Malaysia's Plan to Cool Data Centers with Palm Oil: What Is Sawit EcoTherm and Will It Work?

Key properties claimed by MPOB include:

• High dielectric strength, meaning it does not conduct electricity and will not short-circuit server components
• A high flash point for safety
• PFAS-free chemistry
• Up to 95% bio-based content derived from sustainably sourced palm oil fractions
• Readily biodegradable with low ecological toxicity, according to MPOB

MPOB claims that immersion cooling with Sawit EcoTherm can reduce energy consumption by 30–50% compared to conventional air or water-based cooling systems . The name "Sawit" comes from the Malay word for oil palm .

Current Status: Tested but Not Yet for Sale

Sawit EcoTherm has been tested in real operating environments, but it is not yet commercially available, and no pricing has been announced . MPOB is in the process of finalizing a licensing agreement with a domestic manufacturer to bring the fluid to market .

In July 2026, MPOB published an official technology transfer document (TT702) stating that the technology is being formally offered for commercial adoption . The document describes the fluid as a "palm-based non-conductive coolant" that "exhibits high dielectric strength, ensuring safe direct contact cooling of high-density server components without risk of short circuits" .

Before widespread adoption can occur, the technology will require more pilot projects, technical validation by independent third parties, and a clear pricing model .

The Water Problem Sawit EcoTherm Aims to Solve

Data centers consume enormous amounts of water, almost all of it for cooling. According to the International Energy Agency (IEA), the global data center sector consumed an estimated 560 billion liters of water in 2024. The IEA projects this figure will more than double to 1.2 trillion liters by 2030 as AI infrastructure scales up .

To put that in per-facility terms:

• A typical data center uses about 300,000 gallons (~1.1 million liters) per day, equivalent to the water demand of roughly 1,000 households .
• Large hyperscale data centers can consume 1–5 million gallons (~3.8–19 million liters) per day, comparable to a town of 10,000–50,000 people .
• An average 100-megawatt data center uses about 2 million liters per day — equal to the consumption of 6,500 households .

Globally, 75% to 90% of data centers still rely on water-based cooling systems . As AI workloads drive demand for more powerful chips and denser server racks, these numbers are expected to climb sharply. MPOB estimates that conventional cooling across Malaysia's growing data center sector alone could require up to 876 million liters of water per day, roughly the daily needs of four million people .

Environmental Concerns: Can Palm Oil Be a "Green" Coolant?

The proposal has drawn significant criticism on several fronts:

Palm plantation expansion. Environmentalists warn that scaling up Sawit EcoTherm could drive demand for new palm plantations, accelerating deforestation, peatland conversion, and habitat loss in Malaysia and Indonesia . The South China Morning Post reported that the proposal "has raised concerns that it could lead to an expansion of palm plantations and create an environmental burden" .

Biodiversity risk. Expansion of palm oil cultivation is linked to the destruction of tropical rainforests and endangered species habitats, especially orangutans and Sumatran elephants .

Land-use conflict. Malaysia is already trying to protect arable farmland from being converted for data center construction. The Business Times reported that Malaysia is working with state governments to protect farmland from industrial expansion, with about 25,000 hectares already earmarked for protection . Adding palm oil demand for cooling could intensify pressure on land resources . Malaysia's government aims for 81 data centers by 2035, and some palm oil companies are already pivoting their estates toward data center and solar projects .

Carbon footprint. Even with claims of sustainable sourcing, palm oil production carries a high carbon debt when forests are cleared, which could offset the energy-efficiency gains of the cooling fluid .

Unknown lifecycle impact. Independent lifecycle assessments of Sawit EcoTherm — including its biodegradability, disposal requirements, and net environmental impact compared to synthetic alternatives — have not been publicly released .

The Bottom Line

Sawit EcoTherm offers a promising water-free cooling solution for a data center industry facing severe water stress. But the technology remains in a pre-commercial stage, and the environmental baggage of palm oil production raises serious questions about whether the trade-offs are worthwhile. Until independent lifecycle data is published and a sustainable sourcing framework is demonstrated, the claim that a palm oil coolant is "greener" than alternatives will remain unproven.

Correction (August 2026): An earlier version of this article suggested Google's data centers used 10.9 billion gallons of water in 2025. That figure, from Google's 2026 Environmental Report, refers to Google's total global water consumption across all operations, not just data centers . The IEA data center water figures cited above remain correct.