Watchdog sends NSW emissions warning amid 'insatiable' data centre surge

New South Wales is facing a significant challenge in meeting its emissions reduction targets, with the state's independent climate watchdog warning that it is on course to miss its 2030 goals. The NSW Net Zero Commission's (NZC) annual progress report indicates that the state will fall between 10 and 20 million tonnes short of its target. This shortfall has widened from an estimated 7 million tonnes in the previous year.

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be cumulatively assessed against the legislated targets and required to implement mitigation measures

Two major factors are contributing to this widening gap: the proposed expansion of coal mines and the rapid growth of data centers. The planning system currently holds 20 applications for coal mine extensions, including a significant proposal for Hunter Valley Operations. Simultaneously, forecasts from the Australian Energy Market Operator (AEMO) predict that data centers will increase NSW's annual electricity demand by 8% by 2035, equivalent to 13% of current demand.

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the pace of decarbonisation must urgently increase

The NZC has called for a more rigorous approach to these developments, urging that projects be "cumulatively assessed against the legislated targets and required to implement mitigation measures." The commission stressed that the "pace of decarbonisation must urgently increase" for NSW to achieve its climate commitments. NZC chair Nick Rowley emphasized the critical role of accelerating the electricity sector's transition to replace coal-fired power and enable broader electrification across transport, buildings, and industry, noting the availability of numerous low-emissions technologies.

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Accelerating the transition of the electricity sector is critical, both to replace coal-fired power generation and to enable the wider electrification of transport, buildings and industry.

The report specifically highlights the growing electricity consumption and potential emissions from data centers. NSW Greens climate change spokesperson Sue Higginson criticized the current rollout of data centers, describing them as "energy and water insatiable beasts" that do not align with emissions reduction goals. The NZC proposed four guiding principles for planning approvals: funding new renewable energy generation, contributing to grid reliability, meeting world-leading efficiency standards with public reporting, and considering suitable regional locations for data centers.

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Many low-emissions technologies are available today and their uptake must be accelerated across the economy.