In March this year, a series of ‘expectations’ were announced that included “secure new and additional clean energy generation and/or storage to offset demand”. Since then, the Australian Energy Market Commission (AEMC) has been tasked with figuring out what ‘new’, ‘additional’, and ‘clean’ all actually mean. You’ll find the industry’s greenwashing lifeline buried in these grey areas and jargon.
Mon 3 Aug 2026 13.56 AEST
Photo: AAP Image/Dan Himbrechts
Data centre developers in Australia, and their various customers (big tech companies like Microsoft, Anthropic and Amazon), were clearly not expecting to be held to any sort of mandated standard when it comes to the energy they consume.
In March this year, a series of ‘expectations’ were announced that included “secure new and additional clean energy generation and/or storage to offset demand”. Since then, the Australian Energy Market Commission (AEMC) has been tasked with figuring out what ‘new’, ‘additional’, and ‘clean’ all actually mean.
You’ll find the industry’s greenwashing lifeline buried in these grey areas and jargon. What they’re hoping for is something – some sort of ‘regulation’ that’s put in place, but with no real teeth. Weak, ineffective pseudo-regulation is far, far better than no regulation at all.
This is why data centre companies have been on a lobbying spree decrying the pathway of actually implementing real regulations on data centre developers and technology companies; requiring them to actually at least cover off their new demand with real new clean energy.
A few months ago, the lobby group, Data Centres Australia (DCA), was touting big tech as the saviour of a flailing clean energy buildout in Australia. Now that actual regulation is a possibility, the current chorus coming from the big players is that, actually, data centres won’t be able to match their demand with clean energy.
This pivot from heroic saviour to passive, helpless victim is a trick the fossil fuel industry has pulled with CCS many times in the past.
The industry’s lobbying seemed to work pretty well – Albanese’s latest statement on data centres pares back the language around renewables and clean energy, and includes some weasel-words that allow for gas.
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But, what happens now? I think the industry’s core greenwashing tactics will feature in whatever ends up being announced as the final regulations. So you know what’s coming down the line, let me introduce you to them.
‘Renewable energy credits’, or RECs, are certificates granted to a renewable energy facility (usually wind or solar) when it generates one megawatt hour of nearly emissions-free energy. That can be sold to an electricity consumer, who can then claim their power was clean.
If it sounds like a carbon offset, that is because that is exactly what a REC is. While they had a role back in the early 2010s in getting expensive projects off the ground, in 2026 they do almost nothing but mislead. They are not driving renewable energy growth, and it makes zero sense for purchasers to claim their power is clean.
When Data Centres Australia repeatedly say ‘we offset 70% of our electricity’, just under half of that relates to these certificates. So when they claim data centres “accelerate Australia’s clean energy transition”, at least half of that is simply a flat-out fabrication.
The other key way heavy power consumers claim their consumption is clean, is by doing power purchasing deals with renewable energy projects. The logic here is that deal is the thing that makes that project come online; without the intervention, it would’ve never happened. And on those grounds, the dealmaker gets to claim the power output as their own, and their emissions as zero.
As I found in a recent analysis, what happens here is these deals get done for projects that would have gone ahead anyway. This is the other half of Data Centres Australia’s claim they’re ‘offsetting’ most of their energy consumption. You can find these deals for truly new (“additional”) projects, but you can also find many done for old projects that had already secured financing, begun construction, or in some cases begun operations.
Think about what happens when an industry is dripping with greenwashing like this.
Tech companies in Australia are aggressively ratcheting up their power demand, and they’re touting that as ‘clean’ because they claim buying certificates, or doing long-term power deals, makes an equivalent amount of clean energy spring into existence. It is very literally the same as Woodside claiming 100% of their pollution is ‘undone’ because they fund climate action elsewhere (it isn’t, and they don’t).
But renewable energy growth in Australia continues to lag way, WAY behind where it needs to be.
The data centres draw from the grid instead: resulting in more coal and gas generation, and emissions that fall way slower than they would have without the boost from big tech. In America, renewable energy is growing, but data centre driven demand is growing faster, and so the net result is more fossil fuel use than would’ve otherwise occurred. Australia’s set for the same fate, without stricter regulations.
Disappointingly, Australia’s Clean Energy Council has suggested the purchase of renewable offsets could fill the ‘gap’ between the rushed, anxious data centre build-out happening today and the slow, delayed renewable energy roll-out that’ll occur over a longer time period. This is referred to as a “glide path” that allows tech companies to rush into data centre construction while shrugging off the climate and environmental impacts as ‘covered’ by these dodgy certificates.
This exact issue is playing out in Ireland, where researcher Hannah Daly found that a ‘glide path’ model actually results in a lower share of renewable energy, and higher emissions. Of course it does: if you allow the industry to pollute unchecked for many years, you end up with more pollution. If you grant them a way to mask that damage using greenwashing, you get even more pollution.
Caving to the demands of an industry that doesn’t want to deal with its own damage is a pattern in Australia. The Safeguard Mechanism enables pretty much exactly the same problems in the coal and gas industries: a fake regulation designed to divide critics, misdirect attention and bury scrutiny under an avalanche of jargon, formulas and pointless technocratic complexity. If things don’t shift direction, we’re witnessing the birth of the same problem for Australia’s AI slop sector.
Ketan Joshi is a Senior Research Associate at the Australia Institute.
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