EU Proposes Mandatory Energy and Water Disclosures for Data Centers Over 500 kW
The European Commission has proposed a new rating scheme requiring data center operators with a capacity exceeding 500 kW to disclose energy and water consumption ratings starting in 2027. The proposal has entered a two-month consultation period for review by the European Parliament and the Council of the EU. Driven by the rapid growth of artificial intelligence, electricity demand from EU data centers is projected to rise from 68 TWh in 2024 to 114 TWh by 2030, representing over 3% of total EU electricity usage. Standardizing these sustainability disclosures will serve as a foundation for future EU-wide minimum environmental performance standards. The rating framework will not immediately cap resource consumption or require exact total electricity figures, but operators must report local water stress impacts and indicate if operational waste heat is reused in local energy networks. The labeling mechanism is modeled after energy rating systems used for home appliances and automobiles.
## BACKGROUND
Data centers require vast amounts of electricity and water for compute infrastructure and cooling systems, often measured using efficiency metrics like Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE). To strengthen its digital sovereignty, the EU aims to triple its regional data center capacity over the next seven years while managing the environmental footprint of these facilities.