EU introduces common rating scheme and sustainability labels for data centres

 

Artificial intelligence and other data-intensive technologies are driving strong growth in data centres’ energy consumption. By 2030, data centres are expected to account for more than three percent of total EU electricity demand, double the share recorded in 2023.

This development not only puts pressure on electricity grids but also increases CO₂ emissions and requires considerable water resources. In its digital strategy, the Commission has therefore identified the need for highly energy-efficient data centres and more transparency regarding their environmental footprint.

On 21 September 2026, the European Commission proposed a Delegated Regulation establishing an EU-wide rating scheme for data centres. The initiative is designed to increase transparency on the use of energy and water by data centres.

1. Legal Framework

The legal basis for the new rating scheme lies in Articles 12(3) and 33(3) of the Energy Efficiency Directive (EU) 2023/1791, which empower the Commission to take further measures to promote sustainability in the data centre sector.

In March 2024, the Commission adopted Delegated Regulation (EU) 2024/1364. It introduced a reporting scheme for key performance indicators (KPIs) and established a European database for data centres. The current proposal builds directly on this first step.

2. Main Elements of the New Delegated Regulation

The core of the proposal is a common Union rating scheme for the sustainability of data centres in the EU. Building on the reporting scheme under Delegated Regulation (EU) 2024/1364, it aims to create a harmonised framework that provides reliable and comparable information on the environmental performance of data centres.

The rating will focus on two key metrics: Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE). These indicators measure, how efficiently a data centre uses energy and water in relation to its IT load. The intention is to enable meaningful comparisons between data centres. However, it does not cover the issue of (currently) under-used data centers, such as back-up data centers or data centers in the process of being moth-balled.

A central innovation is the introduction of electronic sustainability labels. These labels will be generated automatically based on the data and KPIs reported by operators. From 15 August 2027, the European database is expected to issue an updated label once a year for each reporting data centre and make it available electronically to the operator.

The label assigns grades from A to G for energy and water performance. It also provides an overview of the data centre’s energy sources and other sustainability features, such as whether the data centre offers demand-side flexibility to the grid or is ready for waste heat reuse. The reporting and labelling obligations will apply to data centres with an installed IT power demand of at least 500 kW.

3. Public Consultation on Minimum Performance Standards

In parallel to the proposal for the Delegated Regulation, the Commission has launched a public consultation on minimum performance standards for data centres in the EU. The consultation runs until 14 December 2026 and is intended to prepare a separate legislative proposal for a Regulation setting minimum standards for energy efficiency and sustainability.

With this step, the Commission is moving beyond transparency towards the possible introduction of legally binding standards. The consultation seeks input on whether such minimum standards are necessary, which parameters they should cover and how ambitious they should be. For data centres in Germany, the German Energy Efficiency Act already sets minimum PUE requirements taking effect for existing data centres in July 2027 and for new data centres after a two-year start-up period; meanwhile, a reform of the Energy Efficiency Act is also underway.

The consultation is likely to be of interest to data centre operators and owners, IT suppliers, network operators and energy service companies.

4. Practical Implications for Data Centres

According to the Commission, the proposal is not intended to create any additional administrative burden for Member States or operators. Since the label is based on data already reported, it will be created automatically.

Nevertheless, the proposal introduces a new transparency obligation. Under Article 4 of the draft, operators must make the electronic sustainability label available to any natural or legal person who requests it.

Although the label is primarily intended to increase transparency, it may have practical implications for data centre operators. A standardised A to G rating will make the environmental performance of data centres more visible and easier to compare for investors and business partners. In economic terms, the rating is therefore likely to have an increasing impact on financing conditions, company valuations in the context of transactions and the marketing of data centre capacity, so that well-rated data centres may gain competitive advantages, while lower-rated facilities may come under pressure to invest and modernise.

Operators and other stakeholders should consider participating in the ongoing consultation. The proposed minimum performance standards could have a more direct impact on operators than the rating scheme itself, as they may impose binding requirements on data centre performance.

5. Next Steps in the EU Procedure

Following its adoption by the Commission, the Delegated Regulation will be subject to a two‑month scrutiny period by the European Parliament and the Council, which may be extended by two months. During this period, the Parliament and the Council may object to the act but cannot amend its content.

If neither institution objects, the Delegated Regulation will be published in the Official Journal of the EU and enter into force 20 days after publication. Depending on the timing of the scrutiny process, entry into force could take place by the end of 2026.