Rolls-Royce and Microsoft Promote HVO as a Sustainable Fuel for Singapore’s Data Centre Sector
Rolls-Royce’s Power Systems division, in collaboration with Microsoft, has released a detailed position paper examining the potential of Hydrotreated Vegetable Oil (HVO) as a sustainable, transitional fuel for powering backup generators in Singapore’s data centres. The document emphasizes how HVO could provide a practical pathway to decarbonisation while ensuring energy security for the country’s fast-expanding digital economy.
Why HVO Matters for Data Centres
Data centres play a vital role in Singapore’s economy, hosting critical digital infrastructure that supports finance, e-commerce, cloud services, and emerging technologies such as artificial intelligence. However, these facilities are energy-intensive and rely heavily on diesel-powered generators to secure backup power in the event of grid failures. With Singapore aiming to achieve net-zero emissions by 2050, the challenge lies in reducing the carbon footprint of these backup systems without compromising reliability.
HVO presents itself as a promising alternative. Produced from waste and residual fats and oils, HVO is a bio-based paraffinic fuel capable of cutting lifecycle carbon dioxide emissions by up to 90% compared with fossil diesel. Unlike other renewable energy technologies that may require costly overhauls, HVO is compatible with existing diesel generator infrastructure, provided those systems have been approved for use with the fuel. This makes it an immediately deployable option for operators who want to decarbonise without waiting for long-term technological breakthroughs.
The paper highlights how HVO aligns seamlessly with Singapore’s Green Data Centre Roadmap (GDCR), which encourages the industry to explore low-carbon energy solutions while maintaining operational resilience.
Key Enablers for Adoption
Despite its advantages, widescale adoption of HVO in Singapore’s data centre sector will require coordinated efforts across government, industry, and the supply chain. Rolls-Royce and Microsoft outline several priorities that could accelerate progress:
- Harmonisation of standards to ensure consistent quality and performance across suppliers and jurisdictions.
- Cost competitiveness through market incentives and supply chain development to make HVO financially attractive compared with conventional diesel.
- Regulatory clarity, including streamlined approvals for sustainable fuels in backup power applications.
- Partnerships and collaboration among technology providers, energy companies, and data centre operators to build confidence and drive demand.
- Ongoing research and innovation to enhance efficiency, scalability, and integration of biofuels in critical infrastructure.
Together, these factors can provide the planning certainty and investment confidence needed for companies to commit to HVO as a serious component of their sustainability strategies.
Voices from Industry Leaders
Tobias Ostermaier, President of Stationary Power Solutions at Rolls-Royce Power Systems, stressed Singapore’s unique position to pioneer the transition:
“We believe that Singapore is well-positioned to lead the adoption of HVO with the right policy framework, infrastructure and support. 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.”
Giovanni Spadaro, President of Global Markets at Rolls-Royce Power Systems, underscored the broader economic opportunity:
“As the regional digital economy accelerates, data centres have become a critical growth driver for both Singapore and Asia. 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.”
From Microsoft’s perspective, the partnership reflects its commitment to sustainability at a global scale. Kavickumar Muruganathan, Cloud ESG Planning Director for Microsoft Asia Pacific, said:
“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.”
A Transitional but Crucial Step
While HVO may not represent the ultimate long-term solution for decarbonising energy systems, Rolls-Royce and Microsoft present it as a vital transitional technology. Its immediate deployability, compatibility with current infrastructure, and strong carbon-reduction potential make it particularly relevant for Singapore, where land and renewable resources are limited but the demand for digital services continues to rise.
By adopting HVO, Singapore could reduce emissions from its growing network of data centres without waiting for hydrogen, fuel cells, or other advanced energy technologies to mature commercially. As the paper concludes, the transition to low-carbon fuels like HVO is not only about meeting sustainability targets but also about safeguarding the reliability of the digital backbone that underpins economic growth.
