Asia Pacific Carbon Neutral Data Center Market Size & Outlook, 2026-2034

Asia Pacific Carbon Neutral Data Center Market Overview

The Asia Pacific carbon neutral data center market size is valued at USD 8.9 billion in 2025 and is estimated to reach USD 41.4 billion by 2034, growing at a CAGR of 18.2% during the forecast period. The strong expansion of the market is driven by the rapid adoption of renewable energy procurement models, advancements in energy-efficient cooling systems, and rising sustainability mandates across ICT-intensive industries. Increasing hyperscale cloud growth, combined with enterprise decarbonization commitments and supportive regional policies, is accelerating investments in carbon-neutral digital infrastructure, enabling operators to transition toward lower-emission data center ecosystems across Asia Pacific.

Key Market Trends & Insights

• Based on data center type, the Hyperscale Data Centers segment held the highest market share of 46.12% in 2025.
• Based on decarbonization technology, the Renewable Power Procurement segment accounted for the largest market share of 41.58% in 2025.
• By end-use industry, the Manufacturing segment is projected to grow at the fastest CAGR of 19.84% during the forecast period.

Source: Straits Research

Market Size and Forecast

• 2025 Market Size: USD 8.9 billion
• 2034 Projected Market Size: USD 41.4 billion
• CAGR (2026-2034): 18.2%

The carbon neutral data center market in the Asia Pacific includes hyperscale data centers, colocation environments, enterprise-operated facilities, edge computing sites, and other low-emission digital infrastructure facilities. These are designed to incorporate multiple decarbonization pathways, including large-scale renewable power procurement, on-site renewable energy generation systems, advanced BESS, and next-generation cooling technologies with the objective of significantly reducing operational carbon footprints.

Carbon-neutral data center operations power several end-use industries in the Asia Pacific region, including ICT, BFSI, government and public sector agencies, healthcare networks, manufacturing enterprises, retail ecosystems, and other digitally intensive sectors. The market allows enterprises and service providers to meet the sustainability mandates being placed at an unprecedented rate while powering high-performance, mission-critical digital workloads across the Asia Pacific by integrating clean-energy adoption with energy-efficient architectures.

Latest Market Trends

Decentralized Digital Infrastructure Transitioning to Sustainable, Grid-Integrated Models

Carbon-neutral development in data centers in the Asia Pacific is gradually making its way from isolated facility-level efficiency upgrades to networked, grid-aware sustainability ecosystems. Historically, operations were extensively supported by on-site diesel backup, extremely limited renewable sourcing, and highly fragmented sustainability reporting, which brought inconsistency in carbon accounting and energy optimization.

Today, a major shift for the region is underway toward grid-integrated renewable procurement, digital carbon tracking, and AI-driven energy orchestration. Operators throughout APAC are quickly adopting real-time emissions monitoring, virtual PPA participation, and smart load-shifting systems that align workloads with periods of lower grid carbon intensity. The output from this integrated model provides improved operational transparency, increased compliance with sustainability requirements, and faster paths toward net-zero targets.

Rapid Expansion of High-Density, AI-Ready Facilities Accelerating Clean Energy Adoption

The rapid growth in AI, machine learning, and GPU-intensive workloads across Asia Pacific is driving explosive demand for high-density data centers capable of supporting power requirements far beyond traditional IT loads. First-generation APAC facilities were designed for moderate density and limited cooling flexibility; however, a new wave of AI-oriented deployments is rewriting both infrastructure and sustainability strategies.

Operators are accelerating investments in renewable-backed power supply, next-generation cooling solutions, including liquid and immersion cooling, and large-scale battery energy storage systems to meet rising rack densities and escalating power draw. These next-generation technologies will strongly improve energy efficiency while reducing operational emissions and enabling seamless transitions into clean-energy ecosystems. In fact, this rapid scaling of AI infrastructure actually fuels the integration of clean energy directly, making high-density workloads one of the strongest catalysts for carbon-neutral adoption in the region.

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Market Drivers

National Net-Zero Mandates Accelerating Large-Scale Carbon-Neutral Data Center Development

Carbon-neutral digital infrastructure is proliferating across Asia Pacific, as authorities impose strict net-zero policies that directly reshape data center development requirements. Countries such as Singapore, Japan, South Korea, and Australia have aggressive national decarbonization strategies going into play, meaning the use of cleaner power is obligatory, there are penalties for reporting carbon intensity, and all given benefits accrue towards transforming ICT infrastructure to renewable-backed.

