A growing number of data center operators are commissioning transcritical CO2 (R744) and ammonia-based cooling systems as tightening refrigerant regulations and rising rack heat densities push legacy HFC technology toward obsolescence. Deployments across Europe and North America signal early-stage market adoption, while a U.S. compliance deadline of January 1, 2027 is forcing procurement decisions now.
Regulatory Background
The EPA's Technology Transitions Rule, enacted under the 2020 American Innovation and Manufacturing (AIM) Act, sets a 700 GWP limit for new data center, computer room air-conditioning, and IT equipment cooling systems effective January 1, 2027. In parallel, the European Union updated its F-Gas Regulation in March 2024, building on earlier rules to reduce fluorinated gas emissions through a quota system and product bans. The updated EU regulation bans fluorinated gases with a GWP of 750 or above in chillers over 12 kW starting in 2027.
Alongside technology transition mandates, the EPA finalized its Emissions Reduction and Reclamation (ER&R) program in 2024. The ER&R program requires:
- Repairing leaking equipment
- Installing and using automatic leak detection systems on large refrigeration systems
- Using reclaimed HFCs to service certain existing equipment
- Removing HFCs from disposable cylinders before disposal
Systems containing 1,500 pounds or more of refrigerant, and those with 15 or more pounds of refrigerants with a GWP above 53, are now covered. For data center operators running large chiller plants, these reclamation and leak detection obligations add a new administrative and capital cost layer on top of the equipment transition itself.
HFCs such as R-134a and R-410A, mainstays in many data center cooling systems, carry global warming potentials thousands of times greater than CO₂. As the most concerning greenhouse gases in common use, HFCs face a series of regulations now in process that will restrict both users' and manufacturers' ability to continue relying on HFC-based refrigerants.1Haber-Bosch to hyperscale: Ammonia-to-power in the data center - DCD
Pilot Deployments and System Performance
Advansor has commissioned a 1.3 MW (369 TR) transcritical CO2-based cooling system for a new data center in Valencia, Spain - the first in the country to rely solely on natural refrigerants, according to the company. Italian heat exchanger manufacturer LU-VE Group also supplied evaporators for a 1.5 MW (426.5 TR) transcritical CO2 system cooling a 1,000 m² data center in Paterna, Spain, which LU-VE described as "among the earliest in the world" to use CO2 natural refrigerant at large-data-center scale. In that project, CO2 systems integrated with geothermal fields in the Valencian region cool data center equipment while supplying recovered waste heat to the local district heating network.
On the ammonia side, Zudek built its first ammonia (R717) chiller for a data center in South Africa in 2013 and has since supplied chillers for four additional data centers, two in Germany - one with a 700 kW cooling capacity and another with a 6 MW (1,706 TR) capacity. Ammonia remains uncommon in data center cooling, and Zudek acknowledges persistent market caution; its chillers feature low refrigerant charges and advanced safety systems.
CO2's thermodynamic properties offer a structural advantage in high-density environments. Its volumetric cooling capacity is four to five times greater than most other refrigerants, enabling smaller compressors and components, less refrigerant, and a reduced equipment footprint. However, performance under warm ambient conditions remains a documented engineering challenge. In environments where temperatures consistently reach or exceed 88°F, CO2 refrigerant systems must be paired with adiabatic gas cooling to mitigate performance losses when operating in the transcritical range - the point at which the condenser becomes a gas cooler.
Research published in January 2025 in Applied Thermal Engineering (ScienceDirect) proposed a compression/ejection configuration to address this efficiency gap. Compared to a standard transcritical CO2 system with an internal heat exchanger, the proposed architecture achieved an average 39.90% increase in cooling coefficient of performance.
Market Trajectory and Procurement Considerations
Global data center capacity is expected to nearly double, from 103 GW to 200 GW by 2030, according to ATMOsphere's Clean Cooling for Data Centers 2025 report. This surge is intensifying thermal management challenges as server rack densities exceed 100 kW - far beyond the effective range of conventional air cooling.
Approximately 1,240 industrial facilities in North America were using transcritical CO2 systems in 2025, reflecting 42% year-over-year growth and a 2.5-fold increase since 2023, according to data collected by ATMOsphere. New builds accounted for 74% of industrial transcritical CO2 rack installations in North America in 2025, versus 26% for retrofits. Approximately 1,480 industrial facilities have adopted low-charge ammonia systems, reflecting year-over-year growth of 20% and a 1.4-fold increase since 2023.
The global transcritical CO2 market was valued at US$54.15 billion in 2024 and is projected to reach US$156.99 billion by 2031, registering a CAGR of 16.8% during 2025-2031, according to The Insight Partners.
For procurement engineers and facility managers, system selection involves navigating significant trade-offs. While CO2, propane (R290), and ammonia (R717) chillers and CO2 CRAC units are all in use in data centers, they currently represent only a small fraction of the sector's overall cooling equipment. Tens of thousands of technicians lack training in high-pressure CO2 and mildly flammable refrigerant categories, compounding deployment risk for operators without established service infrastructure.
Outlook
A proposed EPA rule, expected to be finalized in mid-2026, would adjust GWP thresholds for retail food systems and delay the compliance deadline for certain categories from January 1, 2027 to January 1, 2032. The data center sector's own January 2027 deadline is not currently subject to that proposed reconsideration. EU laws now mandate heat reuse, PUE targets, and phase-out of high-GWP refrigerants, leaving European hyperscale operators with less flexibility. Operators that defer refrigerant strategy decisions risk exposure to both regulatory non-compliance and tightening HFC supply, as legacy equipment dependent on phased-out HFC blends faces growing sourcing and servicing challenges - and reduced HFC availability will drive up refrigerant pricing.
