Hayden Morgan, a specialist in sustainability at Pinsent Masons, was commenting on the Commission’s proposal (2 pages/86 KB PDF), designed to increase the transparency of data centres’ energy and water use, while supporting their integration into Europe’s energy system. The proposal forms part of a broader push to ensure that the growth of data centres, regarded as critical to Europe’s digital sovereignty ambitions, aligns with climate and energy objectives.
Under the proposed scheme, data centres with a capacity of more than 500 kilowatts (kW) would be rated against a range of sustainability-related criteria, including energy and water consumption, waste heat recovery, clean energy generation and their contribution to grid flexibility. The Commission said the framework is intended to provide greater transparency over operators’ use of resources and help foster a market for more sustainable digital infrastructure.
The proposal comes as the EU seeks to triple its data centre capacity over the next five to seven years. While increased computing power is viewed as essential to strengthening Europe’s technological independence and supporting the deployment of AI and other digital technologies, the Commission has warned that the sector’s growth could place increasing pressure on electricity networks, water resources and carbon reduction efforts.
Morgan said: “Although these proposals are not yet law, they provide a clear indication of the direction of travel. Policymakers are increasingly focused not only on the benefits of AI and digitalisation, but also on the physical infrastructure that makes them possible. For data centre operators and the major technology companies that rely on them, questions around energy efficiency, carbon intensity and grid integration are becoming strategic business issues rather than purely technical considerations.”
“The debate around AI’s environmental footprint has largely focused on the emissions associated with model training and computing power. However, the real challenge for organisations is demonstrating how rapidly expanding digital infrastructure can remain consistent with wider net zero commitments. A common rating framework could help bring much-needed transparency, but it will also increase scrutiny of performance”, he said.
The Commission has sought to present the scheme as both an environmental and energy system measure. According to its proposal, data centres that are able to adjust electricity consumption in response to grid conditions could help improve grid stability, lower overall system costs and support the integration of renewable energy sources. The Commission also highlighted the potential benefits of waste heat reuse, noting that recovering around half of the waste heat generated by European data centres could provide an amount of heat equivalent to the annual needs of four million households.
Morgan said: “Many organisations are now recognising that sustainability performance is becoming part of their licence to operate. Investors, regulators, customers and local communities increasingly want assurance that data centres are not simply consuming large volumes of electricity, but are contributing positively to energy system resilience and decarbonisation.”
However, the practical implications of the rating scheme could be significant for operators seeking to achieve stronger sustainability ratings, warned Morgan.
“The challenge for operators will be that measuring sustainability is far easier than improving it”, he said. “Organisations may find that achieving higher ratings requires significant investment in energy efficiency, renewable power procurement, waste heat recovery, cooling technologies and data collection systems. Those requirements could have material cost and operational implications.”
The initiative comes amid growing political and public debate over the energy demands associated with AI. The rapid development of generative AI technologies has driven increased demand for computing capacity, prompting renewed focus on the environmental impacts of the data centres that support those systems.
Morgan said: “The Commission’s proposed data centre rating scheme suggests that future discussions about AI competitiveness may become inseparable from debates about energy efficiency, electricity demand and carbon emissions.”
The proposed rating scheme will now enter a two-month scrutiny period during which the European Parliament and Council can object to the delegated regulation. If adopted, the first sustainability labels for individual data centres are expected to be displayed from 2027, with a review planned by the end of 2028. The Commission has also launched a consultation on potential minimum performance standards for data centres operating in Europe.
Morgan said: “The question is no longer whether AI will increase demand for data centre capacity; that is already happening. The challenge now is whether operators, technology companies and regulators can ensure that growth occurs in a way that is compatible with Europe’s energy transition objectives. These proposals represent an early attempt to address that challenge, but significant practical and commercial questions remain before any mandatory regime emerges.”