Cold and data centres drive up US greenhouse gas emissions

A confluence of unusually severe winter weather in early 2025 and the escalating energy demands of burgeoning data centres and cryptocurrency operations collectively propelled US emissions of planet-warming gases upwards for the first time in three years, according to a comprehensive new analysis. This unexpected reversal underscores the complex challenges facing the nation’s decarbonisation efforts, as residential heating needs surged and the industrial appetite for electricity intensified.

Last year, American households significantly increased their consumption of natural gas for heating purposes, while the broader electricity sector witnessed a striking 13% surge in the use of coal to meet the escalating power demands. Although the solar power sector simultaneously experienced robust growth, contributing a record amount of clean energy to the grid, the overall effect was a 2.4% increase in greenhouse gas emissions after two consecutive years of decline. This rise, as estimated by the Rhodium Group, regrettably outpaced the country’s economic growth, indicating a decoupling from efficiency gains that had been observed in prior periods. The authors of the report cautiously suggest that the climate policies enacted or proposed by the Trump administration did not yet exert a "meaningful impact" on the 2025 emissions figures, though they anticipate these policies could influence trends in the coming years.

The severe cold snap that gripped large swathes of the United States in the initial months of 2025 played a critical role in this emissions uptick. In many of the colder regions, homes are predominantly reliant on natural gas, heating oil, and other fossil fuels for their primary heating needs. The sustained period of exceptionally low temperatures drove residential and commercial consumption of these fuels up by nearly 7% compared to the previous year. This substantial increase in demand for direct fossil fuel combustion for heating directly translated into higher greenhouse gas releases, highlighting the vulnerability of the energy system to climatic fluctuations and the continued dependence on carbon-intensive energy sources for essential services.

Compounding the effects of the harsh winter was the explosive growth of energy-intensive industries, particularly the boom in data centres and cryptocurrency mining operations. These digital infrastructure behemoths, concentrated in regions like Texas and the Ohio Valley, require immense and continuous supplies of electricity to power their vast server farms and sophisticated cooling systems. Cryptocurrency mining, in particular, is notorious for its voracious energy appetite, as complex computational puzzles must be solved to validate transactions, a process known as "proof-of-work" that consumes prodigious amounts of power. The rapid expansion of these sectors placed unprecedented strain on the national electricity grid, necessitating a significant increase in generation capacity.

The convergence of rising heating demand from the cold weather and the insatiable power requirements of the digital economy, combined with persistently higher natural gas prices, created a perfect storm that precipitated a 13% surge in US coal use last year. This marked a stark departure from the long-term trend of coal’s decline in the US and stood in sharp contrast to global developments. For instance, both India and China, traditionally major coal consumers, recorded decreases in coal use for electricity generation—3% and 1.6% respectively—as they successfully integrated record amounts of new wind and solar energy into their grids, according to an analysis by Carbon Brief. This divergence underscores differing national energy transition trajectories and the unique challenges faced by the US grid.

Michael Gaffney, the lead author of the Rhodium Group report, explained the dynamic: "The grid decided to meet that additional load this year, in part with renewables, in part with fossil but because of higher natural gas prices, there was some fuel switching that saw marginally more coal than there was in 2024." This "fuel switching" phenomenon occurs when power generators opt for the most economically viable fuel source. When natural gas prices rise significantly, coal, despite its higher carbon intensity, can become a more attractive option, especially for older, amortized coal plants that might otherwise be slated for retirement.

Other energy observers have closely linked the elevated natural gas prices in the US to the continuing large-scale exports of liquefied natural gas (LNG) to international markets. Jesse Lee, from Climate Power, a prominent US-based environmental advocacy group, articulated this connection: "Higher natural gas prices means that finally, coal, which had been kind of driven to extinction by low natural gas prices, well [gas is] now so expensive that coal’s worthwhile again. And that’s what is allowing coal to make this comeback." This perspective suggests that global energy market dynamics, influenced by US export policies, are inadvertently creating conditions favourable for a domestic coal resurgence.

Since 2007, coal power generation in the US had witnessed a dramatic decline, shrinking by an impressive 64%. The 2025 increase marks only the second such rise in the last decade, interrupting a sustained trajectory towards decarbonisation of the electricity sector. Furthermore, last year also saw a noticeable slowdown in the rate of coal plant retirements, as electricity companies opted to delay planned closures to ensure sufficient capacity to meet the surging demands. This raises a critical question: Is 2025 merely an anomaly, or does it signal the start of a more sustained revival of coal? Michael Gaffney’s assessment leans towards the latter, stating, "It’s more than just a blip. This is a response to the demand growth in the sector, a lot of it is coming from data centres, cryptocurrency operations, other large load customers, and that demand growth is here to stay." This suggests that without significant policy interventions or rapid scaling of clean energy solutions, these new demand drivers could continue to stress the grid and potentially lead to further reliance on fossil fuels.

Despite the overall rise in emissions, the US solar power sector experienced a significant growth spurt last year, expanding by an impressive 34%. This represents the fastest rate of solar deployment since 2017, underscoring the considerable momentum behind renewable energy development. This growth, however, was not enough to offset the increased emissions from other sectors, highlighting the scale of the challenge in transitioning away from fossil fuels while accommodating new energy-intensive demands.

The transport sector in the US, encompassing road, rail, and air travel, continues to be the single largest source of warming gases. Road traffic volumes, in particular, increased for the fifth consecutive year, reflecting a growing population and economic activity. However, emissions from this sector remained virtually flat in 2025, a testament to the increasing adoption of hybrid and electric vehicles (EVs) on American roads. Hybrids, in particular, demonstrated robust growth, with sales up 25% compared to 2024, indicating a strong consumer preference for more fuel-efficient options, even if not fully electric. This trend offers a glimmer of hope for future emissions reductions, provided the pace of vehicle electrification accelerates further.

While President Trump has vociferously articulated his determination to roll back the climate-related policies of his predecessor and to aggressively boost US extraction and use of fossil fuels, the Rhodium analysts who conducted this report concluded that these specific policy shifts had little discernible impact on the 2025 emissions figures. However, this view is not universally shared. Jesse Lee of Climate Power offers a nuanced counter-argument: "There is a data centre explosion, that is somewhat independent of Trump. You could argue maybe his policies haven’t all kicked in full blast yet, but I don’t think you can really divorce his natural gas exports and his blind support of AI and data centres from this dynamic that’s driving up emissions." Lee’s perspective suggests that while the direct effects of policy changes might take time to manifest, the broader political and economic environment fostered by an administration can significantly influence energy trends, especially regarding fossil fuel exports and the encouragement of energy-intensive industries without corresponding clean energy mandates. The intricate interplay of weather, technology, economics, and policy will continue to shape the US emissions trajectory in the years to come, making the path to climate goals increasingly complex.