The European Commission has proposed new rules requiring large data centres to disclose how efficiently they use energy and water, as Europe prepares for a sharp expansion in computing capacity driven by artificial intelligence.
Under the proposal, data centres with an installed information-technology power demand of at least 500 kilowatts would receive an EU-designed sustainability rating based on reported performance indicators. The label is intended to make it easier to compare facilities on energy and water efficiency.
The rules would not immediately impose hard limits on how much electricity or water a data centre can consume. They also would not require operators to publicly disclose their total power use.
Instead, the first step is transparency.
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Data centres would disclose energy and water efficiency
The proposed system would require qualifying data centres to report metrics showing how efficiently they convert electricity into computing activity and how much water is used in the process.
Operators would also have to disclose information about how their water consumption relates to local water stress. That means a facility located in an area already struggling with water scarcity could receive greater scrutiny than one operating where water is abundant.
The Commission also wants information on whether a data centre can support the local energy system.
That could include reusing waste heat generated by servers for nearby buildings or district-heating systems.
The approach reflects a shift in how governments are looking at data centres. They are increasingly treated not just as technology infrastructure but as large industrial users of electricity, water and land.
What the new EU label would actually show
A data-centre efficiency label would work somewhat like the energy-efficiency ratings already used for appliances and buildings.
It would not simply tell users how much electricity a facility consumes.
Instead, it would assess how efficiently the centre uses resources relative to its computing activity and operational design.
This matters because two data centres with similar computing capacity can have very different environmental footprints depending on their cooling systems, hardware efficiency, climate and energy source.
The EU already requires large data centres to report energy-performance and water-footprint information under its Energy Efficiency Directive. The new proposal would turn that data into a common rating system that can be compared across Europe.
AI expansion is pushing electricity demand higher
The timing is closely linked to Europe’s AI strategy.
Data centres currently account for around 2.5% of electricity consumption in the European Union, according to figures cited by the Commission and Reuters.
That share is expected to increase sharply.
EU data-centre capacity is projected to rise from around 12 gigawatts in 2025 to about 28 GW by 2030 as cloud providers and AI companies build more infrastructure.
Globally, the International Energy Agency estimates that data centres currently use around 415 terawatt-hours of electricity each year, or roughly 1.5% of worldwide electricity consumption. That demand could more than double to about 945 TWh by 2030, driven largely by AI-related computing.
Europe also wants to expand its own computing capacity to reduce dependence on US technology companies and strengthen its AI industry.
The challenge is doing so without overwhelming power grids or intensifying pressure on local water resources.
Minimum standards could come next
The proposed rating system may be only the first stage.
The Commission has launched a 12-week public consultation on minimum performance standards for data centres, with a legislative proposal planned for the second quarter of 2027.
Those future standards could go further than disclosure and eventually require inefficient facilities to improve their performance.
The Commission says minimum standards could help reduce energy consumption and the wider environmental footprint of the sector.
The current consultation runs until December 14, 2026.
EU member states and lawmakers also have two months to object to the new rating rules. If no objection is raised, the delegated regulation can enter into force.
Data-centre regulation is spreading beyond Europe
Europe is not alone in focusing on the resource demands of AI infrastructure.
Texas recently tightened oversight of data centres after concerns that some large facilities were not complying with water-use reporting requirements. State authorities have warned that operators that fail to provide required information could face penalties or difficulties obtaining environmental permits.
The concern is becoming global because hyperscale AI facilities require far more than processors and servers.
Their expansion depends on electricity generation, transmission lines, cooling systems and access to reliable water supplies.
The EU’s new framework is therefore less about restricting AI directly and more about forcing the infrastructure behind it to become measurable and comparable.
What this means for you: The rules will mainly affect data-centre operators rather than ordinary internet users. But stricter efficiency standards could eventually influence where AI infrastructure is built, how much power and water it consumes and the cost of running cloud and AI services.
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