Rolls-Royce Publishes Position Paper with Microsoft on the Use of Hydrotreated Vegetable Oil (HVO) for the Singapore Data Centre sector

• Rolls-Royce advocates for targeted policies to unlock HVO’s potential as a transitional low-carbon fuel while other solutions are being developed as low carbon long-term substitutes for fossil diesel
  
• Up to 90% lifecycle CO₂ reduction compared to fossil diesel: HVO enables immediate and significant emission cuts in backup power for data centres using existing infrastructure
  
• Advances Singapore’s leadership in sustainable data centre solutions.
  

Rolls-Royce’s Power Systems division has released a position paper with Microsoft highlighting the potential of Hydrotreated Vegetable Oil (HVO) as a sustainable transitional fuel for backup power in data centres in Singapore. The paper outlines the opportunities and regulatory conditions necessary to establish HVO and other low-carbon fuels as alternatives to fossil diesel in critical digital infrastructure.

HVO is a high-quality bio-based paraffinic fuel produced from waste, residual fats and oils, which can reduce lifecycle CO₂ emissions by up to 90% compared to fossil diesel and is compatible with existing diesel generator infrastructure without technical modifications, provided the systems are approved for HVO use. For data centres, this provides a practical and immediately deployable solution to decarbonise backup power. It furthermore aligns with Singapore‘s Green Data centre Roadmap (GDCR) and its longer term 2050 net-zero targets.

The position paper identifies priorities to enable full HVO adoption, including harmonisation of standards, ensuring cost competitiveness, streamlining regulatory approvals, strengthening market development and partnerships across the supply chain, and continuing to drive research and innovation.

 “We believe that Singapore is well-positioned to lead the adoption of HVO with the right policy framework, infrastructure and support.” said 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.”

Giovanni Spadaro, President, Global Markets, Rolls-Royce Power Systems, added: “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.” 

Kavickumar Muruganathan, Cloud ESG Planning Director Microsoft APAC 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."