Singapore's Green Data Centre Roadmap lays out a controlled but strategic expansion of new capacity that must be powered by high-efficiency and low-carbon energy sources, enabling operators only if they meet strict energy and sustainability thresholds. Japan's GX Policy doles out multi-billion-dollar funds to accelerate renewable integration and energy-efficient digital investments, including data centers supporting national cloud and AI ecosystems. Similarly, the national RPS in South Korea compels major energy buyers, including hyperscale operators increase renewable consumption annually, creating a direct incentive for carbon-neutral procurement.

Market Restraints

Regulatory Moratoriums and Capacity Caps Slowing New Carbon-Neutral Deployments

Major restraints on growth for the Asia Pacific carbon neutral data center market are increased regulatory controls inhibiting new facility approvals, mainly driven by national concerns over land availability, grid stability, and environmental impact. A number of APAC governments have implemented moratoriums or capacity caps, or strict mechanisms for approvals that limit how quickly operators can expand, even if they employ carbon-neutral technologies.

Singapore enacted a multi-year ban on the construction of new data centers before allowing the addition of fresh capacity under an extremely selective scheme that assesses carbon efficiency, resource utilization, and sustainability criteria for applicants. Similar regulatory tightening is underway in Hong Kong and parts of India through more complex environmental clearance processes and permissions for grid interconnections, in a bid to rein in growing electricity demand and ecological pressures. These controls lead to longer approval timelines and decreasing rates at which new carbon-neutral capacity can come online.

Market Opportunities

Surging Demand for Green-Colocation Services from Rapidly Expanding Digital Enterprises

The rise of digital-first businesses across Asia Pacific creates a significant opportunity for carbon-neutral data center operators offering green-colocation services. This is especially true for companies in sectors like e-commerce, FinTech, online gaming, and logistics tech, among others, which are scaling up rapidly and now seek an infrastructure partner that will support growth aligned with their internal sustainability commitments.

Unlike in previous years, where capacity and uptime were the primary concerns for enterprises, today's digital businesses are actively gauging service providers on the basis of renewable energy usage, energy-efficiency scores, and verified carbon-neutral operations. This is more so in high-growth APAC enterprises that require scalable infrastructure but have limited resources to build their own sustainable facilities. In light of this, colocation providers offering certified carbon-neutral environments, transparent emissions reporting, and renewable-backed operational models are now seeing their demand accelerate from both mid-sized and large digital service providers.

Country-Wise Analysis

The strong impetus from energy-efficient digital infrastructure is driving China's growth in the carbon neutral data center market. Larger operators are increasingly committing to renewable-backed operations, bolstered by rapid clean-energy zone expansion and advanced cooling deployments in key provinces. Increased transparency in sustainability reporting further reinforces strict operational standards for industry participants. Therefore, China's structured regulatory oversight and focus on low-carbon digital development continue to improve investor confidence and expedite nationwide market expansion.

Japan Market Trends

Japan's carbon neutral data center market continues to witness growth on account of building safe and environmentally responsible digital infrastructure. Operators in the country are turning toward renewable-linked operations and integrating high-efficiency thermal management systems that minimize emissions. The increased adoption of disclosure practices and operational frameworks focused on reliability is instilling confidence among stakeholders. These aspects, therefore, backed by Japan's commitment to resilient low-carbon data ecosystems, keep strengthening the market traction further and attracting sustained investments across the region.

India Market Trends

India’s focus on scaling sustainable data infrastructure with a continued emphasis on operational safety and reliability drives India's market growth. Renewable-aligned energy sourcing and energy-efficient cooling innovations continue to be adopted among providers to support expanding cloud and enterprise demand. More transparent performance disclosures and stronger sustainability audits further improve trust in the industry. Better reporting practices combined with increased adoption of clean-digital operations for data centers accelerate India's transition to carbon neutrality and support robust market expansion.

South Korea Market Trends

The carbon neutral data center market of South Korea moves forward owing to the industry's commitment to quality, low-carbon operations. Local operators are adopting cleaner energy pathways and modern efficiency measures, ensuring consistent and sustainable digital service delivery. Improved visibility into operational performance and environmental metrics reinforces user and investor confidence. This has kept the growth momentum strong across the national market in South Korea, as it focuses on dependable, sustainability-aligned data center practices.

