Carbon capture attached to gas-fired power plants offers the quickest way to reduce emissions from data centers as electricity demand could rise by 100 gigawatts to 200 GW by 2030, Wood Mackenzie said in a Thursday note.
Data centers used about 450 terawatt-hours of electricity in 2025 and produced around 0.2 billion metric tons of carbon dioxide emissions annually, representing more than 0.5% of global emissions, the note said.
Wood Mackenzie said steel, chemical, and cement industries emit far more carbon dioxide at 3.5 billion mt, 3 billion mt, and 2.3 billion mt annually, respectively, limiting the broader climate impact of cleaner data centers alone.
US data centers currently emit 548 kilograms of carbon dioxide per megawatt-hour, or 48% above the national grid average, as artificial intelligence continues driving higher electricity consumption, according to Wood Mackenzie.
Natural gas remains the primary source of near-term data center power additions, while all three major combined-cycle gas turbine manufacturers are expanding capacity after reaching full order backlogs, the note said.
"With gas power dominating buildouts right now and 58 GW already in development in Texas alone, the practical question isn't whether data centers will use gas, it's whether that gas will be decarbonized," said Peter Findlay, director of CCUS Analytics at Wood Mackenzie.
Carbon capture systems can remove 92% to 98% of emissions from gas-fired plants, while developers can install the technology within three to four years or retrofit existing facilities within three to five years.
The note estimated carbon capture would increase US gas-fired electricity costs by $15/MWh to $45/MWh after federal 45Q tax incentives, raising total power costs to roughly $115/MWh.
"At roughly $115 per MWh including capture, this represents a manageable premium for decarbonized power," Findlay said, adding that the technology is already commercially available and ready to scale.
Enhanced geothermal systems could lower electricity costs to about $61 per MWh between 2030 and 2035, though only 1.5 GW are currently in the development pipeline.
The note said restarted nuclear plants could generate decarbonized electricity at roughly $155 per MWh, although only 11.5 GW of retired nuclear capacity remains available in the US.
Wood Mackenzie said long-duration energy storage technologies still face high costs of $100/MWh to $300/MWh, limiting their competitiveness against other low-carbon energy options.
Wood Mackenzie said renewable energy and battery storage will remain important for cleaner power grids, although solar and wind alone cannot reliably meet constant data center electricity demand without significant natural gas backup.
"This isn't an either-or situation," Findlay said. "Renewables will help decarbonize the overall grid, which benefits everyone. But for data centers specifically - with their massive, constant power demands - you need firm capacity."
Wood Mackenzie said hyperscalers are facing growing pressure to balance rapid expansion of artificial intelligence with long-term emissions-reduction commitments.
"Global data center emissions will increase," Findlay said, adding that strong balance sheets and public sustainability commitments will shape how hyperscalers address emissions over the coming decades.