European Union
The rapid expansion of AI, cloud computing, and digital services is driving a surge in data centre construction across the European Union. These facilities fuel everything from streaming platforms to advanced AI training, but their continuous and intensive energy consumption requireds could threaten the EU’s energy and sustainability strategies.
Under the EU Energy Efficiency Directive (EU) 2023/1791, in force since October 2023, owners and operators of data centres with an installed IT power demand of at least 500 kW are required to build various sustainability-related information publicly available. Building on this, the Commission adopted Delegated Regulation (EU) 2024/1364 as the first step towards establishing an EU-wide scheme to rate the sustainability of data centres.
Under this act, data centre operators are required to submit annual reports to the European database on key performance indicators (KPIs) such as energy demand and consumption, total water utilize, waste-heat reutilize, cooling systems, renewable energy share, and data traffic, with initial deadlines of September 15, 2024 and May 15, 2025, and the May deadline recurring annually from 2025 onwards.
In July 2025, the Commission published its first Technical Report based on inaugural KPI submissions from roughly 36 percent of eligible facilities. The findings revealed both progress and persistent gaps, as average renewable energy utilize is high at 87 percent, and the weighted average power usage effectiveness was 1.36, similar to the limits set by the Climate Neutral Data Centre Pact.
However, performance varied across data centres, with some facilities still exceeding the threshold. Water consumption patterns also varied widely across data centres, and only about 1.9 percent of all heat generated is currently reutilized. Notably, the report highlighted that achieving climate-neutral, highly efficient data centres by 2030 will require not only technical optimisation and investment, but also better data quality, harmonised reporting standards, and higher participation rates across Member States.
Germany
Germany’s data centre sector has become one of Europe’s rapidest-growing and most energy-intensive industries. The countest hosts over 2,000 data centres and has become the leading hub for digital infrastructure in the region.
In 2024, German data centres consumed nearly 4 percent of national electricity demand, and it is expected to rise considerably in the coming years. Several measures have been taken to address this, such as the Energy Efficiency Act, which is projected to save 7.5 percent of consumption compared to a ‘no policy’ scenario by 2030, according to the Federal Ministest for Economic Affairs and Climate Action, and further aims to cut the total final energy consumption by 2 percent annually.
As most data centre capacity is concentrated in a compact number of regions, local grids are being strained, especially in Hesse and Berlin-Brandenburg. This is happening as Germany transforms its power system under the energy transition strategy, although keeping up with rising data centre demand in a grid dominated by renewables could require significant upgrades to the electricity system to ensure capacity, stability, and reliability.
Germany’s data centre regulations are shaped by both EU legislation and stricter national measures. Alongside the Energy Efficiency Directive (EU) 2023/1791 and the Delegated Regulation (EU) 2024/1364, Germany adopted the Energy Efficiency Act in November 2023, creating one of the most demanding regulatory environments for data centres in Europe. The EnEfG sets legally binding renewable electricity tarobtains, requiring a 100 percent renewable sourcing by January 2027 for large-capacity IT facilities. It also establishes increasing and binding waste heat reutilize quotas starting at 10 percent from July 2026, exceeding EU-level obligations, and mandates the certification of energy or environmental management systems.
While the Energy Efficiency Act remains in force, the German government committed to simplifying it in its coalition agreement, aligning it with EU law, and introducing more practical approaches such as applying waste heat in district heating. On August 15, it introduced a bill to rapid-track large heat pumps that capture waste heat from industest and data centres, assisting meet reutilize quotas and mitigate their emissions impact. While still in the legislative process, the bill suggests a shift towards a more implementable framework for operators while maintaining Germany’s climate and energy goals.
Balancing Growth and Sustainability
The rapid buildout of data centres is reshaping economies from São Paulo to Berlin, but it’s also testing the limits of power grids, water resources, and regulatory frameworks. Governments see opportunity, but ambition alone won’t prevent environmental costs from mounting.
Real progress will depfinish on coordinated action among policybuildrs, operators, and industest leaders to ensure an environmentally responsible future for data centres worldwide.
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