EU to Launch Mandatory Sustainability Labels for Data Centers

The European Commission announced the release of a proposed regulation to establish a new rating scheme and a related sustainability label for data centers, providing information including energy efficiency, water use, energy sourcing and contribution to grid flexibility. Under the new regulation, a sustainability label would be generated for all EU data centers with a capacity above 500 kW.

According to the Commission, the new regulation comes as the EU is seeking to triple its data center capacity over the next 5-7 years under its plan to strengthen technological independence and digital sovereignty, but also needs to address challenges presented by this growth, including the additional pressure placed by new data centers on the electricity grid, use of natural resources such as water, and increased carbon emissions.

Teresa Ribera, Commission Executive Vice-President for Clean, Just and Competitive Transition, said:

“Tripling our data centre capacity cannot mean tripling the pressure on our grids, our water and our energy bills. That starts with transparency, rating large data centres depending on their impact on our energy system. Efficient, flexible, powered by additional clean energy and reusing waste heat, this is how data centres become an asset for EU’s energy transition.”

The Commission said that the rating scheme will increase transparency and ensure that information is available about the actual use of resources by data centers. The rating scheme is expected to allow comparison between data centers, as well as to promote new designs or appropriate efficiency interventions in new or existing data centers, to help lead to significant reductions in energy and water usage, and the use of low-emissions energy and increased grid efficiency.

The new proposed labels would provide separate ratings, ranging from A to G, on the data center’s power and water use effectiveness, a breakdown of the data center’s energy sources – such as on site renewables, renewable energy PPAs, and renewable energy guarantees of origin, and nuclear energy – as well as sustainability features including PPA and guarantees of origin contributions to new grid capacity, and whether the data centers provide flexibility to the grid and utilize waste heat reuse.

Under the new proposed regulations, the first sustainability labels for individual data centers are expected to be displayed in August 2027.

The new proposal was introduced in the form of a Delegated Regulation, which will be subject to a 2-month scrutiny period by the European Parliament and the Council before entering into force.

Alongside the new rating scheme and label, the Commission also announced the launch of a call for evidence and public consultation on minimum performance standards for data centers, designed to promote the energy efficiency and sustainability of data centers, and to help create lead markets for sustainable digital assets and services across Europe. The consultation will remain open through December 14, 2026.

Dan Jørgensen, Commissioner for Energy and Housing, said:

“To ensure that the digital transformation truly works for our society, we must address the growing energy demand of data centres. Understanding their energy and resource consumption is the essential first step towards integrating them sustainably into our energy system. Digital sovereignty must go hand in hand with energy responsibility.”

Click here to access the proposed rating and label regulation, and the consultation on minimum performance standards for data centers.