Malaysia’s palm oil research agency is advancing a bio-based immersion coolant for data centres as the country searches for ways to curb the heavy water and electricity demands created by its fast-growing artificial intelligence infrastructure.
The Malaysian Palm Oil Board has developed Sawit EcoTherm, a non-conductive dielectric fluid made largely from palm-derived materials that allows servers and other computing components to be immersed directly in coolant. The technology eliminates the need for conventional evaporative cooling towers and is being positioned for AI and hyperscale facilities where rising processor densities are producing substantially more heat.
Sawit EcoTherm remains at the pre-commercial stage, with pilot projects, technical validation and partnerships with data centre operators among the steps required before widespread deployment. Researchers say the fluid could reduce cooling-related energy consumption by about 30% to 50%, largely by removing server fans and transferring heat directly from electronic components.
MPOB estimates that conventional water-based cooling across Malaysia’s expanding data centre industry could eventually require as much as 876 million litres of water a day. Other projections based on currently identified developments are lower, illustrating the uncertainty surrounding future capacity and cooling configurations. Data centres planned across Selangor, Johor and Negeri Sembilan have been estimated to require more than 445 million litres daily if projected demand materialises.
The pressure is particularly acute in Johor, which has become one of Asia’s fastest-growing data centre clusters because of its proximity to Singapore, available industrial land and established power and connectivity infrastructure. Water availability and grid capacity have increasingly become constraints as developers seek to commission large AI facilities.
Malaysia’s data centre and cloud computing investment approvals reached RM144.4 billion between 2021 and the middle of 2025. Global technology and infrastructure groups including Microsoft, Amazon, Google, ByteDance, Equinix and AirTrunk have committed billions of dollars to expanding computing capacity in the country.
AirTrunk announced plans this year to invest about $3 billion in two additional hyperscale campuses in Johor, adding more than 280 megawatts of capacity. Equinix separately unveiled an investment exceeding $190 million for another Kuala Lumpur facility designed to support more than 2,200 cabinets and equipped for advanced liquid cooling.
Those developments are accelerating interest in alternatives to traditional air and water cooling. AI servers can generate several times more heat than conventional computing equipment, making direct liquid cooling and immersion systems increasingly attractive as rack power densities rise.
Sawit EcoTherm uses palm-derived ester formulations engineered to provide electrical insulation while absorbing heat from processors, memory, power supplies and graphics processing units. MPOB has developed two formulations, EcoTherm 5s and EcoTherm 8s, both with dielectric breakdown strength exceeding 75 kilovolts.
The fluids are designed for single-phase immersion systems, where coolant remains liquid while circulating through a closed loop. The 8s formulation has a minimum flash point of 200 degrees Celsius, while the 5s version has a minimum of 160 degrees. Their characteristics are intended to combine thermal performance with relatively low pumping requirements.
Palm-derived material can also offer a cost advantage. Commercial synthetic and petroleum-based immersion fluids can cost about RM50 to RM80 per kilogram, while the raw-material cost for producing the palm formulation has been estimated at roughly RM20 to RM25 per kilogram. Final commercial pricing has not been announced.
MPOB says up to 95% of the material used in Sawit EcoTherm can come from renewable bio-based sources. The formulations are biodegradable and free from PFAS, a class of persistent chemicals that has attracted growing regulatory scrutiny because of its resistance to environmental degradation.
The technology nevertheless carries broader sustainability questions because expansion of oil-palm cultivation has historically been associated with deforestation, biodiversity loss and pressure on wildlife habitats. The environmental case for palm-based coolant will therefore depend partly on traceable sourcing, lifecycle emissions and whether demand can be met without encouraging additional land conversion.
Immersion cooling itself is not new. Vegetable-derived, mineral-oil and synthetic dielectric fluids are already available, while many operators developing AI facilities favour direct-to-chip liquid cooling because it can be integrated into server architectures without fully submerging equipment. Commercial success for Sawit EcoTherm will depend on compatibility with hardware, long-term fluid stability, maintenance requirements and acceptance by server manufacturers.
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