With data center expansion surging, Malaysia's SPAN will mandate alternative water use to protect resources, impacting approvals and future investments.
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| Malaysia's water regulator SPAN is set to enforce strict guidelines requiring data centers to use alternative water sources, aiming for zero reliance on potable water within three years. Image: ChicHue |
Kuala Lumpur, Malaysia — February 11, 2025:
Malaysia’s National Water Services Commission (SPAN) is set to introduce stringent guidelines requiring data centers to rely on alternative water sources instead of potable drinking water. The move comes as the number of data centers in the country continues to grow, increasing the strain on water resources.
SPAN Chairman Charles Santiago announced that the guidelines, expected to be implemented by mid-2025, will be mandatory for local water providers as part of the approval process for data center operations in Peninsular Malaysia. “We don’t want a situation where data center operators have water and regular Malaysians don’t,” he said at a press conference on February 10.
The new rules aim to reduce reliance on potable water by mandating the use of reclaimed water, rainwater, recycled water, and distilled seawater. Additionally, data centers will be encouraged to adopt advanced cooling technologies to minimize water consumption. The ultimate goal is to achieve zero reliance on potable water within three years.
Malaysia has seen a surge in data center applications, with 101 proposals submitted in 2024 alone. Approved projects so far account for a daily water demand of 142 million liters, significantly lower than the 808 million liters requested.
Johor has emerged as a key data center hub, partly due to Singapore’s temporary moratorium on new facilities between 2019 and 2022. The state’s data center capacity has grown exponentially, from 10 megawatts (MW) in early 2021 to 1.3 gigawatts (GW) today, with projections to reach 2.7GW by 2027.
Industry experts warn that investment in Malaysia’s data center sector may slow if infrastructure for alternative water sources does not keep pace. “Most data centers are open to using alternative water, but the government must support infrastructure development,” said Gary Goh, CEO of data center advisory firm Sprint DC Consulting.
Johor has already begun vetting applications more rigorously, rejecting nearly 30% of proposals in 2024 to ensure sustainable resource management. The state is working with hyperscale data centers (HDCs) to transition to alternative water sources, such as reclaimed sewage water and treated river water.
Despite the new regulations, some companies are unfazed. Australian data center operator Airtrunk, for instance, has already integrated sustainable water solutions into its 150MW facility in Johor Bahru.
As Malaysia positions itself as a leading data center hub, these regulations aim to balance industry growth with responsible water management, ensuring long-term sustainability for both businesses and local communities.