Can Malaysia’s water rules guide more sustainable data center growth in Southeast Asia – Reccessary

Report on Sustainable Water Management in Southeast Asia’s Data Center Sector

Introduction: Aligning Digital Growth with Sustainable Development Goal 6

The rapid expansion of the Asia-Pacific data center market, led by Southeast Asia, presents a significant challenge to regional water security and the achievement of Sustainable Development Goal 6 (SDG 6: Clean Water and Sanitation). While data centers are known for high energy consumption, their substantial water requirements for cooling systems place immense pressure on local water resources, particularly in hot and humid climates. This report examines the strategies being implemented, with a focus on Malaysia, to ensure that the growth of digital infrastructure is managed sustainably, aligning with integrated water resource management principles (Target 6.5) and substantially increasing water-use efficiency (Target 6.4).

Malaysia’s Strategic Framework for Water-Secure Industrialization

Advancing SDG 6 and SDG 9 Through National Policy and Infrastructure

As a primary hub for new data center construction, Malaysia is proactively addressing the water-energy nexus through a combination of policy, infrastructure investment, and industry regulation. These efforts are critical for building resilient infrastructure and promoting sustainable industrialization, directly supporting SDG 9.

• National Water Blueprint (AIR 2040): This long-term strategy aims to establish Malaysia as a regional water hub, providing a guiding framework for sustainable water management amid rapid industrial expansion.
• Regulatory Controls in Johor: The Johor government has ceased approvals for Tier 1 and Tier 2 data centers, which have high water consumption rates, to safeguard local water supplies for residential and industrial needs.
• Investment in Resilient Infrastructure (SDG 9): A USD 1.21 billion plan is underway in Johor to construct new reservoirs and water treatment plants, a foundational investment to enhance water self-sufficiency and support both communities and industries.

Fostering Multi-Stakeholder Partnerships for a Circular Water Economy (SDG 17)

In line with SDG 17 (Partnerships for the Goals), Malaysia is pioneering collaborative models to create an integrated reclaimed-water supply chain. These partnerships are essential for converting treated wastewater into a viable resource for industrial cooling, thereby reducing the strain on potable water sources.

1. Integrated Reclaimed-Water Initiative: A landmark agreement between Air Selangor, Amazon Web Services (AWS), Indah Water Konsortium (IWK), and Central Water Reclamation (CWR) will establish the nation’s first integrated system to supply reclaimed water to data centers.
2. Large-Scale Recycled Water Scheme: Data center operator AirTrunk has partnered with state-owned utility Johor Special Water (JSW) to develop what will be the country’s largest recycled water project specifically for data center cooling, treating wastewater for non-potable industrial use.

Evolving Regional Standards for Responsible Consumption (SDG 12)

Establishing Water Use Efficiency (WUE) as a Core Sustainability Metric

Across the region, regulators are adopting a more holistic approach to resource management that aligns with SDG 12 (Responsible Consumption and Production). This involves moving beyond Power Use Efficiency (PUE) to include Water Use Efficiency (WUE) as a mandatory performance benchmark.

• Singapore’s Regulatory Leadership: The Data Center Call for Application (DC-CFA2) mandates a WUE of 2.0 m³/MWh or lower and requires real-time monitoring, setting a regional precedent for water stewardship.
• Balancing the Water-Energy Nexus: A key challenge is managing the trade-off between PUE and WUE. A systems-thinking approach is necessary to avoid policies that inadvertently increase energy consumption and associated carbon emissions, which would undermine efforts related to SDG 13 (Climate Action).
• Aspirational Goals: The industry is moving towards concepts of water neutrality and water positivity, where operators aim to replenish the water they consume, representing a significant step towards sustainable production patterns (Target 12.2).

Technological Innovation for Water Resilience (SDG 9)

Driving Efficiency Through Advanced Treatment and Cooling Systems

Technological innovation is fundamental to achieving sustainable water use in the data center sector, contributing to the goal of upgrading infrastructure and industries for sustainability (Target 9.4).

• Advanced Wastewater Treatment: Technologies like Membrane Bioreactors (MBRs) and electrocoagulation (utilized by startup Hydroleap) enhance the quality of treated effluent, making it suitable for reuse in industrial processes and supporting Target 6.3 on improving water quality and increasing recycling.
• Alternative Cooling Solutions:
  • Liquid Cooling: An estimated 20% of data centers have adopted liquid cooling systems, which use non-water coolants to absorb heat efficiently, reducing reliance on traditional water-based methods.
  • Energy Recapture: In Thailand, a partnership between PTT and STT GDC is exploring the use of cold energy from LNG regasification to generate chilled water, creating a synergistic model for industrial resource efficiency.

Conclusion: An Integrated Roadmap for Sustainable Digital Growth

The long-term sustainability of Southeast Asia’s data center boom depends on a cohesive strategy that integrates robust governance, circular infrastructure, and technological innovation. To ensure that digital expansion supports, rather than undermines, the Sustainable Development Goals, a multi-faceted approach is required.

1. Strengthen Water Governance: Implement and enforce clear policies and metrics, such as WUE, that align industrial water use with national water security goals (SDG 6).
2. Invest in Reclaimed Water Infrastructure: Prioritize the development of large-scale recycled water systems to create a circular economy for water, reducing competition for freshwater resources (SDG 9, SDG 11).
3. Promote Technological Adoption: Encourage the deployment of innovative cooling and water treatment technologies that improve resource efficiency and minimize environmental impact (SDG 9, SDG 12).
4. Cultivate Public-Private Partnerships: Foster collaboration between governments, utilities, and industry operators to co-develop and scale sustainable solutions (SDG 17).