Rest of Asia Pacific Market Trends

The Rest of Asia Pacific region is seeing significant growth as markets focus on safe, reliable, and low-carbon digital infrastructure. More renewable-linked energy models and high-efficiency thermal systems are being integrated into the operations of operators across countries in Southeast Asia and the Pacific to support the increasing digital demand. Greater availability of data on sustainability and better governance of operations builds broader regional trust. These changes collectively push the wider APAC region toward faster adoption of carbon-neutral data centers and support continued market momentum.

Data Center Type Insights

Hyperscale Data Centers dominated the market in 2025 with 46.12% market share, driven by rapid growth across cloud platforms, AI workloads, and large digital enterprises in Asia Pacific that demand high-capacity, mission-critical computing environments. With the unabated demand for scalable, energy-efficient digital infrastructure, hyperscale operators are increasingly focusing on carbon-neutral designs with support for renewable procurement and advanced cooling, making them the preferred choice for sustainable ICT expansion in the region.

The segment of the edge data centers is expected to grow with the highest CAGR of around 21.34% during the forecast period, driven by increasing 5G penetrations, smart-city deployments, and latency-sensitive applications in industries such as retail, healthcare, and logistics. With a view to localized processing while meeting their environmental commitments, carbon-neutral edge facilities have therefore emerged as increasingly appealing for enterprises; hence, this has ensured high momentum in this segment across Asia Pacific.

Source: Straits Ressearch

Decarbonization Technology Insights

The Renewable Power Procurement segment dominated the market share with 41.58% in 2025 due to increasing adoption among operators in Asia Pacific of long-term PPAs and renewable energy certificates to meet their sustainability commitments with the assurance of stable energy availability.

The segment of Advanced Cooling Technologies will grow the fastest in the forecast period. The increase in rack densities, AI-driven workloads, and extreme climatic conditions within APAC drives changes toward liquid cooling, immersion systems, and hybrid thermal solutions.

End-Use Industry Insights

The manufacturing segment will see the highest CAGR of 19.84% during the forecast period, mainly because production ecosystems are rapidly digitalizing and because sensor-intensive and automation-driven operations are expanding across Asia Pacific. As a result of deploying smart factory technologies, robotics, and real-time analytics, manufacturers increasingly need highly reliable, sustainable data infrastructure to manage rising data volumes and energy-intensive applications.

Competitive Landscape

The APAC carbon neutral data center market is fragmented, with a mix of established hyperscale operators and advanced colocation players. A few of the leading companies hold a significant share through large-scale sustainable facilities, the integration of renewable energy, and strong regional expansion strategies.

Major market players include GDS Holdings, Digital Realty, and Alibaba Cloud, among others. All these players are competing aggressively to achieve a strong position in the market by developing carbon-neutral campuses, renewable-powered infrastructure, and focusing on strategic partnership opportunities and acquisitions. Their focus on sustainability-aligned growth thus enables them to capture the rising demand for low-emission digital infrastructure across the region.

Vena Nexus: An emerging market player

Vena Energy Nexus, a newly minted subsidiary of a well-known regional green energy group, is carving out a specialized niche in sustainable, AI-ready, and carbon-aware data center infrastructure across Asia Pacific.

• In May 2025, Vena Group announced the inauguration of Vena Nexus, consolidating all digital infrastructure and data center development under one focused platform, with a pipeline covering approximately 3 GW of data center developments, including over 1 GW of AI-DC capacity with secured power, land, and permits.

Thus, Vena Nexus has become one of the more interesting newcomers in the APAC carbon neutral data center market, leveraging its green energy heritage, integrated power-to-infrastructure value chain, and large-scale green-certified capacity to meet rising demand for sustainable and high-performance data infrastructure.

List of key players in Asia Pacific Carbon Neutral Data Center Market

1. GDS Holdings
2. Digital Realty
3. Alibaba Cloud
4. Tencent Cloud
5. NEC Corporation
6. Keppel DC REIT
7. AirTrunk
8. NEXTDC
9. Mapletree Industrial Trust
10. Bridge Data Centres
11. NTT Communications
12. Huawei Technologies
13. Chindata Group
14. Global Switch
15. Princeton Digital Group
16. AIMS Data Centre
17. ST Telemedia Global Data Centres
18. Equinix
19. Digital Edge
20. Supernap
21. Others

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Strategic Initiatives

• September 2025: Princeton Digital Group (PDG) announced renewable-power deals in both India and Indonesia to enable carbon-free energy consumption at its data centers. The agreement covers PDG’s 150 MW MU1 data-center campus in Mumbai
• June 2025: STT GDC disclosed achieving over 78% renewable energy usage across its group operations, signaling its commitment to carbon-neutral data center operations by 2030.