The European Commission has proposed a rating system for data centers based on their use of electricity and water as the continent seeks to triple its AI computing capacity.
The system would cover individual data centers with more than 500 kilowatts of capacity and assess factors including energy and water efficiency, renewable-energy use, local water conditions and whether facilities reuse waste heat or provide flexibility to the electrical grid.
Sustainability labels for data centers are expected to be displayed starting in 2027, the Commission said.
The European Union wants to expand its data-center capacity over the next five to seven years as it seeks greater technological independence and more computing power for AI. The Commission – the executive arm of the EU – said that expansion could increase pressure on electricity grids, water supplies and carbon emissions unless facilities become more efficient.
But if properly designed, data centers can yield some benefits. For example, reusing just half of waste heat from data centers is enough to heat four million homes in Europe, according to the Commission. Waste heat is the heat produced from running machines and other equipment.
Data centers used 68 terawatt-hours of the EU’s electricity in 2024 and is expected to double consumption by 2030 – that’s more than 3% of all electricity demand in Europe. (One terawatt-hour is equivalent to a billion kilowatt-hours.)
The proposed rating system does not impose limits on how much electricity or water individual facilities can consume, according to Reuters.
More stringent rules could follow. The Commission separately launched a 12-week consultation on possible minimum performance standards for European data centers, with a legislative proposal planned for the second quarter of 2027.
The initiative reflects the growing tension surrounding AI infrastructure: Governments want significantly more computing capacity while also confronting the electricity, water and grid demands created by the facilities that provide it.