EU Proposes Mandatory Sustainability Disclosures for High-Capacity Data Centers

European Union regulators have proposed draft rules requiring data center operators within the bloc to disclose their energy and water usage through a standardized sustainability rating system.

The proposed disclosure rules apply to facilities operating with an installed capacity above 500 kilowatts, according to the European Commission. The policy initiative arrives as the EU plans to triple its regional data center capacity over the next seven years to strengthen digital sovereignty and curb reliance on US technology providers. European officials acknowledge that expanding compute infrastructure at this rate risks straining power grids, drawing heavily on local water supplies, and raising carbon emissions.

Figures cited by the Commission from the International Energy Agency indicate data centers consumed 68 terawatt-hours of electricity across the EU in 2024. Driven in large part by compute demand for artificial intelligence, annual power usage is forecast to reach 114 terawatt-hours by 2030, which would account for more than 3% of the bloc's total electricity consumption.

In a statement detailing the plan, the Commission stated that limiting resource impact requires facilities to be "highly energy- and water-efficient and sustainably integrated in the energy system."

As reported by Engadget (https://www.engadget.com/2264607/the-eu-will-force-data-centers-to-disclose-their-energy-and-water-use/), the rating scheme will not place immediate limits on aggregate water or power consumption or require operators to disclose total power draw. However, companies will need to publish details on how their water usage affects local water stress levels and disclose whether they feed energy back into the local system by repurposing waste heat.

The disclosure system—structured similarly to energy efficiency labels on consumer appliances and vehicles—is intended to help the EU establish binding minimum performance standards for data centers in the future.

The draft regulation has entered a two-month consultation period for review and potential objections by the European Parliament and Council. If approved, data center operators across the bloc are expected to begin publishing the sustainability labels next year.