A corporate climate watchdog abandoned a proposed rule that would have tightened clean energy requirements for data centers, following intense lobbying from major tech companies. The rule would have restricted how data centers use natural gas backup power, but industry pressure led to its removal.

The Lobbying Campaign

Tech giants including Amazon, Google and Microsoft pushed back against the proposal from the Science Based Targets initiative, or SBTi. The rule would have limited the use of clean energy certificates tied to fossil fuel generation. Companies argued the restrictions would slow data center expansion and increase costs.

The SBTi, which sets emissions reduction standards for corporations, initially considered the rule as part of broader efforts to ensure corporate climate pledges are credible. Data centers consume massive amounts of electricity, often relying on natural gas for backup power during grid strain.

Why This Matters

Data center energy use is skyrocketing as demand for AI and cloud computing surges. If companies can use clean energy certificates to offset gas-powered operations, their emissions reductions may be exaggerated. This affects climate goals for everyone, because large tech firms are among the biggest corporate energy buyers. Weak rules allow them to claim progress without genuine cuts in fossil fuel use.

The decision by SBTi also raises questions about the integrity of voluntary climate targets. Without strong oversight, companies may continue to rely on cheap gas while marketing themselves as green.

What Comes Next

Environmental groups criticized the SBTi for caving to corporate interests. Some called for mandatory regulations instead of voluntary standards. The tech industry maintains that natural gas backup is needed for grid reliability and that clean energy credits are a valid tool.

The fight is far from over. Regulators in the U.S. and Europe are increasingly scrutinizing data center energy use. California and other states have proposed stricter reporting requirements. Tech companies may face binding rules if voluntary efforts fail to deliver real emissions cuts.