A new report from the Materials and Embodied Carbon Leaders Alliance (MECLA) explores the risks emerging from the rapid growth of data centres, particularly the rising volumes of embodied carbon being locked into their construction.
As demand for data and digital services accelerates, data centres are fast becoming one of the most material‑intensive components of Australia’s built environment. While many of these emissions are counted elsewhere in the national inventory – such as manufacturing and industrial processes – they are not managed through sector‑specific decarbonisation pathways.
MECLA’s report shines a light on this challenge and outlines practical steps to reduce embodied emissions in data centre delivery.
A systems view of embodied carbon in data centres
The Next Frontier: Reducing Embodied Carbon in Data Centre Development brings together research, industry insight and hands‑on experience from across the Australian data centre supply chain. The work was delivered through MECLA in collaboration with the Decarbonising the Building Industry (DBI) initiative at the University of Melbourne and draws on desktop research alongside workshops with more than 70 industry stakeholders.
The report recognises Scope 3 emissions as a material risk currently falling between policy, procurement and accountability frameworks. Embodied carbon is unevenly distributed across data centre builds. It is found in:
- Mechanical, electrical and plumbing (MEP) systems, which contribute up to 60% of upfront embodied carbon and over 90% of whole-of-life emissions,
- Structural systems, which account for ~34% of upfront carbon, and
- Short-lived IT hardware, which create rapidly scaling impacts.
Data centres must therefore adopt a distinct approach to embodied carbon – one that spans design, procurement, technology choices and long‑term asset management.
This includes addressing data gaps (e.g. limited environmental product declaration availability), aligning supply chain accountability, and responding to emerging disclosure requirements such as the Australian Sustainability Reporting Standards S2.
The authors recommend focusing on tackling embodied carbon across three core components of data centre construction:
- Mechanical, electrical and plumbing (MEP) systems, accounting for the majority of whole‑of‑life embodied emissions in data centres. Strategies include minimising overbuild and optimising temperature and humidity setpoints. Key challenges include limited product-level data and rapidly evolving technologies.
- Structure and substructure, including concrete, steel and layout decisions shaped by power density and resilience requirements. Opportunities include single-storey, on-grade designs and material substitution. Key constraints include land availability, structural demands, and construction timelines.
- Computational infrastructure, where rapid refresh cycles (3-5 years) and AI‑driven hardware intensification are reshaping emissions profiles. Key levers include extending hardware lifespans, improving server utilisation and increasing rack density. Key barriers include supply chain transparency, advanced cooling requirements and limited end-of-life recovery systems.
Research led by industry collaboration
The research was led by Climate KIC Australia’s Alexi Barnstone and Kathy Verheyen and included a series of industry workshops held in late 2025. These sessions brought together data centre operators, developers, designers, suppliers and policymakers to test assumptions, share emerging practice and identify priority areas for collective action.
The report was officially launched on 23 April 2026 through a MECLA Spotlight event hosted by DBI in Melbourne and online. An event recording and slides are now available for those who were unable to attend.
Risks of inaction
Stakeholders are increasingly scrutinising how assets are designed, specified and procured to reduce carbon impacts as investment in data centre infrastructure accelerates.
There is a growing risk – amid a surge in AI‑driven demand – that data centre decarbonisation could lag decarbonisation efforts. There are more than 250 operational data centres across Australia, with at least 175 additional facilities projected by 2030. As operational electricity emissions fall with grid decarbonisation, embodied carbon – locked into building structures and complex cooling equipment – is expected to account for an increasing share of climate impact.
If developers do not urgently integrate embodied carbon into their procurement strategies, the rapid speed of AI development risks locking in high carbon solutions for decades to come.
A strategic opportunity for Australia
With strong renewable energy resources, improving regulatory frameworks and increasing global demand, Australia is well positioned to lead in low-carbon data centre development. The report finds that embedding embodied carbon strategies alongside energy and water will help ensure future growth is sustainable and investible.
Embedding embodied carbon considerations in the early stage of project delivery (alongside energy and water) would allow developers to ensure that this growth is not only rapid, but aligned with national climate targets. By addressing this now, Australia can de‑risk Scope 3 accountability across the data centre supply chain, and usher in new opportunities for low-carbon materials, manufacturing and circular supply chains across the built environment.
What’s next for MECLA
Insights from the report and from participant input captured during the launch event will inform MECLA’s next phase of work, including potential future working groups and targeted follow‑on activities focused on embodied carbon in digital infrastructure.
Those interested in contributing to this work can learn more about MECLA membership and onboarding or explore MECLA’s upcoming events via the website.
Acknowledgements
This research was supported by the Decarbonising the Building Industry initiative at the University of Melbourne. MECLA thanks the many industry participants who contributed their time and expertise, with particular thanks to AWS and AirTrunk for their technical input during the development of the report.
For more information on MECLA, please contact MECLA Project Director Kathy Verheyen.
