China's cloud push is coming at a big environmental cost — and it's affecting Microsoft and others too

A new study has highlighted the slow progress of China’s major cloud computing and data center companies in adopting renewable energy.

The Greenpeace report reveals VNEP Group, the operator of Microsoft 365 in China, uses just 4.35% renewable energy.

The news comes days after it was revealed China wants to increase its compute power by 30% before 2025 in order to meet the demands of artificial intelligence and power-hungry data centers.

China’s dirty data centers

The ‘Clean Cloud 2024’ report assessed 10 cloud providers and 15 data center operators in China, who collectively held more than half (52%) of the IaaS market in the first half of 2023.

Alarmingly, only eight companies – Tencent, ByteDance, Kuaishou Technology, GDS, VNET Group, Chindata Group, Shanghai AtHub and Bohao Internet Data Services – have committed to fully transitioning to renewable energy by 2030, a milestone year quoted by major companies worldwide as a key date for keeping emissions under control and reducing the impacts of global warming.

Some companies are already making promising progress, with Alibaba Cloud purchasing 1.6 billion kWh of renewable energy in 2023 and Tencent contracted to buy 1.3 billion kWh in 2024, however they are not a reflection of the entire industry.

The study found that Baidu’s renewable energy usage stands at 5.11% and VNET Group’s at 4.35%, which is alarming considering the country’s rapid expansion in computing capacity.

Ranking the cloud providers with a score out of 100 across transparency, carbon reduction measures and targets, renewable energy procurement and targets, and government and industry influence, the organization only awarded two companies scores around the 90 mark – Alibaba Group and Tencent.

Baidu, ByteDance and Huawei were the only others to get scores of more than 50, with UCloud in last place with a score of 15.

In the report, Greenpeace calls for increased transparency in reporting renewable energy usage for greater accountability, as well as stronger efforts to meet the national policy requirements. Greenpeace is also urging companies to target 100% renewable energy across Scopes 1, 2 and 3 by the end of the decade.