Rolls-Royce & Microsoft: Could HVO Power Data Centres?

Rolls-Royce’s Power Systems division, in collaboration with Microsoft, has published a position paper on using Hydrotreated Vegetable Oil (HVO) to decarbonise backup power for Singapore’s data centre sector. 

The paper outlines how HVO can act as a transitional fuel, reducing reliance on fossil diesel while other long-term low-carbon alternatives are developed.

The approach aligns closely with Singapore’s Green Data Centre Roadmap (GDCR), a policy framework that sets the path for sustainable growth in one of the world’s most energy-intensive digital sectors. 

Generated from waste and residual fats, this HVO can achieve up to 90% lower CO₂ emissions compared to conventional diesel.

Additionally, its compatibility with existing diesel generators makes it an attractive option for data centres, eliminating the need for extensive infrastructural modifications. 

Making HVO a practical reality

The position paper sets out several priorities for wider adoption, including the harmonisation of standards, regulatory streamlining, cost competitiveness, stronger supply chain partnerships and continued research and innovation. These factors are seen as critical to unlocking the potential of HVO in the Singapore market.

“We believe that Singapore is well-positioned to lead the adoption of HVO with the right policy framework, infrastructure and support,” says Tobias Ostermaier, President Stationary Power Solutions at Rolls-Royce Power Systems. 

“HVO is a practical step to decarbonise critical infrastructure and provides an immediately deployable lever to reduce emissions for the potential-rich data centre sector. What’s needed now is a clear regulatory framework to support the use of sustainable fuels like HVO, which will enable planning certainty and investment confidence.”

A growth driver for Asia

Singapore has become a hub for data centre development but the sector’s high energy demand has placed pressure on both operators and policymakers to find credible paths to sustainability.

“As the regional digital economy accelerates, data centres have become a critical growth driver for both Singapore and Asia,” says Giovanni Spadaro, President, Global Markets at Rolls-Royce Power Systems.

“Rolls-Royce Power Systems is committed to unlocking its potential via carbon-efficient fuel solutions. This can serve as a sustainable source of power that provides growth and is aligned with key national goals such as the Green Data Centre Roadmap. 

“It is vital that we continue working with our partners, including Microsoft, to create the necessary conditions that can make this a reality.”

Microsoft’s role in advancing low-carbon fuels

Microsoft, which has pledged to become carbon-negative by 2030, is backing the collaboration as part of its broader cloud sustainability strategy. 

Data centres form the backbone of Microsoft’s global cloud services and represent a major focus for its emissions-reduction agenda.

Kavickumar Muruganathan, Cloud ESG Planning Director at Microsoft APAC, says: “This paper underscores our commitment to fostering innovation in low-carbon energy sources. By aligning with Microsoft’s global 2030 sustainability ambitions, we are dedicated to driving solutions that not only meet our current energy needs but also pave the way for a carbon-negative future. 

“Our collaboration in this highlights our resolve to lead the charge in decarbonising at scale and promoting low-carbon fuels across the region.”

The position paper highlights that while renewable power and longer-term solutions such as hydrogen are being developed, transitional fuels like HVO offer an important bridge for data centres.

By working with Microsoft and industry partners, Rolls-Royce is calling for a clear regulatory framework to support the wider use of HVO.