EU proposes appliance-style energy labels for data centers

The European Commission on Monday proposed a mandatory rating scheme requiring data centers across Europe to disclose how efficiently they use energy and water, as the bloc seeks to rapidly expand its computing capacity without overwhelming power grids and water supplies.rte+1

A to G, Like Your Fridge

The proposal would require operators of data centers with an installed IT power demand of at least 500 kW to participate in an EU-designed labelling system that ranks facilities on a colored scale from A (most efficient) to G (least efficient), similar to the energy labels already used for household appliances. The labels will measure two core metrics: Power Usage Effectiveness and Water Usage Effectiveness.sustainablefutures.linklaters+1

Data centers would also have to disclose information about the relationship between their water consumption and local water stress levels, as well as whether they can offer services to the energy grid, such as reusing waste heat, according to Reuters ↗ 2.92%. The scheme would not impose caps on energy or water use, nor require operators to reveal their total power consumption.reuters

The labels will be generated automatically by an EU database based on companies' existing reporting obligations, with the first labels expected to appear in 2027. EU countries and lawmakers have two months to object to the rules, or they will enter into force.rte+2

Balancing AI Ambitions With Sustainability

The initiative comes as the EU aims to triple its data center capacity over the next seven years to support artificial intelligence development and reduce reliance on US technology companies. Data centers currently account for around 2.5% of EU electricity consumption, a share expected to rise as capacity more than doubles to 28 gigawatts by 2030 from 12 GW last year.reuters

The Commission has signaled that the labelling scheme could serve as a precursor to mandatory minimum performance standards for data centers' water and energy efficiency, which are already under development. A public consultation on the draft regulation earlier this year drew input from stakeholders ahead of the formal proposal.energy.europa+3

A Step Toward Carbon-Neutral Data Centers

The regulation forms part of a broader EU push to achieve carbon-neutral data centers by 2030. RTÉ reported that the scheme was designed in part to pre-empt public discontent over the environmental footprint of the facilities as the bloc races to build out computing infrastructure. Defense and civil protection data centers would be exempt from the requirements, while smaller facilities could participate voluntarily.whitecase+3