California data centers required to achieve carbon-free energy and create jobs by 2025

California Senate Bill 58, introduced on January 29, 2025, aims to promote sustainable practices in the rapidly growing data center industry while addressing environmental concerns and job creation in the state. The bill sets forth a framework for certifying data center facilities that commit to significant investments and adhere to stringent environmental standards.

At its core, SB 58 requires qualifying data centers to create a minimum of 20 new jobs in their respective counties and invest at least $200 million in their operations. These facilities must also utilize a skilled and trained workforce during construction, ensuring that local labor is prioritized. A key provision mandates that at least 70% of the energy consumed by these centers must come from carbon-free sources, with a gradual increase in this percentage over time. Additionally, the bill stipulates that at least 50% of the energy supply must be sourced from behind-the-meter systems, promoting localized energy generation.

Water conservation is another critical focus of SB 58. The bill requires data centers to implement recycled water cooling systems and adopt waterless landscaping practices. If landscaping requires water, it must be generated on-site using renewable-powered atmospheric water generation equipment. Notably, the use of diesel fuel for backup power systems is prohibited, reflecting a broader commitment to reducing carbon emissions.

The introduction of SB 58 has sparked discussions among stakeholders, with proponents highlighting its potential to create jobs and foster sustainable development. However, some critics express concerns about the feasibility of the stringent energy and water requirements, arguing that they may pose challenges for smaller operators in the data center sector.

The implications of this legislation are significant, as California continues to grapple with water scarcity and the need for sustainable energy solutions. By incentivizing eco-friendly practices in the data center industry, SB 58 could serve as a model for other states looking to balance economic growth with environmental stewardship.

As the bill moves through the legislative process, its future will depend on negotiations among lawmakers, industry representatives, and environmental advocates. The outcome could reshape the landscape of data center operations in California, setting a precedent for sustainable practices in technology infrastructure nationwide.