19/08/2026 (Ofimagazine) - A research team at the Malaysian Palm Oil Board (MPOB) is developing a palm oil- based liquid to replace the use of water in cooling computer servers as the country grapples with increased demands to support its rapidly expanding digital infrastructure, according to a South China Morning Post (SCMP) report.

According to National Water Services Commission data, data centres in the country were using 28.68M litres/day of water as of January.

MPOB’s new Sawit EcoTherm technology was moving closer to commercialisation, the 12 August report said.

However, the proposal had raised concerns that it could lead to an expansion of oil palm plantations, SCMP wrote.

Noor Khairin Mohd, a MPOB senior research officer, said the coolant research had been tested in an operational environment, with a licensing agreement being finalised with a local manufacturer at the time of the report.

Cooling a 100MW data centre with a palm oil-based coolant would cost US$2.44-$6.10/kg compared with US$12.20-$19.52 for synthetic and petrol-based alternatives, Mohd explained.

According to MPOB data, a data centre of that size could consume 1.7M-4.2M litres/day of water, while the Sawit EcoTherm system could eliminate water consumption.

The technology could also substantially reduce energy consumption by eliminating server fans and mechanical air conditioning, potentially reducing operational costs by 30%-50% and reducing data centre energy consumption by up to 40%, Mohd added.

In June, Fadillah Yusof, Malaysia’s minister of Energy Transition and Water Transformation told parliament that as of April, data centres in Malaysia were using half of the electricity and water capacity approved for data centres.

In a written parliamentary reply on 24 June, Yusof said the government had put measures in place, including comprehensive technical assessments, to ensure the rapid growth of data centres would not affect water and energy supplies for consumers and planned developments.

Data from Malaysia’s Investment Development Authority showed that 143 data centres and cloud computing investment projects valued at US$35.23bn were approved between 2021 and mid-2025.

While reducing water and improving energy efficiency was meaningful, “palm-derived” should not automatically be equated with “greener”, according to experts.

“The relevant question is the full lifecycle footprint from feedstock and processing to transport, use, performance and end-of-life,” said Renard Siew, a sustainability and climate change specialist and head of corporate sustainability at Yinson.

Sustainability would be more challenging if demand for palm-derived cooling fluid led to an expansion of palm plantations, thus shifting the environmental burden upstream, Siew added.

“Adoption should … be linked to no deforestation commitments, traceable and certified feedstock, strong land-use safeguards, and preferably the use of existing responsible palm-based by-products rather than creating incremental demand for primary agricultural production,” he said.

Yeah Kim Leng, director of the economic studies programme at Sunway University, said Sawit EcoTherm technology could boost demand for palm oil and support stronger pricing for the industry.

“It would incentivise expanded plantings and intensified efforts to improve fruit and oil extraction yields,” Leng added.

Amid growing concerns over high water consumption of data centres, the adoption of palm oil-based coolants could offer an alternative, he said.

https://www.ofimagazine.com/news/malaysia-researchers-explore-use-of-palm-oil-to-cool-data-centres-amid-surge-in-water-demand