The Heat is on (and How to Reclaim It): Industrial Symbiosis for Data Centers

By Seamas PORTER

---

This essay was recognized as a runner-up in the 2025 Spring Semester Chair’s Essay Competition. The competition, coordinated in partnership with the European Investment Bank, focused on the topic: “Competitiveness in a low-carbon economy: the role of innovation and green technologies in maintaining the competitive advantage.”

INTRODUCTION

The rapid expansion of the digital economy has made data centers critical infrastructure, yet their energy intensity poses significant challenges in a low-carbon transition. As environmental regulations tighten, industries that are increasingly reliant on data centers must innovate to remain competitive without shifting operations to jurisdictions with weaker climate policies. Advancements in cooling system technologies and methodologies are central to reducing emissions while supporting performance and cost efficiency. This essay will focus particularly on the potential for Europe to apply existing industrial symbiotic models to growing data center operation investments.

INDUSTRIAL SYMBIOSIS SOLUTIONS

Industrial symbiosis is defined as a collaborative relationship between distinct entities, such as companies and factories, where they exchange resources like materials, energy, water, and byproducts. At its core, the principle of industrial symbiosis involves the waste or byproducts from one industrial process becoming raw materials or inputs for another, effectively creating a closed-loop system of resource utilization.

For maintaining competitiveness, it can generate new revenue streams from the sale or utilization of byproducts that were previously considered waste. The collaborative nature of these relationships may also open up new business opportunities and strengthen the environmental profiles of the participating organizations. In some cases, symbiosis initiatives can lead to the creation of job opportunities and improvements in working conditions through the sharing of infrastructure.

For achieving a low-carbon economy, industrial symbiosis inherently promotes increased energy efficiency and resource conservation through the optimized utilization of available materials and energy flows. It can lead to reduced raw material and waste disposal costs for participating companies by finding alternative uses for what would otherwise be discarded. By diverting waste and promoting resource reuse, industrial symbiosis effectively contributes to reduced carbon emissions and a lower environmental impact. 

​Industrial symbiosis enables European industries to repurpose waste into valuable resources in creative ways. For example, power plants have supplied waste heat for district heating systems, providing energy to local communities. This indicates strong potential for European projects to scale these solutions for the evolving landscape for data center cooling, particularly given increasing heat outputs.

DATA CENTER COOLING & INDUSTRY TRENDS

Data center cooling is the process of removing heat generated by IT equipment to maintain optimal operating temperatures and ensure reliability. Traditional air-cooling methods, long the mainstay of data center thermal management, are increasingly proving inadequate to handle the escalating heat loads generated by modern high-density computing environments, especially those supporting AI and HPC workloads. Consequently, liquid cooling is rapidly emerging as a crucial solution for achieving both sustainability and enhanced operational efficiency, with projections indicating it will surpass air cooling as the primary cooling method before the end of the current decade.

 

Figure 1. Traditional Air-Cooling (left) and Liquid Cooling (right) systems. Source: LG

The market for data center liquid cooling is experiencing substantial growth, estimated at €5.2 billion in 2024 and forecasted to reach €44.2 billion by 2034, demonstrating a robust CAGR of 23.96%. Recent surveys indicate that 22% of data centers are currently utilizing direct liquid cooling (DLC) technologies, with a further 61% actively considering its adoption in the future. This growing interest is further amplified by the anticipated impact of new hardware platforms like NVIDIA’s Blackwell, which is expected to drive the adoption rate of liquid cooling solutions from approximately 10% in 2024 to over 20% in 2025. 

Figure 2. Liquid-cooling versus air-cooling forecast, 2021-2028. Source: Omdia

The increase in both the regulatory requirements and market availability of more sophisticated cooling systems will continue to directly affect the amount of heat byproduct. This escalating heat output presents both a challenge and an opportunity to maintain competitiveness in the low-carbon economy. The potential for utilizing this waste heat as a resource aligns with the principles of industrial symbiosis.

SYMBIOTIC MODEL FOR DATA CENTER HEAT OUTPUTS

Data centers generate substantial quantities of low-grade waste heat, typically in the range of 25-35°C from traditional air-cooling systems. Liquid cooling technologies can potentially yield even higher waste heat temperatures, often between 50-60°C. This thermal byproduct, often simply vented into the atmosphere, presents a significant opportunity for capture and reuse in various applications.

