INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT)

Digital growth in a decarbonising world

How can the ICT sector accelerate - not undermine - the clean energy transition?

The challenges

Operational energy demand is outpacing clean power supply
Embedded manufacturing emissions are opaque and hard to act on
Linear ‘take-make-waste’ models are driving emissions, waste and resource loss

The solutions

Coordinate digital infrastructure and energy planning to accelerate clean power
Build credible, system-wide measurement and disclosure for emissions
Scale circular business models for hardware and devices

Every day, we send messages, stream videos and enter queries into search engines and AI models. Multiply those actions across billions of users, each interacting with digital services hundreds of times a day, and the scale of ICT infrastructure becomes clear.

Digital services feel instantaneous and intangible – perceptions reinforced by terms like ‘real time,’ ‘wireless’ and ‘the cloud’. In practice, they rely on vast networks of data centres housing servers, built using semiconductors manufactured in highly carbon-intensive fabrication plants, and transmitted through telecommunications networks spanning continents.

It’s easy to overlook how quickly these systems took shape. At the turn of the millennium, only 416 million people, around 7% of the global population, were online.1 Today, over six billion people are connected: over 73% of the world.2 With more mobile subscriptions than there are humans on Earth, connectivity has become the default condition of modern life.

This scale gives ICT a distinctive role in the clean energy transition. Digital systems are indispensable to decarbonising the wider economy, from integrating renewable power and optimising industrial processes to enabling new low carbon services and social impact. Yet the sector's own footprint is expanding at a pace that challenges our existing energy systems and climate goals.

The infrastructure underpinning this growth is also unevenly distributed. Semiconductor manufacturing is specialised and highly concentrated, especially in East Asia, and data centre buildout has fast become a national security priority for major economies. Both are creating new strategic dependencies and reshaping supply chains and trade relations.

Where capital flows now and in the coming years will influence how power systems develop and who benefits from digital growth. ICT can accelerate clean energy deployment and broaden access to essential services; it can also entrench fossil fuel dependency and widen existing inequalities.

In numbers:

"Digital growth and clean energy don't have to be in tension. Making them mutually reinforcing is a defining opportunity of the next decade."

Aleyn Smith-Gillespie, Global Practice Area Head, ICT The Carbon Trust

THE CHALLENGES

1. Operational energy demand is outpacing clean power

'Few sectors have invested more in clean energy than ICT, yet few sectors are making it harder for the grid to decarbonise.'

Few sectors have invested more in clean energy than ICT, yet few sectors are making it harder for the grid to decarbonise. Record levels of renewable energy procurement sit alongside growing reliance on fossil fuels to power data centres. Across the sector, emissions are rising as a result.

ChatGPT has made history as the fastest-growing consumer app ever recorded. Each query consumes many times more electricity than a standard Google search, and the data centres powering it require enormous quantities of energy-intensive chips and continuous energy to operate. Data centre electricity consumption has tripled in the past decade and could double again by 2030 – equivalent to Japan’s entire electricity demand.3

Clean power and grid infrastructure simply aren’t being built fast enough to keep up with this demand surge. As a result, data centre growth is not only delaying the retirement of existing fossil fuel assets but driving new ones.

The US, which holds the world’s largest share of data centre capacity, is leading this trend. It has tripled its planned gas-fired capacity in 2025 to meet AI-driven demand, and postponed two thirds of the coal capacity scheduled to be retired this year.4,5 In areas surrounding data centres, wholesale electricity costs are rising, with some consumers reporting an 80% jump in energy bills.6 Compounding this, most legacy grids were designed around centralised fossil fuel generation and now struggle to integrate renewable supply at the pace required.

The same surge in technology and generative AI-driven demand is reverberating upstream through the supply chain. Semiconductor manufacturers, predominantly in East Asia where most of the world’s chips are made, are investing in new fossil fuel capacity to power fabrication plants and meet growing energy demands.7

Efficiency gains alone will not solve the problem. As technologies become more energy efficient, they tend to become cheaper and more accessible, which increases overall demand. To give an example, when mobile network operators launched 5G, each gigabyte of data became far more energy efficient to transfer – but data use ballooned as a result. Data-heavy activities, like video streaming on smartphones, have become commonplace, and the result is no overall drop in energy consumption.

