ISKANDAR PUTERI: Johor will no longer approve Tier 1 and 2 data centres, which can use up to 50 million litres a day, enough to supply more than 300,000 households or meet the daily drinking needs of 25 million people.
State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor said the decision was part of new requirements governing data-centre development in the state.
The new rules, involving a review by 20 agencies, are now the most stringent and coordinated at state level in Malaysia.
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Tier 1 and Tier 2 data centres, categorised as high water users, consume about 200 times more water than Tier 3 and Tier 4 centres, which typically use 200,000 litres a day.
Data centres rely heavily on fresh water for cooling, leading to increasingly unsustainable consumption levels.
"We do not take decisions to approve data centres lightly," Jafni told the New Straits Times.
He said Johor would no longer entertain applications for Tier 1 and Tier 2 facilities, focusing instead on Tier 3 and Tier 4 projects, which offer higher value and lower environmental impact.
Approvals are handled by the Johor Data Centre Development Coordinating Committee, the first of its kind in the country, which brings together technical and non-technical federal and state agencies.
The committee reviews six key areas, including water and electricity usage, environmental impact, Water and Power Usage Effectiveness, the availability of fibre-optic infrastructure, cooling technologies that reduce water dependency, and alternative water sources.
It also assesses sustainability criteria such as green technology initiatives, carbon reduction and compliance with the Green Building Index, Jafni said.
He added that new applications would go through five levels of vetting under PlanMalaysia, covering screening, technical committee evaluation, a full state coordinating committee meeting, a state planning committee session, and final approval by the relevant local council.
"The bar has been lifted. We demand sustainability that benefits Johor's economy and Johoreans, not systems that drain them.
"The committee will not approve any data-centre applications that do not add value to Johor," he said.
As of November, Johor has approved 51 data-centre projects, cementing its position as one of the region's fastest-growing digital hubs.
Of these, 17 are operational, 11 are under construction, and 23 have received approval, representing total investments of RM182.96 billion and 7,561 high-skilled jobs for local youth.
Jafni, who chairs the committee, said the state is guiding investors towards advanced Tier 3 and Tier 4 facilities, which will only be allowed in designated industrial zones, not commercial areas.
"Digital growth cannot come at the cost of taps running dry for households. The future approval math is simple: high compute, low impact," he said.
Even where water is required, he said, data centres must use reclaimed water rather than supplies from Syarikat Air Johor.
"The move ensures data centres are located away from housing estates and commercial areas, avoiding negative impacts on nearby communities," he added.
Several Johor campuses have already begun using reclaimed water for cooling through reverse-osmosis systems modelled after Singapore's NEWater, in collaboration with Johor Special Water and Indah Water Konsortium.
