EU aims for greener data centres but regulatory and measurement hurdles could slow progress

The European Union is pushing to make data centres more sustainable amid challenges in regulation, reporting, and incentivising energy efficiency, as the sector’s growth threatens to undermine climate ambitions.

Europe’s scramble to expand data centre capacity is colliding with its climate ambitions as policymakers struggle to turn sparse, inconsistent reporting into effective regulation and incentives.

The European Commission has introduced four mandatory sustainability indicators for data centres, energy use, water use, heat reuse and share of renewable energy, to illuminate the sector’s footprint,but the first EU-wide report published last July produced limited insight because only 36% of operators covered by the rules submitted data and some member states have not yet implemented the law,according to Euractiv. ^[1]

That patchy evidence has not stopped Brussels from moving ahead with plans to rank data centres by environmental performance and to link top-rated projects to faster approvals under the proposed 2026 Cloud and AI Development Act,according to Commission statements and policy documents. The Commission is also revising the four indicators ahead of the rating scheme expected in 2026. ^[1][4][3]

Industry bodies and consultants warn the measurement framework must be refined to avoid perverse outcomes. The European Data Centre Association has proposed changing how power usage is calculated to avoid penalising operators that channel server heat to warm nearby buildings,rather than allowing it to dissipate. Other measures such as rainwater cooling or on-site power generation should also be recognised in any sustainability score. ^[1]

Experts emphasise that improving transparency and verification is the immediate priority. “Transparency and honesty” in reported data must come first,said Mark Butcher,director at Posetiv Cloud,who urged stricter application of existing European and international standards and independent audits to make information reliable. John Booth,Carbon3IT consultant,added that smaller data centres, often less efficient, remain a blind spot and that colocation facilities complicate measurement because customers control much of the equipment. ^[1]

Regulation is converging with other EU moves to drive efficiency. The revised Energy Efficiency Directive now requires data centres above reporting thresholds to submit Power Usage Effectiveness (PUE) and other metrics to a public European database,with average European PUE reported at 1.48 in 2024 and benchmarks of 1.30 or lower for new facilities in cool climates and below 1.40 in warm climates cited by consultancy reporting. Other sources state legally binding targets of 1.5 or lower for existing facilities operational by July 1,2026,and mandatory reporting for centres with an IT power demand of 500 kW or more took effect in 2024. These measures aim to sharpen transparency and spur upgrades across the sector. ^[2][5][7]

Commission figures and industry analyses underline the urgency: data centres account for roughly 1.5% of global electricity demand today and could more than double by 2030 if unchecked,creating a large growth vector for emissions unless energy efficiency and clean power use accelerate. The Commission is drafting a dedicated data centre energy efficiency package due in early 2026 to address these risks and promote sustainable design and operations. ^[3][4]

Policymakers must also grapple with lifecycle trade-offs that better reporting alone will not resolve. Replacing ageing servers and cooling equipment can cut operational energy use but carries emissions from manufacturing and disposal; idle servers and low utilisation rates remain a persistent inefficiency; and reuse,repair and recycling of IT components are not yet well captured by current metrics. Industry initiatives such as the Climate Neutral Data Centre Pact aim to tackle some of these issues by 2030,but such voluntary schemes will need regulatory backing and independent verification to be credible at scale. ^[1][6]

If the EU is to square its twin objectives of digital capacity and climate neutrality,it will need tighter, audited data, clearer incentives that reward genuine whole-life improvements, and regulatory calibration that recognises beneficial practices such as heat reuse without creating loopholes. Absent that combination,the bloc risks expanding a critical part of its digital backbone while leaving substantial environmental costs unaccounted for. ^{[1][2][3][4][5][6]}

📌 Reference Map:

• ^[1] (Euractiv) – Paragraph 1, Paragraph 2, Paragraph 3, Paragraph 4, Paragraph 7, Paragraph 8
• ^[4] (European Commission energy) – Paragraph 2, Paragraph 6
• ^[2] (PwC Belgium) – Paragraph 6, Paragraph 8
• ^[5] (CleanBridge Global Data Center Market Report) – Paragraph 6
• ^[7] (datacenters.com) – Paragraph 6
• ^[3] (European Commission energy focus) – Paragraph 6, Paragraph 8
• ^[6] (Wikipedia: Climate Neutral Data Centre Pact) – Paragraph 8

Source: Fuse Wire Services