This challenge of matching available clean supply to demand plays out differently across the world and extends beyond chips and data centres. Today, every sector of the economy relies on round-the-clock connectivity, and many telecom towers and data centres maintain back-up diesel generators in case of power outages. In countries where grids are less reliable, these diesel generators need to be deployed much more often, locking in fossil fuel assets and driving up emissions.

Global electricity consumption from data centres 2005-2035 (TWh)

Global electricity demand from data centres grew 54% between 2020 and 2024, driven largely by the US (up 70%).

2. Embedded manufacturing emissions are opaque and hard to act on

'The structure of the ICT value chain means most emissions are elusive to the companies who need to address them.'

For many ICT products, the bulk of emissions is locked in before we ever interact with them. Around 79% of a smartphone’s carbon footprint comes from manufacturing; semiconductor chips alone account for half of those emissions.8

Even for servers – where most lifecycle emissions are generated during use – chips can still comprise almost a third of the device’s total footprint.9 From smartphones to 5G antennae to the infrastructure powering AI centres, these chips are ubiquitous. And as demand for ever more powerful chips grows, so too do the emissions embedded in making them.

Where and how these chips are produced further compounds the challenge. Semiconductor manufacturing is highly concentrated in fossil fuel-dependent economies. Taiwan dominates global semiconductor fabrication – with TSMC, the world’s largest chip foundry, alone holding around 66% of the global market – yet 85% of the island’s electricity came from fossil fuels in 2024.10,11

Process emissions add another layer of complexity. Fluorinated gases, essential to chip production, are potent greenhouse gases. Abatement technologies exist, but they are expensive and most commonly deployed where regulatory pressure is highest – currently Europe and North America, not in the Asian facilities producing most of the world’s chips.

The structure of the ICT value chain means most of these emissions are elusive to the companies who need to address them. Chip makers sit high up the value chain, and while device manufacturers often have direct relationships with them, telcos are far removed.

To give an example, Vodafone offers Samsung devices to its customers; Samsung purchases chips designed by Qualcomm; Qualcomm arranges fabrication from TSMC. Each step dilutes both visibility and accountability. For Vodafone at the end of that chain, accurately measuring the emissions embedded in the products it sells is difficult – and without that data, building a credible plan to reduce them is harder still.

In many cases, manufacturing is the biggest contributor to a device's carbon footprint

Semiconductor hotspots

Production is highly specialised and geographically concentrated, with implications both for emissions and global supply chain security.

Most computers, smartphones and games consoles follow a similar path: we extract scarce raw materials to make them, use them and then throw them away. Every new device created means more emissions, more critical minerals lost, and more e-waste destined for landfill.

3. Linear 'take-make-waste' models are driving emissions, waste and resource loss

Most computers, smartphones and games consoles follow a similar path – we extract scarce raw materials to make them, use them and then throw them away. Every new device created means more emissions, more critical minerals lost, and more e-waste destined for landfill.

The scale of the problem is immense. If all the electronic waste produced globally each year were put into waste lorries, they could form a complete loop around the Earth’s equator.12 Toxic materials within the waste, including mercury and lead, are harming human health. This is felt most acutely in low- and middle-income countries, where largely informal and unregulated treatment and recycling of e-waste leaves workers and local communities exposed to hazardous substances.

At the same time, the valuable materials within this waste – like copper, lithium and gold – stay trapped inside. In 2022, an estimated $62 billion worth of recoverable materials were stranded as e-waste.13

Relying on virgin materials to produce electronic devices can also be risky for businesses. Take yttrium, a rare earth metal used in semiconductor manufacturing. Almost all of the world’s yttrium is produced in China; when China restricted exports of rare earths in 2025, global yttrium prices soared, and semiconductor manufacturers feared shortages and production delays.14

Circularity offers an alternative to this ‘take-make-waste’ model; extending the life of products through better design, recycled content, and reuse, repair and refurbishment. Assuming this avoids a new device being produced, this cuts out what is often the most carbon and resource-intensive part of a device’s lifecycle: the supply chain and manufacturing.

But the circular economy is not yet a reality. Resources and value continue to be wasted at every stage of the product’s lifecycle. Only 22% of the 62 million tonnes of e-waste produced in 2022 was formally collected and recycled – a figure projected to drop to 20% by 2030, and one that likely overstates genuine material recovery given inconsistent standards across markets.15

This is partly a technology problem. Semiconductor chips, for example, are very difficult to reuse and recycle. Other devices are simply not designed to last, or to be easily taken apart for economic repair or recycling.