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses issues related to water management, industrial growth, infrastructure development, and technological innovation in the context of the data center industry in Southeast Asia. Based on this, the following Sustainable Development Goals (SDGs) are addressed:

• SDG 6: Clean Water and Sanitation: This is the most prominent SDG, as the article’s central theme is the immense water consumption of data centers, the strain on local water resources, and the strategies being implemented to ensure sustainable water management, such as wastewater treatment and the use of reclaimed water.
• SDG 9: Industry, Innovation and Infrastructure: The article focuses on the rapid expansion of the data center industry and the critical need to build resilient and sustainable infrastructure (reservoirs, water treatment plants, reclaimed-water supply chains) to support this growth. It also highlights technological innovations in water cooling and treatment.
• SDG 12: Responsible Consumption and Production: The discussion revolves around ensuring sustainable consumption patterns for water resources. It addresses the need for resource efficiency through metrics like Water Use Efficiency (WUE) and concepts like “water neutrality” and “water positivity,” promoting a shift towards more sustainable industrial practices.
• SDG 17: Partnerships for the Goals: The article explicitly mentions several multi-stakeholder partnerships between government bodies, state-owned utilities, and private corporations to achieve sustainable water management goals. These collaborations are essential for implementing the large-scale infrastructure and policy changes discussed.

2. What specific targets under those SDGs can be identified based on the article’s content?

Several specific SDG targets can be identified from the actions and policies described in the article:

1. Under SDG 6 (Clean Water and Sanitation):
   • Target 6.3: By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally.
     • Explanation: The article details Malaysia’s initiative to “convert treated effluent into reclaimed water” for data center cooling. This directly addresses the goal of increasing water recycling and reuse. The development of advanced wastewater treatment facilities using technologies like membrane bioreactors (MBRs) and electrocoagulation further supports this target.
   • Target 6.4: By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity.
     • Explanation: The article highlights the debate over regulating Water Use Efficiency (WUE) and mentions Singapore’s mandate for data centers to achieve a “WUE of 2.0 m³/MWh or lower.” This focus on efficiency metrics and the goal of reducing reliance on potable water sources directly align with this target.
   • Target 6.5: By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate.
     • Explanation: Malaysia’s “AIR 2040, its 20-year national water blueprint,” is a clear example of an integrated water resources management plan. It aims to balance the needs of rapid industrial expansion with long-term water security for the nation.
2. Under SDG 9 (Industry, Innovation and Infrastructure):
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.
     • Explanation: The article describes Johor’s “USD 1.21 billion (RM 5 billion) plan to construct three reservoirs and three water treatment plants” to ensure a self-sufficient and resilient water supply for both industrial and residential needs.
   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
     • Explanation: The article discusses the adoption of innovative technologies like “liquid cooling,” “membrane bioreactors (MBRs),” and “electrocoagulation” to make data center operations more sustainable. The shift from using potable water to reclaimed water for cooling is a prime example of retrofitting an industrial process for sustainability.
3. Under SDG 12 (Responsible Consumption and Production):
   • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
     • Explanation: The entire article is framed around managing the natural resource of water more efficiently. The push for data center operators to achieve “water neutrality” (using no more water than they replenish) or “water positivity” (returning more water than they withdraw) directly embodies the principle of sustainable resource management.
4. Under SDG 17 (Partnerships for the Goals):
   • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.
     • Explanation: The article provides concrete examples of such partnerships, including the agreement between “Air Selangor, AWS, national sewerage operator Indah Water Konsortium (IWK), and Central Water Reclamation (CWR)” to create a reclaimed-water supply chain, and the partnership between operator “AirTrunk” and state-owned utility “Johor Special Water (JSW).”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions or implies several specific indicators that can be used to measure progress:

• For Target 6.3 (Wastewater Treatment and Reuse):
  • Indicator: The volume and proportion of industrial water demand met by reclaimed water. The article describes the creation of Malaysia’s “first integrated reclaimed-water supply chain for data centers” and the country’s “largest recycled-water scheme for data centers,” providing a clear measure of progress in water reuse.
• For Target 6.4 (Water-Use Efficiency):
  • Indicator: Water Use Efficiency (WUE) metric, measured in cubic meters per megawatt-hour (m³/MWh). The article explicitly states that Singapore’s regulations mandate “a WUE of 2.0 m³/MWh or lower,” providing a quantifiable benchmark for data center performance.
• For Target 9.1 (Infrastructure Development):
  • Indicator: Investment in water infrastructure and the number of new facilities built. The article quantifies this with the “USD 1.21 billion (RM 5 billion) plan to construct three reservoirs and three water treatment plants” in Johor.
• For Target 9.4 (Adoption of Clean Technologies):
  • Indicator: The rate of adoption of specific sustainable technologies. The article provides a statistic that “an estimated one in five data centers has already adopted liquid cooling,” which serves as a direct indicator of technology uptake.
• For Target 12.2 (Sustainable Resource Management):
  • Indicator: Reduction in potable water consumption by industry. The Johor government’s decision to “stop approving Tier 1 and Tier 2 data centers” that “consume up to 50 million liters of water per day” is a policy action whose impact can be measured by tracking water consumption data from new facilities.
• For Target 17.17 (Partnerships):
  • Indicator: The number and scope of public-private partnerships established. The article identifies specific agreements, such as the “three agreements” signed by Air Selangor, AWS, IWK, and CWR, which can be counted and evaluated as indicators of successful collaboration.

4. Table of SDGs, Targets, and Indicators

Source: reccessary.com