Allianz Trade study warns data centers will become major electricity and carbon emitters

A new study by Allianz Trade, led by senior climate economist Patrick Hoffmann, finds that data centers are shifting from a peripheral role to a structural driver of electricity demand worldwide. Global investment in the sector reached $580 billion in the past year and installed capacity is expected to double by the end of the decade. AI applications now account for 15‑20 % of data‑center power use and could rise to roughly 40 % by 2030.

Emissions vary sharply with the local electricity mix: more than 600 g CO₂ per kWh in India, Indonesia or Malaysia versus under 30 g in Norway and Sweden. Germany’s current mix yields 329 g CO₂/kWh, placing it in the middle globally but behind Scandinavian nations. The study estimates data‑center‑related emissions at 286 million tonnes of CO₂ in 2025—about 57 % higher than previous forecasts—with over 70 % stemming from electricity consumption and the remainder from hardware and infrastructure. AI itself contributes 43‑60 million tonnes of CO₂ annually. Water use is also set to surge, from 814 billion litres in 2025 to up to 1.8 trillion litres by 2030. Climate‑related costs are already around $68 billion per year and could climb to $154 billion by 2030 without further decarbonisation measures.