Saudi Data Center Sustainability Rules Explained

Saudi Arabia's new sustainability regulations for data centers aim to enhance energy efficiency, integrate renewable sources, and manage water usage effectively.

Saudi Arabia is transforming its data center industry with new sustainability rules introduced in January 2024 under the Data Centers Services Regulations (DCSR). These regulations are part of Vision 2030 and aim to make the Kingdom a leader in sustainable digital infrastructure. Here's what you need to know:

Why It Matters: Data centers consume vast amounts of energy and water. These rules enforce energy efficiency, renewable energy use, and water conservation to reduce environmental impact while boosting local economic growth.
Who Enforces It: The Communications, Space and Technology Commission (CST) oversees compliance, with penalties for non-compliance, including registration revocation.
Key Requirements:
- Energy Efficiency: Operators must meet Power Usage Effectiveness (PUE) standards and use advanced monitoring systems.
- Renewable Energy Integration: Facilities must adopt solar, wind, or other renewable solutions.
- Water and Waste Management: Closed-loop cooling systems and e-waste recycling are mandatory.

Saudi Arabia’s regions are tailoring their strategies - Riyadh focuses on solar energy, NEOM leads in net-zero designs, and Dammam blends renewable and traditional energy sources. With public cloud spending expected to grow at 23% annually and electricity costs as low as AED 0.29/kWh, now is the time for operators to act.

This is your guide to complying with Saudi Arabia’s sustainability standards while preparing for future growth in the region’s thriving tech sector.

Main Requirements You Must Meet

Saudi Arabia's data centre sustainability regulations focus on three key areas that operators must address to align with the kingdom's environmental goals for digital infrastructure.

Energy Efficiency Standards

The regulations require data centres to adopt energy management systems aimed at achieving specific Power Usage Effectiveness (PUE) levels, as outlined in the updated Data Centre Sustainability Regulations (DCSR). While exact PUE benchmarks for Saudi Arabia are yet to be released, global standards suggest stricter targets, typically ranging between 1.3 and 1.5 by 2025.

Data centre operators need to assemble cross-functional teams and provide adequate training for staff. Facilities must install advanced monitoring systems to track energy consumption in real time and identify ways to optimise efficiency. Additionally, Tier 2 and Tier 3 data centres are expected to maintain high uptime performance while demonstrating sound energy management strategies.

Renewable Energy Requirements

Beyond energy efficiency, the regulations stress the importance of integrating renewable energy sources. Data centres are expected to incorporate solar, wind, or other renewable energy solutions, aligning with Saudi Arabia's Vision 2030 initiative. A notable example is DataVolt's ambitious US$5 billion net-zero AI data centre campus in Neom, which aims for 1.5 GW capacity powered entirely by renewable energy, with completion planned by 2028.

To support this shift, operators can consider alternative funding mechanisms like green bonds and sustainability-linked loans (SLLs). These financing options connect borrowing conditions to environmental performance metrics, such as achieving lower PUE levels or increasing renewable energy use.

Water and Waste Management Rules

Given Saudi Arabia's water scarcity, the regulations include stringent measures for conservation, as outlined in the updated DCSR. The kingdom's average water consumption stands at 360 litres per person daily, with up to 40% lost during transmission. To address this, data centres must implement closed-loop cooling systems, monitor water usage efficiency, and use advanced leak detection technologies to minimise waste.

Saudi Arabia aims to reuse 100% of treated urban wastewater by 2025, requiring data centres to adopt recycling systems and advanced cooling technologies. Additionally, operators must establish robust e-waste recycling systems to manage the lifecycle of IT equipment effectively. However, facilities need to balance water and energy efficiency carefully, as aggressive water usage efficiency (WUE) targets could lead to the adoption of more energy-intensive cooling methods, such as air cooling, which may conflict with PUE goals.

These regulations lay the groundwork for the broader compliance measures detailed in the following section.

How to Meet Compliance Requirements

Meeting Saudi Arabia's sustainability standards for data centres involves a three-step process: assessment, upgrades, and monitoring. This approach ensures operators go beyond basic energy tracking to align with the Kingdom's specific environmental objectives.

Check Your Current Setup

Start by evaluating your existing infrastructure against key performance indicators like energy usage, Power Usage Effectiveness (PUE), carbon emissions, water efficiency, and cooling performance. This assessment sets a baseline for compliance.

With emissions reporting now mandatory, it's critical to install systems that can accurately capture and report these metrics. Considering that data centres consume nearly 2% of global energy, precise measurement systems are indispensable for both compliance and optimising operations.

To simplify this process, sustainability compliance reporting solutions can automate data collection across various systems. These tools provide real-time insights into energy usage, pinpoint inefficiencies, and highlight areas that need immediate attention.

Once you’ve established a baseline, focus on targeted upgrades to close any performance gaps.

Make Necessary Upgrades

After identifying inefficiencies, prioritise upgrades that address specific compliance requirements. Key areas to focus on include cooling systems, renewable energy integration, and AI-driven energy management.