Thermal byproducts can be utilized for heating nearby buildings, including residential, commercial, and industrial facilities, through the establishment of district heating networks. For example, Microsoft’s data centers in Finland are designed to supply their waste heat to the cities of Espoo and Kauniainen for district heating purposes. Similarly, Facebook’s data center in Odense, Denmark is utilizing its waste heat to warm thousands of homes. A data park in Stockholm has set an ambitious goal of using waste heat from data centers to meet 10% of the city’s heating needs by the year 2035. Octopus Energy has made a significant investment in Deep Green’s innovative data center heat reuse technology, which aims to roll out systems for public swimming pools across the UK.

For agricultural and aquacultural purposes, recovered heat can support greenhouses, enabling crop cultivation and fish farming. The RISE Research Institutes of Sweden has established a partnership to reuse waste heat generated by data centers to heat greenhouses where Containing Greens grows lettuce for local restaurants. Green Mountain in Norway has partnered with lobster farmers to utilize the heated water discharged from its data center for a novel land-based lobster farming operation.

Figure 3. Illustration (left) of Lobster Production Facility (right). Source: Green Mountain

ADVANTAGES & RISKS

Adopting industrial symbiosis principles offers significant economic benefits for European firms. Waste heat recovery can lead to revenue generation through the sale of thermal energy. Engaging in resource exchange can lower operational costs and enhance a data center’s reputation, attracting environmentally conscious clients and investors. Furthermore, transitioning to sustainable data centers may make companies eligible for additional green financing options and government incentives for which they otherwise wouldn’t qualify. From an environmental perspective, waste heat recovery leads to a reduction in the carbon footprint of data center operations. By participating in resource exchange, data centers contribute to a circular economy, minimizing waste. 

However, the implementation of data center waste heat reuse is not without its challenges. Effectively matching the supply of heat with the demand from potential users can be complex, as both can fluctuate based on seasonal variations and operational schedules. The costs associated with building the necessary infrastructure to distribute the heat, especially over longer distances, can also be significant. In some cases, the temperature of the waste heat generated by the data center might be lower than what is required by the end-user, necessitating the use of heat pumps to boost the temperature, which adds to the complexity and energy consumption of the system. Data center operators might also have reliability concerns about integrating their operations with external heat users and may be hesitant to invest in the necessary heat recovery equipment. 

CONCLUSION AND AREAS FOR FURTHER STUDY

​Industrial symbiosis, particularly through waste heat recovery, enhances digitalization sustainability and creates new value streams for data centers and their communities. Benefits include reduced operational costs, lower carbon footprints, and improved reputations. Implementing heat reuse initiatives can bolster competitiveness by providing an additional revenue stream and reducing environmental impact, making facilities more attractive to customers and stakeholders. Furthermore, in the business-to-business landscape, sustainability is rapidly becoming a key differentiator, especially when data centers seek partnerships with large tech companies that have established ambitious environmental sustainability targets of their own.

Government incentives specifically designed to support green data center development can help to offset the initial capital investments required for advanced cooling technologies and industrial symbiosis projects, making them more economically feasible. At the EU level, the Energy Efficiency Directive (EU/2023/1791) and European Cluster Collaboration Platform (ECCP) are creating a policy landscape that encourages these practices. Furthermore, industry-led efforts, like the Climate Neutral Data Centre Pact, can contribute to driving sustainable practices within the sector. Increased dialogue between governments, researchers, IT manufacturers, and firms with increasing data demand should explore the standardization of the equipment in order to meet interoperability needs across the continent. 

Finally, this essay did not explore the potential for industrial symbiosis on the major input for data cooling: water. While DLC, immersion cooling, and AI-monitoring promise to significantly reduce the consumption of water, it remains a pressing concern. The reason for omitting an analysis on these systems is due to the fact that the specific application of treated wastewater as a coolant in DLC systems appears to be in a nascent stage in the United States and Singapore, with no widely publicized examples in Europe.The stringent water quality requirements for DLC mean that the treatment of wastewater would need to be exceptionally thorough. However, as DLC adoption increases it’s highly probable that research and pilot projects exploring the feasibility of treated wastewater for DLC are underway or will emerge in the near future. Platforms like the Water Reuse Europe Knowledge Exchange Day could potentially feature future discussions on the scalability of these projects in Europe. Additionally, EU projects, like ReNutriWater, are advancing water recycling technologies that might be relevant to delivering high-quality water to data centers in the future.