The European Commission has presented a sustainability labeling system for data centers with more than 500 kW of installed capacity, as AI infrastructure adds to pressure on electricity grids and water resources. The labels are intended to make the environmental performance of major facilities easier to assess and compare.
- Energy-efficiency performance
- Water consumption
- The facility’s impact on water-stressed areas
- Potential to recover heat generated by servers
Data-center operators have already been asked to report some of this information, but early compliance was limited. Only around one-third of facilities submitted the requested data in the first year; the reporting rate has since risen above 50% as national authorities have become more involved in enforcement.
Waste-heat reuse is a major part of the Commission’s case for greater transparency. It estimates that recovered server heat could help provide heating for as many as 4 million homes across Europe.
The policy arrives as Europe’s data-center capacity is projected to rise from roughly 12 GW to 28 GW by 2030. Data centers used about 68 TWh of electricity in 2024, equivalent to 2.5% of the EU’s total consumption. That figure is expected to reach about 114 TWh by 2030, or more than 3.2% of the bloc’s electricity use.
The labeling system does not currently impose consumption caps. That is expected to change in 2027, when the Commission plans to introduce mandatory minimum performance standards. Technology companies are already seeking to influence how those criteria are defined, including metrics for water-use efficiency.
The broader industry is also pursuing voluntary grid-impact measures through an AI data-center alliance involving:
- NVIDIA
- Emerald AI
The alliance aims to reduce the pressure AI data centers place on power networks, but the EU’s forthcoming standards could make energy efficiency, water use and heat reuse formal requirements for future facilities. The key unresolved issue is how strict the 2027 performance thresholds will be.