Cooling system optimisation: Cooling is a major energy consumer in data centres. Fine-tuning cooling infrastructure, using containment strategies, and optimising equipment operations can significantly improve efficiency. Advanced technologies like liquid cooling systems, seawater circulation, and direct-to-chip liquid cooling are gaining traction.
Renewable energy integration: Transitioning to renewable energy requires careful planning and substantial investment. For example, DataVolt’s US$5 billion project in Neom demonstrates the scale of resources needed to establish a net-zero AI data centre powered entirely by renewable energy.
AI-powered energy management: Smart energy systems driven by artificial intelligence can revolutionise energy usage. These systems enable remote diagnostics, predictive maintenance, compliance tracking, and risk assessments. Johnson Controls Arabia’s OpenBlue platform is a case in point, offering AI-powered monitoring to support green data centres.

Additionally, adopting low-carbon materials and designing for future upgrades ensures long-term sustainability and compliance.

Once upgrades are in place, ongoing monitoring becomes essential to maintain compliance and optimise operations.

Track and Report Your Progress

Sustaining compliance requires continuous tracking and detailed reporting of sustainability metrics. Data Centre Infrastructure Management (DCIM) software can streamline this process by automating data collection, analysis, and reporting. These platforms also provide real-time monitoring and predictive maintenance to reduce energy waste.

Greenhouse gas reporting is particularly critical. Measuring and tracking Scope 1, 2, and 3 emissions is vital, as Scope 3 emissions often account for the majority of a company’s carbon footprint. For instance, Amazon reports that over 75% of its emissions are Scope 3, highlighting the importance of comprehensive tracking.

Deploy automated DCIM tools to monitor key metrics like PUE, Carbon Usage Effectiveness (CUE), and Water Usage Effectiveness (WUE). Standardising these metrics ensures effective reporting and supports ongoing compliance efforts.

Additionally, monitoring resource utilisation can help identify underused equipment, consolidate workloads, and plan for future growth. This ensures that compliance efforts not only meet regulatory requirements but also enhance operational efficiency. Comprehensive tracking should cover energy consumption, carbon emissions, water usage, and waste management - establishing the accountability framework that regulators demand.

How Different Regions Apply These Rules

Saudi Arabia is shaping its sustainability efforts by tailoring strategies to the unique strengths of its regions. These approaches align with the Kingdom’s Vision 2030 goals, leveraging local energy resources and geographical advantages. The Northern and Central, Western, and Eastern regions are each carving distinct paths toward compliance.

Northern and Central Regions

In the Northern and Central regions, the focus is on harnessing abundant solar energy and low land costs to drive large-scale, renewable-powered data centre projects. This area is becoming a hub for solar-driven hyperscale facilities.

For example, in September 2024, ICS Arabia partnered with Lumaotong Group and China Mobile International to start building the Desert Dragon Data Centers. These centres are expected to deliver a total capacity of 187 MW. Riyadh stands out as a key player, hosting data centres with a combined IT load of 273 MW - the highest concentration of computing power in the Kingdom. Operators in the region are also prioritising LEED certifications to meet strict sustainability standards.

In contrast, the Western region is pushing the envelope with innovative net-zero initiatives and advanced cooling systems.

Western Region Projects

The Western region, particularly NEOM, is taking bold steps toward sustainable data centre development. This area is pioneering net-zero designs by integrating advanced cooling technologies and renewable energy sources.

In February 2025, NEOM and DataVolt signed a massive US$5 billion deal to establish a 1.5 GW data centre campus in NEOM’s Oxagon industrial zone. The first 300 MW phase is scheduled to go live in 2028. Oxagon will provide land and infrastructure support, powered by NEOM’s renewable wind and solar resources.

"This agreement with NEOM and Oxagon underscores our unwavering commitment to support the Kingdom's vision of becoming a regional digital and AI hub. The Kingdom's strategic location, coupled with its abundant green energy resources, aligns perfectly with DataVolt's mission in providing state-of-the-art sustainable data centers."

Rajit Nanda, CEO of DataVolt

The Western region is all-in on renewable energy, incorporating solar, wind, and even green hydrogen. Its advanced cooling systems aim to cut energy consumption by up to 40% compared to traditional data centres. Currently, data centres in Jeddah operate with an IT load of 125 MW.

Eastern Region Mixed Energy Approaches

The Eastern region takes a different route, blending traditional energy sources with renewables to ensure compliance. Centred around Dammam, this area is experimenting with hybrid energy strategies, including solar, wind, and load-balancing techniques.

Projects in the Eastern region are focusing on smart energy management systems and predictive maintenance to optimise energy use across diverse power sources. The region’s commitment to green technology is evident in its growth projections. By 2033, Saudi Arabia’s green data centre market is expected to reach USD 3,879 million, growing at a CAGR of 18.9% from 2025 to 2033.

These regional strategies highlight Saudi Arabia’s dedication to building a sustainable, tech-forward future. Each area is playing to its strengths, ensuring the Kingdom moves closer to its Vision 2030 objectives.

