Kate Steele, Director, EMEA HPC/AI at Lenovo Infrastructure Solutions Group, explains why closed-loop liquid cooling and heat reuse could help data centres move beyond simply reducing their environmental impact.

93% of IT leaders in EMEA are planning to increase AI investments in the next year. With AI adoption accelerating at pace, infrastructure demands are rising fast, bringing energy use, cooling requirements and environmental impact into sharper focus.

While water consumption often dominates the sustainability debate, it tells only part of the story. Advances in data centre design are enabling organisations to move beyond reduction strategies towards more regenerative approaches. For CIOs, this represents an opportunity to rethink infrastructure, not just as a consumer of resources, but as a system that can operate efficiently and responsibly, and even contribute value back to surrounding communities.

Recirculating water

In the data centre, water use varies widely depending on cooling architecture. Traditional cooling systems can rely on significant volumes of water, continuously replenished as it evaporates. But modern, sealed liquid cooling systems operate differently.

Closed-loop liquid cooling is exactly that: closed. After initial filling, water loss is negligible under normal operating conditions. These systems are designed to continuously recirculate the same water within a sealed environment. There is no ongoing water consumption during normal operation. The water does not evaporate, nor is it routinely discharged. It simply circulates, absorbing heat directly from high-performance components and transferring it efficiently out of the system.

In a world increasingly concerned about water scarcity, this distinction matters. Closed-loop systems can help avoid competition with local communities, agriculture or ecosystems for freshwater resources. They are designed not as consumption-driven infrastructure, but as recirculating, self-contained systems.

Liquid cooling and thermal management

The role of smarter cooling technologies can also be crucial when it comes to water consumption. Liquid cooling captures heat directly at the source, at the processor level, rather than attempting to cool entire rooms of hot air. This targeted approach can improve efficiency, reduce the need for energy-intensive chillers and minimise reliance on evaporative cooling systems that consume water. This can ultimately lead to lower energy demand and less strain on local water systems.

By capturing heat directly at the source, rather than dispersing it into the air, liquid cooling can not only reduce cooling energy demand but also produce higher-temperature heat that is easier to reuse.

Importantly, reducing water use does not mean sacrificing performance. In many cases, advanced liquid cooling can support higher-density AI and HPC workloads more efficiently. By improving thermal management, organisations can scale AI ambitions while lowering both energy and water intensity.

But reducing water dependency is only half the story. The same liquid cooling systems that protect freshwater resources may also unlock a second sustainability opportunity: heat reuse.

Unlocking the value of waste heat

Once data centres embrace closed-loop and smart cooling systems, they can also begin to realise the potential benefit of recycling heat and using it to support the wider local community. Nearly all the electricity consumed by a data centre is ultimately converted into heat. Traditionally, that heat has been treated as a byproduct to be removed and discarded. But in a circular energy model, waste heat becomes an asset – captured, redirected and reused to serve other needs.

Instead of simply cooling and releasing it into the atmosphere, organisations can transform heat into a usable resource for district heating networks, commercial buildings and residential communities through heat exchangers and district heating integration.

Across Europe, a number of projects are already demonstrating what is possible. District heating schemes in Ireland and Scandinavia have harnessed data centre waste heat to warm homes and businesses, and major initiatives in Sweden aim to supply heating directly to residential properties. For communities, the implications are significant. Repurposed heat can reduce reliance on fossil fuels, lower municipal energy costs and strengthen local energy resilience.

Policy pressures and strategic opportunity

Europe’s regulatory landscape is increasingly recognising waste heat reuse as a sustainability imperative. Germany’s Energy Efficiency Act (EnEfG), for example, includes specific requirements on energy efficiency and reused energy in data centres. Such regulation is pushing operators to think beyond traditional cooling and consider reuse strategies as part of their decarbonisation roadmaps.

For CIOs, waste heat is not just a byproduct; it can be a strategic lever for ESG performance, cost efficiency and broader organisational value. It can also contribute to Scope 2 emissions reduction and help future-proof infrastructure investments. According to Lenovo research, 92% of IT decision-makers prioritise technology partners that reduce energy use and carbon footprint, yet only 46% believe their current data centre design supports sustainability goals. Reusing heat offers one way to bridge that gap, improving energy performance metrics beyond traditional measures such as Power Usage Effectiveness and contributing directly to community needs.

Successful integration of waste heat into municipal systems depends on technological conversion, collaborative planning, system design and digital oversight. When these elements align, theoretical sustainability becomes operational reality.

Designing for a sustainable future

As digital infrastructure continues to expand alongside AI-driven innovation, sustainability considerations will only become more critical. The challenge facing CIOs is no longer limited to reducing impact; it is about redefining how data centres interact with the resources around them.

By embracing closed-loop cooling and integrating heat reuse into broader energy ecosystems, organisations can align performance with responsibility. These approaches demonstrate that growth and sustainability do not have to be mutually exclusive. Instead, with the right design principles, data centres can evolve into efficient, circular systems that support both business objectives and environmental goals.