy efficiency; Water Usage Effectiveness (WUE) and drought contingency planning; carbon offset strategies and on-site renewable energy generation; embodied carbon and circularity in materials; and provisions for mobility and commuting, ensuring sustainable accessibility for workers and services. 

Over 330 million square feet of space in Malaysia have been certified under GBI standards. This speaks volumes about the trust, credibility, and relevance of GBI within our construction and development sectors. 

MITI will continue to support and promote tools and programs like these. Let us ensure that our data centre infrastructure is not only modern, but also resilient and responsible. 

Once again, congratulations to the Green Building Index Board, the technical committee, and all stakeholders involved in making this tool a reality. With that, it gives me great pleasure to officially launch the GBI Data Centre Tool Version 2.0. 

This is my speech delivered at the Launching Ceremony of GBI Data Centre Tool Version 2.0 held on 24 July 2025 at ARCHIDEX, Kuala Lumpur Convention Centre