Senate Proposes 11% Annual Emissions Cut for Data Centers

The U.S. Senate has introduced a draft bill aimed at imposing emissions-related fees on data centers that support blockchain networks and artificial intelligence operations. This legislation, known as the “Clean Cloud Act,” is sponsored by Democratic Senators Sheldon Whitehouse and John Fetterman. The bill seeks to address the growing environmental impact of energy-intensive computing operations by establishing emissions performance standards for large-scale data centers and crypto mining facilities with over 100 kilowatts of installed IT nameplate power.

The proposed standards would be based on regional grid emissions and would target an 11% annual reduction in emissions. Facilities that fail to meet these standards would face a financial penalty of $20 per ton of carbon dioxide equivalent (CO2e), with the fee increasing annually by inflation plus $10. The Senate Committee on Environment and Public Works highlighted that the power demand from data centers and crypto miners is rising faster than the supply of carbon-free electricity, which could lead to energy price hikes for consumers.

Projections indicate that data centers could account for as much as 12% of U.S. electricity consumption by 2028. Research by Morgan Stanley estimates that data centers worldwide could contribute up to 2.5 billion metric tons of CO2 emissions by 2030. Critics, however, argue that the bill unfairly targets certain sectors. VanEck’s head of research, Matthew Sigel, described the proposal as a misguided attempt to shift blame onto server infrastructure, including Bitcoin mining, terming it a “losing strategy.”

The proposed legislation may also conflict with the current administration’s policies on cryptocurrency and AI. President Donald Trump has reversed a 2023 executive order by President Joe Biden that imposed AI safety regulations and has publicly declared his ambition to position the U.S. as the global hub for both cryptocurrency and AI innovation. Meanwhile, crypto mining firms like Galaxy, CoreScientific, and Terawulf have increasingly pivoted toward high-performance computing (HPC) services to support AI models. With AI’s unprecedented demand for data center and GPU resources, these companies are finding new opportunities in the AI sector by converting their existing infrastructures.

Last year, Core Scientific announced a partnership with AI startup CoreWeave, expected to generate approximately $3.5 billion in revenue over 12 years. Core Scientific CEO Adam Sullivan stated, “We view the opportunity in AI today to be one where we can convert existing infrastructure we own to host clients who are looking to install very large arrays of GPUs for their clients that are ultimately AI clients.” The company has identified about 500 megawatts of capacity available for conversion to AI facilities, potentially the largest GPU installment dedicated to AI globally.