EU Proposes Efficiency Labels for Data Centres to Curb Energy and Water Use

The European Commission has put forward rules that would require data centres across Europe to report how efficiently they consume energy and water, as the bloc prepares for a major expansion of its digital infrastructure.

The proposal comes amid mounting concern that the rapid growth of artificial intelligence and efforts to reduce dependence on US technology firms could place heavy strain on Europe's power grids, water supplies and climate targets. The EU aims to triple its data centre capacity within the next seven years.

Under the plan, operators of facilities with a capacity of 500 kW or more would have to disclose their energy and water efficiency using a labelling system designed by the EU. The scheme is intended to make performance more transparent and encourage companies to build more efficient facilities.

The rules would not cap energy or water consumption, nor would they require data centres to reveal their total power use. Operators would, however, have to provide information on how their water consumption relates to local water stress levels, and on whether they can support the surrounding energy system — for example, by reusing waste heat.

Data centres currently account for roughly 2.5% of electricity consumption in the EU, according to a report published in June. That share is expected to rise sharply, with capacity projected to more than double by 2030 to 28 gigawatts, up from 12 GW last year.

The new label could pave the way for mandatory minimum efficiency standards, which the EU is already developing. EU countries and lawmakers have two months to raise objections; if none are filed, the rules will enter into force.