Malaysia’s palm oil industry could soon play an unexpected role in powering the country’s digital future. Instead of being used for food, cosmetics or biofuel, palm oil is now being developed into a specialised liquid that can cool powerful computer servers without consuming water.
Known as Sawit EcoTherm, the technology was developed by the Malaysian Palm Oil Board (MPOB) as Malaysia faces growing concerns over the amount of water and electricity required by its rapidly expanding data centre industry.
Turning Palm Oil Into A High-Tech Cooling Fluid
Sawit EcoTherm is a non-conductive immersion cooling fluid made from palm-derived materials.
Instead of using fans, air conditioning and water-based cooling towers, computer servers are placed directly into the liquid. The fluid absorbs heat from the server components and circulates within a closed-loop system.
“This technology replaces conventional air-and water-based cooling systems,” said Dr Noor Khairin Mohd, senior research officer at MPOB’s Advanced Oleochemical Technology Division.
“Instead of using cooling towers that consume large amounts of water through evaporation, server components are fully immersed in a non-conductive dielectric fluid that continuously removes heat in a closed-loop system.”
According to MPOB, Sawit EcoTherm has already been tested in an operational environment. A licensing agreement with a local manufacturer is also being finalised, bringing the technology closer to commercial use.
Data Centres Are Using Millions Of Litres Of Water
Malaysia’s growing position as a regional data centre hub has attracted billions of ringgit in investment. However, it has also created concerns about pressure on the country’s water and electricity supplies.
Between 2021 and the middle of 2025, the Malaysian Investment Development Authority approved 143 data centre and cloud computing projects worth US$35.23 billion, equivalent to approximately RM143 billion.
As of January, operational data centres were consuming around 28.68 million litres of water daily, according to the National Water Services Commission.
The demand could rise significantly as more facilities begin operating. MPOB estimates that a 100-megawatt data centre could consume between 1.7 million and 4.2 million litres of water every day.
Sawit EcoTherm could potentially eliminate the need for water in the server cooling process.
“If widely adopted, immersion cooling with Sawit EcoTherm could significantly reduce the water demand of the data centre industry,” Dr Noor Khairin said.
Built For Powerful AI Servers
The need for better cooling technology is becoming more urgent with the rapid development of artificial intelligence.
AI servers perform highly intensive computing tasks and generate significantly more heat than traditional servers. This makes ordinary air-conditioning and fan-based cooling systems increasingly expensive and inefficient.
“AI servers generate three to five times more heat than conventional servers,” Dr Noor Khairin explained.
“Therefore, immersion cooling can handle much higher heat loads than conventional air cooling, enabling higher computing density, improved energy efficiency and more reliable operation for next-generation AI infrastructure.”
By cooling the server components directly, Sawit EcoTherm could remove the need for individual server fans and reduce reliance on mechanical air conditioning.
MPOB estimates that the technology could reduce cooling-related energy consumption by around 30% to 50%. Lower electricity consumption could also help data centre operators reduce operational expenses and indirect carbon emissions.
Palm-Based Coolant Could Be Much Cheaper
Apart from saving water and energy, Sawit EcoTherm could offer a major cost advantage over conventional cooling fluids.
For a 100-megawatt data centre, MPOB estimates that palm-based coolant could cost between US$2.44 and US$6.10 per kilogram.
In comparison, synthetic and petroleum-based cooling alternatives may cost between US$12.20 and US$19.52 per kilogram.
Sawit EcoTherm is reportedly made from up to 95% renewable, palm-derived materials. It is also PFAS-free, readily biodegradable and designed to have low ecological toxicity.
PFAS are commonly known as “forever chemicals” because they break down very slowly and can remain in the environment for long periods.
“Sawit EcoTherm stands out because it combines high-performance cooling with sustainability and local resource advantages,” Dr Noor Khairin said.
Could This Create New Demand For Malaysian Palm Oil?
The development could open another high-value market for Malaysia’s palm oil and oleochemical industries.
Economist Professor Yeah Kim Leng, director of the Economic Studies Programme at Sunway University, said the technology could strengthen demand for palm oil and support industry pricing.
He also believes palm-based cooling fluid could help reduce pressure on the country’s freshwater resources.
“This can help alleviate pressures on freshwater resources and preserve supplies for essential uses, particularly drinking water,” he said.
However, experts warned that a product made from palm oil should not automatically be considered environmentally friendly.
Sustainability specialist Renard Siew said the technology’s full environmental impact must be studied, including the source of its raw materials, manufacturing process, transportation, performance and disposal.
“Adoption should therefore be linked to no deforestation commitments, traceable and certified feedstock, strong land-use safeguards, and preferably the use of existing responsible palm-based by-products rather than creating incremental demand for primary agricultural production,” he said.
Malaysia Could Lead The Next Generation Of Data Centre Cooling
Sawit EcoTherm could give Malaysia an opportunity to connect two of its most important industries: palm oil and digital infrastructure.
Before widespread adoption can happen, the technology will require more pilot projects, technical validation and cooperation involving MPOB, data centre operators, server manufacturers, cooling-system providers and government agencies.
“The priority is to build confidence among data centre operators through pilot projects, technical validation and demonstrations of the technology’s performance, reliability and long-term cost benefits,” Dr Noor Khairin said.
“By combining government support, industrial partnerships, and Malaysia’s strong oleochemical capabilities, Sawit EcoTherm has the potential to position Malaysia as a global leader in sustainable immersion cooling technology for next-generation AI data centres.”
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