Icelandic hosting company GreenQloud has launched what it claims is the world's first carbon-neutral cloud service. The company has teamed up with object-based cloud storage company Scality to launch the service, projected to be available early next year.

The cloud offering is entirely powered by renewable geothermal and hydropower energy to ensure that it was wholly carbon neutral and will appeal to many customers who are interested in being very environmentally conscious, said Eiríkur Hrafnsson, GreenQloud's CEO and co-founder. "It's becoming important for IT to go on a sustainable path."

"We're lining up beta users right now," said Hrafnsson, "we already have a range of customers interested in the service. We're also talking to a number of potential partners ranging from high-performance computing suppliers to working with companies who do off-site backups. And from the consumer point of view, we're also talking to network drive providers."

He said that the service would be aimed at a variety of customers. "It will be aimed at businesses and for consumers, we're building a web interface on top of it."

The service will be compatible with the cloud service offered by Amazon said Hrafnsson. "We're going to be providing a real alternative to Amazon – we offer the same APIs as Amazon, so people can work with us easily. And we will be price competitive with Amazon and our location makes our S3 service cheaper for those who want to serve both Europe and North America because you only need one location/region for both."

Hrafnsson said that being based in Iceland away from the European mainstream had not harmed the company. "There's plenty of interest in us. We're have multi-terabit links to Denmark, England and Canada so speed of connection is not a problem."