Published Year: 2022
Data Center Cooling Market - A Global and Regional Analysis: Focus on Application, Product, and Coun
The global data center cooling market accounted for $17.82 billion in 2021 and is expected to...
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Industry & Technology Overview
Global Carbon Neutral Data Center Market Industry Overview
The global carbon neutral data center market was valued at $5.02 billion in 2021 and is projected to reach $16.53 billion in 2027, growing at a CAGR of 22.19% during the forecast period 2022-2027. The growth in the global carbon neutral data center market is expected to be driven by increasing government regulations on carbon emissions, emphasis on renewable energy, energy-efficient alternatives for data center cooling, electricity tariffs globally, efforts in sustainable developments, and CSR activities.
Market Lifecycle Stage
The carbon neutral data center market is still in a growing phase. The growth is attributed to the various environmental-friendly policies and government regulations. Increased research and development activities are underway to develop carbon neutral data center technologies and products, which are expected to increase due to the increased demand for data storage and digital transformation.
Impact
• With an increased worldwide focus on achieving climate-neutral goals and managing the demand for data storage, the shift from non-renewable energy sources to renewable energy sources in the data center industry brings significant opportunities.
• The shift is more prominent in regions such as Europe and North America. This is because countries in these regions which have natural colder climates almost throughout the year have the highest potential in the market.
Impact of COVID-19
Since 2019, the data center industry has witnessed a growth in the carbon neutrality of data centers. Even though other sectors have been adversely affected by the COVID-19 pandemic, data center operators have seen demand for data storage double and redouble, driven by increasing digitalization, cloud, AI, and 5G adoption, and the pandemic itself. The growth in remote work, video conferencing, and internet traffic alone caused by the pandemic have been the major factors for the boost of data center capacity, which increases the accelerating transition of regions such as Asia-Pacific and Middle-East and Africa toward fully digital economies.
In contrast, data center operators find themselves reshaping data centers more extensively and faster than ever before. Corporations and big technology companies are increasingly pledging to become carbon neutral, with companies across all sectors making bold carbon reduction commitments, such as the Climate Neutral Data Centre Pact announced in 2020.
Market Segmentation:
Segmentation 1: by Industry
• IT and Telecom
• Banking, Financial Services, and Insurance (BFSI)
• Government or Public Sector
• Healthcare
• Manufacturing
• Retail
• Others
The global carbon neutral data center market in the application segment is expected to be dominated by the IT and telecom industry. This is because the telecom industry is the largest consumer of data centers. Data centers are a crucial part of the ICT industry, as data transmission and data delivery operations require better connectivity.
Segmentation 2: by Data Center Type
• Hyperscale Data Centers
• Enterprise Data Centers
• Colocation Data Centers
• Others
The global carbon neutral data center market (by product, by data center type) is expected to be dominated by hyperscale data centers. This is because most of the leading hyperscale and cloud service providers have committed to going carbon neutral. These companies include Google LLC, Facebook, Microsoft, and Amazon AWS.
Segmentation 3: by Carbon Neutral Solutions
• Hardware
• Software and Platforms
• Support Services
The hardware segment dominates the global carbon neutral data center market based on solutions. This is because the data centers require specialized hardware that includes servers, racks, cooling systems, and others, and these devices are crucial for data center deployment and thus have the highest capital expenditure in a data center infrastructure.
Segmentation 4: by Region
• North America - U.S., Canada, and Mexico
• Europe - Germany, France, Netherlands, Sweden, Norway, Denmark, Finland, Iceland, Switzerland, and Rest-of-Europe
• U.K.
• China
• Asia-Pacific- Japan, Singapore, South Korea, and Rest-of-Asia-Pacific
• Rest-of-the-World - Middle East and Africa, and South America
Europe generated the highest revenue of $3.09 billion in 2021, which is attributed to the R&D advancements and supporting government regulations in the region. Europe is an attractive region for the carbon neutral data center market because of the availability of a favorable climate for the use of renewable sources of energy.
Recent Developments in Global Carbon Neutral Data Center Market
• In March 2022, Normative, a Swedish start-up sponsored by Google, released a free version of its carbon emissions tracker as businesses around the world struggled to figure out ways of managing their carbon impacts.
• In March 2022, Amazon Web Services (AWS) allowed customers to access a tool that measures the carbon footprint of cloud usage and compares it to the expected footprint of a data center located on-site.
• In May 2022, Alibaba Cloud, the foundation of Alibaba Group's digital technology and innovation efforts, announced the opening of its third sustainable data center in Germany to meet the growing demand for digital transformation from clients across Europe.
• In May 2022, nZero, a carbon management platform, and Corscale, the Patrinely Group's data center platform, partnered to provide customers with a sustainability solution that enables 24x7 carbon accounting and emission tracking.
Demand – Drivers and Limitations
Following are the demand drivers for the carbon neutral data center market:
• Government Regulations on Carbon Emissions and Rising Emphasis on Renewable Energy
• Growing Energy-Efficient Alternatives for Data Center Cooling
• Sustainable Development Efforts and CSR Activities
• Rising Electricity Tariffs Globally
The market is expected to face some limitations too due to the following challenges:
• High Dependence on Non-Renewable Energy for Running Data Center Operations
• Higher Costs of Implementation and Compatibility Issues
Analyst Thoughts
According to Rakhi Tanwar, Principal Analyst, BIS Research, “Carbon neutral data center is expected to be a great replacement of the conventional power sources and techniques used for operating data centers. Through the adoption of renewable sources of energy, the global climate neutral goals can be achieved, and carbon emissions can be mitigated along with an increase in storage capacity”.
Carbon Neutral Data Center Market - A Global and Regional Analysis
Focus on Product, Application and Country Analysis - Analysis and Forecast, 2022-2027
Some Faq's
Frequently Asked Questions
A carbon neutral data center is a location where data is stored, managed, and disseminated and where the mechanical, lighting, electrical, and computer systems are planned to be as energy efficient as possible while minimizing their negative effects on the environment, which releases negligible to zero carbon emissions. These data centers use energy from renewable sources.
The key trends in the carbon neutral data center market include efficient cooling systems, renewable sources of energy, Industry 4.0, and digital transformation, which has increased the amount of data being produced due to the data-intensive nature of the applications and has significantly impacted the market.
The global carbon neutral data center market has seen major development by key players operating in the market, such as business expansion, partnership, collaboration, and joint venture. According to BIS Research analysis, the majority of the companies preferred partnerships and collaborations as a strategy to further increase their growth in the global carbon neutral data center market. Companies such as Google, Microsoft, and Amazon.com, Inc. have majorly adopted partnerships, collaborations, and joint venture strategies.
A new entrant can focus on the IT, telecom, and hyper-scale data centers due to the higher market worth in the analysis and forecast period 2022 to 2027.
• In-depth analysis of 100 data center providers
• Region-based government programs and initiatives, along with a detailed scenario of six significant key associations and consortiums
• Region and country-level market estimations based on application and product segments
• Detailed analysis of 38 major investments in carbon neutral data center market
• Extensive competitive benchmarking of the top 30 data center players
The companies that manufacture carbon neutral data center equipment and systems, as well as renewable energy generating firms, data storage companies, research institutions, and regulatory bodies, should buy this report.
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