Getting Ready for Future Requirements

Saudi Arabia's data centre industry is evolving at a rapid pace. As operators comply with existing standards, they must now shift their focus toward preparing for future demands. This forward-thinking approach is essential to align with the Kingdom's ambitious goals under Vision 2030, which include achieving net-zero greenhouse gas emissions by 2060 and reducing 278 million tonnes of CO₂ equivalent annually by 2030. These goals present both challenges and opportunities for the sector.

The urgency for proactive upgrades is underscored by investment targets exceeding US$15 billion, alongside the AI market's projected growth at a compound annual rate of 29% through 2030. To stay ahead, operators need to embrace renewable energy solutions, advanced cooling technologies, and robust compliance frameworks. Meeting the Kingdom's regulatory requirements, such as the Personal Data Protection Law, demands strong data governance systems, regular risk assessments, and effective incident response mechanisms as outlined by the National Cybersecurity Authority.

Financing strategies are also evolving to support sustainable growth. Green bonds and sustainability-linked loans are emerging as preferred funding options for data centre projects, aligning with Vision 2030's ESG principles while offering competitive financial solutions. Modular data centres are another key strategy, as they reduce upfront costs and allow for quick capacity expansion. Together, these financial and design approaches enable more sustainable and flexible data centre operations.

"With the leadership's commitment to innovation and investments in technology, a favourable regulatory climate and significant cost advantage, Saudi Arabia is poised to become a leading player on the global data centre stage and the transformative hub for the region's digital economy." - Jawad Shaikh, Partner at Roland Berger

Water management is another area requiring immediate attention. Companies like Microsoft and Google have already tested high-temperature data centres in Saudi Arabia, operating at 35°C to eliminate direct water use. Meanwhile, Infomaniak, a Swiss firm, has implemented absorption chillers to reclaim up to 40% of waste heat for cooling purposes. These innovative approaches highlight how the industry is tackling environmental challenges.

Engaging stakeholders early is key to ensuring project success. Transparent communication about resource usage and sustainability plans, coupled with investments in local infrastructure and partnerships with local suppliers, helps build trust within communities and facilitates smoother regulatory approvals.

With public cloud spending expected to grow at a 23% CAGR until 2029, data centre operators must act now to implement sustainability measures. Saudi Arabia's competitive electricity pricing - approximately $0.08 per kWh, 30–50% lower than the global average - further incentivises early adoption of these strategies. By taking these steps, operators can position themselves to capitalise on growth opportunities while meeting compliance and sustainability goals.

FAQs

What impact do Saudi Arabia's new sustainability regulations for data centres have on operational costs?

Saudi Arabia's updated regulations for data centres, focusing on sustainability, are expected to push operational costs higher. To comply with these stricter standards, operators might need to allocate resources toward energy-efficient technologies, integrate renewable energy solutions, and deploy advanced monitoring systems. These adjustments will likely come with notable initial expenses.

Beyond these upfront investments, operators should also prepare for ongoing costs tied to compliance. This could include regular reporting, system upgrades, and continuous monitoring to stay aligned with the new requirements. While the regulations aim to support environmental goals over the long term, the transition period may bring financial challenges for operators as they adapt to the updated framework.

What challenges do data centres in Saudi Arabia face when adopting renewable energy sources like solar and wind?

Data centres in Saudi Arabia face several hurdles when it comes to using renewable energy sources like solar and wind. One of the primary challenges is the unpredictable availability of these energy sources. Since solar and wind power aren't consistently available, they can create mismatches between energy supply and the round-the-clock demands of data centres. To overcome this, dependable energy storage systems or backup options are critical to maintain uninterrupted operations.

The region's extreme heat adds another layer of difficulty. Cooling systems in data centres already consume massive amounts of energy, and while solar power can help offset some of this demand, high temperatures can reduce the efficiency of solar panels. On top of that, the absence of a strong energy policy framework to support the transition to renewables makes the shift even more challenging.

That said, progress in energy storage systems and cutting-edge cooling technologies is opening up opportunities for more sustainable and efficient data centre operations in Saudi Arabia.

What are Saudi Arabia's new data centre sustainability regulations, and how do they compare to others in the GCC region?

Saudi Arabia's new Data Centre Services Regulations (DCSR), set to take effect in January 2024, place a strong emphasis on sustainability and energy efficiency. These regulations align closely with the Kingdom's Vision 2030, requiring data centres to incorporate renewable energy sources and follow international standards aimed at lowering carbon emissions. The goal is clear: to ensure that data centres operate responsibly while minimising their environmental footprint.

When compared to other GCC nations, Saudi Arabia's approach stands out for its detailed and forward-thinking framework. These regulations not only raise the bar for energy efficiency but also solidify the Kingdom's role as a leader in the region's data centre landscape. This leadership is expected to attract foreign investment and drive local economic growth. In fact, the market is projected to expand from AED 4.88 billion in 2024 to AED 14.3 billion by 2030, a testament to the Kingdom's dedication to building a sustainable and cutting-edge digital infrastructure.