The European Commission has taken its first concrete step toward regulating the environmental footprint of data centres, unveiling a voluntary sustainability rating scheme on Monday. The label, which will apply to facilities with more than 500 kW of installed capacity, is designed to make energy and water consumption more transparent across the bloc's rapidly expanding digital infrastructure.
According to the Commission, the rating scheme aims to "increase transparency about the energy use of data centres" and to inform both policymaking and procurement of more sustainable digital assets. The move comes as Brussels pushes to triple data centre capacity by 2035, a goal central to reducing Europe's reliance on non-European cloud providers and building homegrown AI capabilities.
Yet the new rules stop short of imposing hard ceilings on energy or water use. Binding minimum performance standards will not be introduced until 2027, a timeline that gives the industry a window to influence the final parameters. Microsoft, for instance, submitted comments to the German federal government in July 2026, supporting clean power and efficiency metrics while requesting changes to the proposed water-efficiency bands, according to Germany's lobby register.
Patchy compliance and growing demand
The Commission acknowledges that reporting under the existing energy efficiency directive has been incomplete. A senior official, speaking anonymously, told reporters that in the first year only about one-third of eligible data centres reported their data. Compliance improved in subsequent years, with the official estimating that the bloc is now "hitting the 50% mark easily." Enforcement, however, rests largely with member states, and the real test will come early next year when the first full compliance cycle concludes.
The stakes are considerable. In 2024, European data centres consumed 68 terawatt-hours (TWh) of electricity, a figure the Commission projects will rise to 114 TWh by 2030, representing 3.2% of the bloc's total electricity use, up from 2.5% today. This surge is already straining local power grids and water supplies, and has sparked opposition from communities in Ireland, the Netherlands, and Germany, where new facilities have been contested over their environmental impact.
The sustainability label will compare facilities on energy and water efficiency, as well as the source of their electricity, including whether it comes from low-carbon sources such as nuclear. The Commission says the label will help operators and procurers make more informed choices, but critics argue that its voluntary nature and the inclusion of a confidentiality clause undermine its credibility.
Bram Vranken, a researcher at the Corporate Europe Observatory, told Euronews that the rewritten confidentiality clause remains "hugely problematic," as it will make much of the information in the label impossible to verify. He warned that a data centre could score well on energy efficiency while consuming an undisclosed gigawatt of power without proper disclosure.
The tension between the EU's ambition to become a "leading AI continent" and its reliance on US tech giants to build that infrastructure is palpable. The Commission's rules reflect a desire to regulate, but also a need to attract investment from companies like Microsoft, Google, and Amazon, which are expected to fund much of the new capacity.
As Europe grapples with an energy crisis that has already boosted far-right parties and prompted discussions on windfall taxes, the data centre expansion adds another layer of complexity. The Commission insists that the new label is a first step, and that the 2027 minimum standards will eventually become mandatory, providing a floor for efficiency that new facilities must meet.
For now, the industry has a "probation time" to shape those standards. Whether the final rules will be stringent enough to meet Europe's climate goals remains an open question, as does the bloc's ability to enforce them across its 27 member states.
