REPORT Alibaba Cloud’s Carbon Benefits A study on enabling effects of Alibaba’s internet data centres 15 August 2022 Carbon Trust | Alibaba Cloud’s Carbon Benefits ABOUT THE REPORT Acknowledgments The Carbon Trust authored this report based on an impartial analysis of primary and secondary sources. This report was commissioned by Alibaba Cloud. For the avoidance of doubt, this report expresses independent views of the authors. About the Carbon Trust We are a trusted, expert guide to Net Zero, bringing purpose led, vital expertise from the climate change frontline. We have been pioneering decarbonisation for more than 20 years for businesses, governments and organisations around the world. We draw on the experience of over 300 experts internationally, accelerating progress and providing solutions to this existential crisis. We have supported over 3,000 organisations in 50 countries with their climate action planning, collaborating with 150+ partners in setting science-based targets, and supporting cities across 5 continents on the journey to Net Zero. The Carbon Trust’s mission is to accelerate the move to a decarbonised future. Carbon Trust | Alibaba Cloud’s Carbon Benefits Authors: Tina Tingyu He Senior Associate tina.he@carbontrust.com Roman Ziqing Chen Senior Analyst roman.chen@carbontrust.com Ruiheng Jin Analyst ruiheng.jin@carbontrust.com With additional technical support from Beatriz Fialho da Silva, Veronika Thieme, and Matt Anderson. Contents Contents .............................................................................................................................. 1 EXECUTIVE SUMMARY ...................................................................................................... 4 1. INTRODUCTION............................................................................................................... 6 1.1. Data centres’ energy consumption is on the rise and faces steep challenges for decarbonisation.................................................................................................... 6 1.2. Cloud computing data centres can offer significant benefits in cutting down energy use and consequently greenhouse gas emissions. .................................... 7 1.3. This study aims to improve the understanding of the carbon abatement Alibaba Cloud can enable for its customers compared to on-premise equivalents. 8 1.4. Limitations of study ............................................................................................ 8 2. METHODOLOGY.............................................................................................................. 9 2.1. This study aligns with the established Scope 3+ Emissions Reduction: A New Methodology for Corporate Climate Actions Beyond Value Chains and The Avoided Emissions Framework when calculate Alibaba Cloud’s carbon benefits.9 2.2. A lifecycle approach was applied to estimate Alibaba Cloud’s data centres’ carbon footprint, covering upstream, use phase, and downstream emissions. ..11 3. FINDINGS ....................................................................................................................... 13 3.1. China-based internal data centres are estimated to emit as much as 6.6 times more than Alibaba IDCs, all else being equal. ........................................................13 3.2. Largest carbon savings come from the use phase, followed by those in the upstream; low-carbon electricity procurement is expected to further increase Alibaba Cloud’s carbon saving potential. ...............................................................13 Appendix 1: Comparison with Other Scenarios.............................................................. 15 Appendix 2: Further Notes on the Methodology ............................................................. 17 Modelling approach to use phase emissions .........................................................17 Modelling approach to upstream emissions ...........................................................21 Modelling approach to downstream emissions ......................................................22 Appendix 3: Data Quality .................................................................................................. 24 1 Tables Table 1: Overview of the AWS and Microsoft studies .................................................... 11 Table 2: Alibaba Cloud's emission boundary summary ................................................. 12