European Union to implement energy ratings for data centers

The European Commission has proposed a new regulatory framework to monitor the environmental impact of large-scale data centers. Starting in 2027, facilities with an installed capacity exceeding 500 kW will be required to display energy and water efficiency ratings on a scale from A to G, similar to household appliance labeling.

This transparency initiative aims to address the rapid growth of digital infrastructure driven by artificial intelligence. According to the International Energy Agency, European data centers consumed 68 TWh of electricity in 2024—equivalent to the annual consumption of Belgium. This figure is projected to rise to 114 TWh by 2030, potentially accounting for more than 3% of the EU's total electricity demand.

The regulation focuses on disclosing metrics such as Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE), including how water consumption relates to local water stress. While the measure promotes transparency and aims to support the EU's goal of tripling computing capacity to ensure digital sovereignty, it does not currently impose mandatory consumption caps or strict reductions. The proposal is now subject to a two-month review period by the European Parliament and the Council of the European Union.