But even when circular solutions do exist, systemic issues prevail. Consumers are incentivised to trade in fully functioning devices for newer, more fashionable models. Repair and refurbishment markets, especially for more complex products like servers, are not yet mature. New levels of coordination and reverse logistics are needed to collect and distribute products and components. And regulations are not yet effectively pricing in the environmental externalities of virgin materials, putting recycled materials at a cost disadvantage. Only 81 countries have e-waste regulations, and while most of these promote recycling, far fewer have policy frameworks mandating repairability or extended producer responsibility.16

In numbers:

3.5 years

The global average replacement cycle length for a smartphone Source: SellCell

62 million tonnes

Volume of e-waste generated in 2022, 1.2 times the weight of the Great Wall of China Source: E-Waste Monitor

> 5 billion

No of mobile phones estimated to be discarded worldwide every year – equivalent to 169 per second Source: WEEE Forum

E-waste generation is projected to rise around five times faster than documented recycling rates for electrical and electronic equipment

This is mostly due to the widening gap between recycling rates and e-waste generation growth worldwide.

Source: UNITAR

THE SOLUTIONS

The speed and scale of ICT growth create major opportunities for strategic interventions, both to decarbonise the sector and to accelerate the clean energy transition. Targeted actions can offer benefits that extend far beyond individual companies to the wider system, including the communities and customers ICT interacts with and serves.

1. Coordinate digital infrastructure and energy planning to accelerate clean power

Learn more

2. Build credible, system-wide measurement and disclosure for emissions

Learn more

3. Scale circular business models for hardware and devices

Learn more

1. Coordinate digital infrastructure and energy planning to accelerate clean power

'When stakeholders commit collectively, or where regulators connect clean energy requirements to licensing and planning, the calculus can shift.'

It sounds simple, but improved coordination is among the most powerful levers for ensuring that rapid ICT growth drives clean energy deployment. The real opportunity lies in the scale of capital being deployed. Bringing tech companies, utilities, governments and financiers together for effective long-term alignment on procurement, financing, siting and grid connection can enable major investments to plug clean power into the grid rather than fossil fuels.

This is already being demonstrated at scale: tech giants Meta, Amazon, Google and Microsoft together accounted for 49% of global corporate clean energy procurement in 2025, with Meta and Amazon alone buying enough clean energy to power Denmark.17 Effective collaboration is key to accelerating this investment by making clean power the most viable choice across markets, not just the preferred one. The following initiatives, adapted to contextual factors and requirements, can drive this:

Collaborative clean power offtake agreements. Coordination supports tech companies to commit to buying clean power over the long term, allowing renewable projects to become financeable while triggering grid upgrades and planning approvals that can benefit local communities and regions. The business case for companies is clear: when coordinated well with host governments and network operators, clean energy offers price stability, cost-competitiveness and alignment with future regulation and customer expectations.

Low Carbon Power Accelerators. For distributed network infrastructure operating off-grid or on less reliable grids, Low-Carbon Power Accelerators are needed to bring together mobile operators, tower companies, renewable developers and local financiers to tackle a shared challenge: infrastructure that mostly runs on diesel.

Powering off-grid base stations with clean energy can be made viable when stakeholders commit collectively, or where regulators connect clean energy requirements to licensing and planning. Mini-grids and battery-backed solar can become viable at scale and the same infrastructure can extend clean and reliable electricity to surrounding communities.

Net Zero data centre programmes. In fast-growing markets like Malaysia, data centre energy demand is set to more than double by 2030, making strategic coordination essential for clean planning.18 Net Zero Data Centre programmes would align hyperscalers, utilities, policymakers and renewable developers around a common plan to incentivise coordination of data centre development, renewable generation capacity and grid expansion. In this scenario, hyperscalers benefit from cost certainty; governments can plan investment; and regions benefit from clean infrastructure that serves communities alongside the data centres themselves.

Semiconductor value chain convening. Most semiconductors are produced in coal- and gas-heavy grids, with chip production emissions projected to reach 277 million metric tonnes of CO₂e by 2030.19 Foundries also generate significant process emissions, including highly potent fluorinated gases. Semiconductor Value Chain Convening is needed to bring together chip designers, manufacturers, utilities, downstream buyers and policymakers to build the renewable energy procurement strategies and measurement standards the sector currently lacks.

