Rolls-Royce & Microsoft Hail HVO in Singapore Data Centres

Rolls-Royce’s Power Systems division has published a position paper with Microsoft on the potential of Hydrotreated Vegetable Oil (HVO) to decarbonise backup power for Singapore’s data centre sector. 

The paper outlines how HVO can act as a transitional fuel, reducing reliance on fossil diesel while other long-term low-carbon alternatives are developed.

HVO as an immediate solution

HVO is produced from waste and residual fats and oils, delivering up to 90% lower lifecycle CO₂ emissions compared to conventional diesel. 

The fuel is compatible with existing diesel generators, provided systems are approved for HVO use, which means data centres can adopt it without major infrastructure changes.

The approach aligns closely with Singapore’s Green Data Centre Roadmap (GDCR), a policy framework that sets the path for sustainable growth in one of the world’s most energy-intensive digital sectors. 

For operators, HVO offers an immediately deployable solution to address emissions from standby power generation.

Creating the right conditions

The position paper sets out several priorities for wider adoption, including the harmonisation of standards, regulatory streamlining, cost competitiveness, stronger supply chain partnerships and continued research and innovation. These factors are seen as critical to unlocking the potential of HVO in the Singapore market.

“We believe that Singapore is well-positioned to lead the adoption of HVO with the right policy framework, infrastructure and support,” says Tobias Ostermaier, President Stationary Power Solutions at Rolls-Royce Power Systems. 

“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.”

A growth driver for Asia

Singapore has become a hub for data centre development, underpinned by its role as a regional digital economy leader. 

However, the sector’s high energy demand has placed pressure on both operators and policymakers to find credible paths to sustainability.

“As the regional digital economy accelerates, data centres have become a critical growth driver for both Singapore and Asia,” says Giovanni Spadaro, President, Global Markets at Rolls-Royce Power Systems.

“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.”

Microsoft’s role in advancing low-carbon fuels

Microsoft, which has pledged to become carbon-negative by 2030, is backing the collaboration as part of its broader cloud sustainability strategy. 

Data centres form the backbone of Microsoft’s global cloud services and represent a major focus for its emissions-reduction agenda.

Kavickumar Muruganathan, Cloud ESG Planning Director at Microsoft APAC, says: “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.”

Collaboration and innovation as enabling forces

The position paper highlights that while renewable power and longer-term solutions such as hydrogen are being developed, transitional fuels like HVO offer an important bridge for data centres.

With Singapore’s government signalling the need for greener energy strategies to sustain digital growth, HVO presents itself as both a technically feasible and policy-aligned option.

By working with Microsoft and industry partners, Rolls-Royce is calling for a clear regulatory framework to support the wider use of HVO. 

For operators balancing rising demand with sustainability requirements, the adoption of low-carbon fuels could provide a vital near-term pathway to align growth with environmental responsibility.