Ireland's Labour Party has called for a halt on data center development, along with a windfall tax on profits in the sector.

Party leader Ivana Bacik has warned that data center energy use is out of control, and repeated Labour's call for a temporary surcharge on data centers, to counteract the environmental cost of the sector.

Her statement follows the news that Ireland's government, led by Fine Gael's Leo Varadkar, is not planning to limit development, despite statistics showing data centers used 18 percent of all electricity used in Ireland in 2022.

“Labour has consistently called for a moratorium or a pause on new data centers until an analysis is carried out into the impact of these centers on infrastructure," said Bacik. “In Labour’s pre-Budget submission last September, we called for the introduction of a temporary surcharge levy on data centers to claw back some of the environmental cost. Yet, as usual, the Government refused to even entertain such reasonable proposals."

Bacik pointed to figures from the Central Statistics Office showing that data center power consumption in Ireland increased by 31 percent in a year.

“This trend shows no sign of abating. More than half (62 percent) of the country’s expected increase in electricity demand between 2021-2025 is set to come from extra-large energy users such as data centers. It’s unsustainable," she said.

“This is putting a massive and unsustainable strain on the State’s energy grid, electricity prices, and our climate emissions. The Minister for Environment has confirmed that an additional surcharge of €10 per MWh on data center electricity consumption within the State would raise nearly €40 million (based on 2021 figures). In all reality, the revenue generated would be even higher based on this year’s figures.

“We need to re-evaluate the State’s existing “open-door” strategy towards data centers especially given these centers are light on jobs, but heavy on environmental impacts.”

Responding to the statistics, Climate Minister Eamon Ryan said at the government's National Economic Dialogue this week: “The data centers are a really important, beneficial sector for our country. We have a huge advantage of having them here in terms of the potential industries that are based here that come with it."

Enterprise Minister Simon Coveney added that there is “no technology-based economic growth without data centers.”

Other Irish political parties, including the Social Democrats and People Before Profit, have previously called for a limit on data center development. But the Green party, which is currently in power via a coalition with Fianna Fáil and Fine Gael, is yet to make similar calls despite its environmental-focused election platform.