EU proposes new energy and water ratings for data centres

The European Commission has proposed an EU-wide rating system for data centres requiring facilities above 500kW to disclose energy and water efficiency as the bloc prepares for a major expansion in computing capacity.

The scheme will require operators to report how efficiently their facilities use energy and water, alongside information on water stress in the local area. Operators will also have to disclose whether their sites can support the energy system through measures such as waste heat reuse and flexible electricity consumption.

Teresa Ribera, European Commission executive vice-president for clean, just and competitive transition, said: “Tripling our data centre capacity cannot mean tripling the pressure on our grids, our water and our energy bills.”

The Commission wants to triple European data centre capacity over the next five to seven years as it seeks to increase computing capacity and strengthen technological independence. It said the expansion, driven in part by artificial intelligence, could increase pressure on electricity grids and water resources while contributing to higher carbon emissions.

The rating scheme will not impose limits on data centres’ energy or water consumption, nor require operators to disclose their total power use. Instead, the Commission intends the ratings to increase transparency and encourage investment in facilities that use resources more efficiently.

The European Commission said data centres consumed around 68 TWh of electricity across the EU in 2024, with demand expected to reach 114 TWh by 2030. That would represent more than 3 per cent of total EU electricity demand, according to figures cited from the International Energy Agency.

The Commission said the system could encourage facilities to provide services to electricity grids, including waste heat reuse, additional clean energy generation and demand flexibility. It said reusing around half of European data centres’ waste heat could provide the equivalent of the total heating demand of four million households.

Dan Jørgensen, European Commissioner for energy and housing, said: “Digital sovereignty must go hand in hand with energy responsibility.”

The proposed delegated regulation will now enter a two-month scrutiny period involving the European Parliament and the Council. The first sustainability labels for individual data centres are expected to be displayed in 2027, with a review of the scheme planned by the end of 2028.

The Commission has separately launched a 12-week consultation on potential minimum energy performance standards for data centres, with submissions closing on 14 December 2026. It plans to use the consultation to prepare a legislative proposal expected in the second quarter of 2027.