Rail-connected warehousing vs. data centres: planning for carbon, jobs and our future economy
On 15 August 2025, the BBC reported that data centres are to be expanded across the UK “as concerns mount.” Nearly 500 exist now, with a further 100 in planning for the next five years, including proposals in Blyth for an AI data centre of nearly 6m sq.ft over 10 buildings.
That phrase, “concerns mount”, felt familiar. Because we are not only debating data centres. We are also wrestling with the future of rail-connected interchanges and warehousing. Both sectors are trying to convince communities, planners and ministers that their scale, visual footprint, and disruption will be worth it.
The truth is, we need both. But we must be clear-eyed about what each delivers—and what they ask of our land, power system, and economy.
The carbon leverage of rail logistics
In a net-zero era, the case for rail-connected logistics sites and warehousing is almost embarrassingly straightforward. The National Networks National Policy Statement (NNNPS) published in 2024 reinforced that rail freight emits 76% less CO₂ per tonne than road haulage, and sets a target of 75% growth by 2050.
A single freight train can remove up to 76 lorries from the roads. At SEGRO’s East Midlands Gateway, the intermodal terminal is designed to handle sixteen 775-metre trains a day—a clear case of mode shift at scale.
Yet public debates rarely focus on these climate dividends. Instead, SRFIs are often dismissed as “big sheds” intruding on the countryside.
Scale and the planning weigh-up
Yes, SRFIs are large and visually prominent—but the planning system weighs benefits against trade-offs. The West Midlands Interchange won approval—even on the Green Belt—on the basis of its national role, including 8,500 jobs over ten years. The Hinckley National RFI, by contrast, was refused on highways and safety grounds.
This is not a free pass. The NNNPS requires environmental sensitivity—landscaping, biodiversity, community care—to be built-in, not tacked on.
Jobs, skills, and future workers
Jobs are the easiest argument for politicians—and here, logistics quietly outpaces. East Midlands Gateway is expected to generate 9,000+ permanent roles, plus thousands of construction posts.
Beyond numbers, SRFIs offer a chance to rewrite perceptions about logistics careers. The Generation Logistics initiative—backed by government and industry, with the Rail Freight Group as a partner—promotes logistics as a meaningful career path for the young. By tying SRFI projects into a national skills pipeline, the sector is investing not just in jobs, but in delivering social capital to local communities.
Meanwhile, data centres, though capital-dense, deliver fewer long-term roles. The Northumberland campus, for example, involves £10 bn of capex, about 1,200 construction jobs, but just “hundreds” of ongoing positions. As the Financial Times has cautioned, the employment story often gets overstated.
This doesn’t make data centres unimportant—they are critical—but it does mean the job story cannot be treated as equivalent.
Energy demand as a new battleground
The crunch for data centres is increasingly about power rather than land.
Future Energy Scenarios 2025 puts current UK demand at ~7.6 TWh (2.4 GW connected), with forecasts ranging from 30–71 TWh by 2050. In West London, grid strain caused data-centre sprawl to delay housing. Globally, the IEA expects data-centre energy use to double by 2030.
SRFIs, by contrast, are carbon-reducing by design—but they are not power-neutral. As the decarbonisation of road freight accelerates, distribution fleets serving SRFIs will need high-capacity charging infrastructure for electric or hydrogen-fuelled HGVs. That will inevitably increase power demand at logistics parks, compounding the challenge of aligning freight decarbonisation with grid capacity.
Not all digital (power) demand is equal
Another uncomfortable truth: not all digital demand is equally valuable.
Sandvine’s 2024 report shows video makes up ~38% of internet traffic, with streaming dominant. Ofcom’s Online Nation 2024 finds hours disappear into TikTok, YouTube, Snapchat.
Of course, AI models that aid healthcare, research or financial systems are vital. But much capacity serves convenience or passive scrolling—“Alexa, change the radio”—not just economic or productive benefit. This duality doesn’t devalue data centres, but it demands realism when allocating scarce grid capacity and land. In the interest of balance, similar arguments might be made of the true value to the UK of our transport systems satisfying consumer demand for cheap, single-use clothing or disposable tat.
But the point is, does the Government properly consider how much of that energy use is flowing back to genuine benefits to the UK economy? Pertinent as we simultaneously struggle to get sufficient power into the OLE on the railway to support greater electric traction.
A hierarchy worth upholding
Here’s what we ought to be saying now:
- SRFIs deliver carbon savings today—shifting freight from road to rail and delivering jobs across communities and through initiatives like Generation Logistics.
- Data centres underpin the digital economy tomorrow—but with high energy demands, modest jobs, and some questionable end-uses.
- Return-on-investment differs—rail-based logistics pay back in tonnes of social and environmental benefits – avoided emissions, decongestion on the roads, jobs and skills uptake; data centres pay back in computation capability and underpinning the digital economy.
Britain needs both—but on different terms. Carbon first. Power-aware planning second. Honest economics throughout. That hierarchy should help guide how we approve—and narrate—these mammoth projects.
By Martin Bignell, Scottish and Northern representative, Rail Freight Group