Nebius Reports 32x Jump in Carbon Emissions Amid Rapid Data Center Expansion

European neocloud provider Nebius has reported a dramatic 32-fold increase in carbon emissions over the past year, a direct consequence of the rapid expansion of its data center footprint. The company's 2025 sustainability report, released this week, reveals a surge in Scope 1 and Scope 2 emissions from 2,036 tons of CO2e in 2024 to 65,001 tons in 2025 on a market-based basis. The sharp rise underscores the growing environmental cost of the AI infrastructure boom, as hyperscale and neocloud operators race to build out compute capacity to meet surging demand for artificial intelligence workloads.

The emissions spike is largely attributed to the expansion of Nebius's operational base to seven active sites, with data center operations accounting for 99 percent of its market-based Scope 1 and 2 emissions in 2025. The company, which operates facilities across the US, the Middle East, and Europe, is in the midst of an aggressive buildout phase. In the US, Nebius is set to lease data centers in New Jersey (Vineland, DataOne) and Missouri (Kansas City, Patmos), while also developing its own facilities in Independence, Missouri, and Birmingham, Alabama. Earlier this month, reports emerged that the company is seeking to develop a 1.2GW campus in Butler Township, Pennsylvania, signaling further expansion on the horizon.

Notably, Nebius did not disclose its Scope 3 emissions, which encompass indirect emissions from hardware manufacturing, construction, and supply chain activities. The company stated that its reporting boundaries, data systems, and processes for collecting reliable supplier and activity data "are still being developed," and that available data "would not support a representative inventory" for 2025. This omission is significant, as Scope 3 emissions typically constitute the vast majority of a data center operator's total carbon footprint, particularly when accounting for the embodied carbon in servers, chips, and building materials.

On operational efficiency, Nebius reported a weighted average power usage effectiveness (PUE) of 1.25 across its portfolio in 2025, outperforming the global industry average of 1.54 as tracked by the Uptime Institute. The company also highlighted water efficiency metrics, reporting a water usage effectiveness of 0.018 liters per kWh at its Finland-1 data center, which it attributes to closed-loop liquid cooling and air-based free cooling systems that avoid water intake. These efficiency figures position Nebius favorably among its peers, though the company has yet to publish quantified targets for emissions reduction and resource use, stating that such targets are still being developed alongside its data infrastructure and governance processes.

The sustainability report pays particular attention to Nebius's partnership with fuel cell manufacturer Bloom Energy, signed in May. The companies agreed to deploy 328MW of behind-the-meter solid oxide fuel cell capacity at a US site, in a deal valued at up to $2.6 billion in service fees over ten years. According to previous reporting, the fuel cells were expected to replace gas turbines originally planned for the site. The report frames the fuel cells as "non-combustion generation" with "lower local pollutants, lower water use." However, while this characterization is technically accurate, the fuel cells are most likely to be powered via natural gas, which will still result in significant emissions. The arrangement highlights the complex trade-offs data center operators face as they seek to secure reliable, on-site power in an era of grid constraints and rising energy demand.

The emissions surge at Nebius reflects a broader industry challenge as AI infrastructure expands at unprecedented speed. Across the sector, data center operators are grappling with the tension between meeting surging compute demand and addressing environmental accountability. The company's decision to defer Scope 3 reporting and its lack of quantified reduction targets may draw scrutiny from investors and regulators increasingly focused on sustainability disclosures. As Nebius continues its expansion across the US, Middle East, and Europe, the company will need to balance its growth ambitions with the mounting pressure to demonstrate credible progress on emissions reduction.