Decarbonization Pressures Across the Telco Supply Chain

As the telco sector experiences growth in consumer demand, the entire value chain, network infrastructure providers, data centers and telco operators, faces increasing pressure to decarbonize. Regulatory demands, investor scrutiny and consumer expectations for sustainability are driving this shift.

In 2022, the telco industry accounted for 2-3% of global carbon emissions, lower than industries such as manufacturing and energy. However global internet traffic, mainly from video streaming, has increased at a CAGR of approx. 34% since 2015 (GSMA, 2022). That rise in traffic translates to higher electricity use and increased emissions.

The International Energy Agency states that the telco industry must reduce emissions by at least 45% to reach the Net Zero Scenario by 2030.

One of the biggest challenges is how generative AI is increasing demand for data center space, intensifying competition for real estate and leading to shortages of co-location facilities. This expansion increases carbon emissions due to the energy-intensive infrastructure required and adds pressure on real estate choices that may not prioritize clean energy or efficient design.

This all signals urgent need for comprehensive decarbonization across the telco value chain. Key players must address interconnected challenges driven by 5G network deployment, cloud service expansion and AI proliferation.

Balancing Pressures and Reducing Carbon Footprints

Network infrastructure providers, data centers and telco operators face demands for regulatory compliance, sustainability, and stakeholder confidence. Effective strategies often involve reducing direct (Scope 1) emissions, cutting indirect energy-related (Scope 2) emissions, and managing supply chain (Scope 3) emissions.

The right combination of solutions includes energy-efficient technologies, renewable electricity procurement, and strategic partnerships to minimize environmental impact across the value chain.

Effective Decarbonization Strategies for Telecommunications

To actually reduce emissions in the telco industry, companies should integrate multiple interconnected solutions:

• Energy Efficiency Projects: Decrease power consumption, improve network performance and minimize operational emissions
• Renewable Electricity Procurement: Use Energy Attribute Certificates (EACs), Power Purchase Agreements (PPAs) or Virtual PPAs (VPPAs) to green electricity use (reduce Scope 2)
• Explore Biomethane: Renewable natural gas (RNG) or BioLNG can power data centers efficiently and reduce operational carbon impact
• Biofuels Solutions: Use HVO, biodiesel or other biofuels for backup generators to reduce Scope 1 emissions while maintaining reliability
• Supplier Engagement: Encourage suppliers to adopt green energy and set science-based emissions targets to address Scope 3 emissions
• Beyond-Value-Chain Mitigation: For unavoidable emissions (for example in equipment manufacturing or third-party services) purchase high-quality carbon credits

Meeting demand for fast, reliable data while pursuing a low-carbon future is not simple. But opportunities exist: data centers in particular can significantly lower their carbon footprint through well-designed decarbonization initiatives.

How STRIVE by STX Can Help

At STRIVE by STX, we specialize in tailored decarbonization strategies for telco companies. We help you to:

• Assess your entire emissions profile (Scope 1, 2 and 3)
• Identify feasible efficiency and supply solutions
• Structure renewable electricity procurement and power supply options
• Implement supplier engagement approaches and offset strategies for residual emissions

Contact us to build a strategy that aligns growth and sustainability for your business.

Interested or have any questions?