How clean energy coordination can unlock sustainable ICT infrastructure

"Consistent carbon accounting and targets are how decarbonisation becomes self-reinforcing across a value chain. The work is detailed and can be unglamorous, but the leverage it creates is crucial."

Bob Burgoyne, Associate Director The Carbon Trust

2. Build credible, system-wide measurement and disclosure for emissions

For many ICT companies, embedded manufacturing emissions represent major decarbonisation opportunities yet remain difficult to see or act on. Transition strategies that map these emissions across the value chain, set credible targets and translate findings into procurement requirements and supplier contracts are the practical means of driving step-change.

When companies across the value chain accurately measure and report their emissions, accountability spreads across it. Suppliers face increased scrutiny, investors gain the confidence to back credible climate transition plans, and consumers can make more informed choices. In practical terms, in a sector where the emissions profiles of digital services remain largely opaque, reliable and transparent communication of emissions data is the building block on which future progress can be built.

The business advantage for telcos, data centre operators, device and semiconductor manufacturers that take this seriously is strong and will continue to grow. Robust transition strategies — that include both targets and how they will be met — unlock better access to sustainable financing, improved valuations and getting ahead of tightening regulations (including the EU Corporate Sustainability Reporting Directive). Reducing energy use and dependence on volatile fuel prices generates long-term cost savings, while companies that plan for climate risks build resilience and avoid bearing future costs alone. Put simply, emissions measurement and climate transition planning render inevitable risks more manageable, thereby granting competitive advantage to those who act early.

The foundation for these strategies is comparable data. Harmonised reporting standards, developed with industry bodies such as GSMA for telecoms and SEMI for semiconductors, are essential for accelerating progress across the sector.

Product carbon footprinting and independently assured communication of claims and product labelling are the crucial next steps for giving this data credibility. Across ICT supply chains, businesses are increasingly requiring suppliers to provide accurate product carbon footprint and lifecycle assessment data for the components they purchase, creating commercial pressure that reaches up into semiconductor manufacturing and device production. Widespread adoption of these practices helps move disclosure from a voluntary differentiator to an accepted market norm, and, over time, towards a regulatory baseline that creates an even playing field.

Decarbonising ICT requires action across the entire value chain

Semiconductors underpin the digital economy. Each layer depends on the one below it, but accountability for manufacturing emissions rarely travels back up the chain. The further a company sits from manufacturing, the harder it is to see and act on those emissions.

In a sector where the emissions profile of a smartphone remains largely opaque, reliable and transparent emissions data is the building block on which future progress can be built.

3. Scale circular business models for hardware and devices

The carbon footprint of a device is largely determined in the manufacturing phase, long before anyone switches it on. This offers a practical set of solutions: keeping devices in use for longer and designing them to be repaired and reused are among the most powerful carbon reduction levers available to the ICT sector, with material recovery at end of life providing additional benefit.

The opportunities are significant and remain largely untapped. The global refurbished smartphone market was worth around $89 billion in 2025 and is projected to grow to $209 billion by 2033.20 Circular business models in electronics deliver an average 12% reduction in operating costs compared to linear alternatives.21 Extending the lifetime of a laptop through repair and refurbishment can cut emissions by 77%; for servers, the figure is 49%.22 These benefits sit alongside significantly reducing the environmental impacts of electronic waste on ecosystems and local communities.

Yet without credible ways to measure both the carbon and financial impacts of circularity, companies struggle to progress on three fronts: making the internal business case; demonstrating progress to investors; and coordinating with the stakeholders needed to enable circularity at scale.

Corporate-level business model innovation is essential. Transition strategies and circularity programmes need to quantify impact and value; design products for longevity (including software upgrades), repairability and recyclability; and shift from one-off sales to new value propositions such as leasing or product-as-a-service models with product take-back.

Making circular models the default rather than the exception also requires systemic intervention. These can include industry initiatives such as the Circular Electronics Partnership’s role in developing industry-wide measurement frameworks alongside regulatory interventions such as the ‘right to repair’ being codified in different jurisdictions.

The benefits of implementing these initiatives would flow across the value chain. For example, companies gain the proof they need to back circular claims; network operators cut costs through refurbished equipment; repair businesses gain the standards they need to scale; and consumers get the information they need to choose refurbished devices with confidence.