The chip industry’s energy consumption more than doubled in eight years. Greenhouse gas emissions also rose sharply. The findings raise questions about the future of sustainable chip production in Europe.
A report by Interface reveals that global energy consumption in the semiconductor industry increased from 58,326 gigawatt hours (GWh) in 2015 to 131,278 GWh in 2023. This represents more than a twofold increase in energy usage over an eight-year period. This significant rise is attributed to both growing chip demand and increasingly sophisticated manufacturing processes that require greater power resources.
Greenhouse gas emissions have also increased dramatically. Direct CO₂ emissions from the industry, which originate from the manufacturing processes themselves, climbed from 15.4 million tons of CO₂ equivalents in 2015 to 27.2 million tons in 2021. Subsequently, they declined to 18.9 million tons in 2023, potentially due to enhanced production efficiency and implementation of cleaner technologies.
Industry uses renewable energy certificates
Beyond direct emissions, the industry’s energy consumption significantly impacts total emissions. Although power consumption rose by 125 percent, indirect emissions—those resulting from electricity usage—increased by only 71 percent. This discrepancy suggests chip manufacturers are increasingly utilizing renewable energy certificates (RECs) to minimize their carbon footprint.
The most substantial increase occurred in Scope 3 emissions, which encompass the entire production chain, including suppliers and customers. These emissions grew from 11.7 million tons of CO₂ equivalents in 2015 to 87.4 million tons by 2023—more than a sevenfold increase. Researchers suggest this dramatic rise may partly reflect improved reporting practices, while cautioning that transparency remains limited regarding actual emissions in later stages of the production chain.
Sustainability concerns for European chip industry
The European Commission recently eased regulations through the Omnibus package, requiring less stringent sustainability reporting from companies. While intended to reduce administrative burdens and foster innovation, this regulatory relaxation makes it more difficult to accurately assess the industry’s environmental impact.
Europe aims to reduce its dependence on Asian chip manufacturers, but expanding domestic production presents significant environmental challenges. Manufacturing advanced chips—essential for artificial intelligence and data centers—consumes substantially more energy and water than older chip technologies. This presents the EU with a difficult strategic choice: pursue development of cutting-edge chips, or focus on producing more sustainable, less complex legacy chips used in applications such as automobiles and energy infrastructure.
According to researchers, the primary challenge is the absence of a harmonized sustainability reporting system within the industry. Without standardized frameworks, accurately mapping the chip industry’s true carbon footprint remains problematic. Furthermore, sustainability data must be contextualized with information regarding production process efficiency and factory capacity utilization.
Future of the industry: green chips as a competitive advantage?
The report indicates that despite significant challenges, more sustainable chip production also presents opportunities. Europe enjoys a relatively advantageous position due to better access to renewable energy and stricter environmental standards compared to many Asian countries. This could potentially provide a long-term competitive edge, especially if more stringent climate regulations become globally standardized.
The question remains how the EU will define its role in the global chip industry. Will Europe fully commit to producing the most advanced chips despite their higher carbon footprint? Or will it adopt a strategy focusing on energy-efficient production methods and manufacturing less polluting chips?
With increasing chip demand and growing pressure to meet climate targets, Europe must soon determine the future direction of its semiconductor industry.
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