The European Commission (EC) has submitted a proposal to require data centers across Europe to disclose their energy and water efficiency metrics.

The European Union (EU) aims to triple its data center capacity over the next five to seven years. This has raised concerns about the build-out's potential impact on the power grid and natural resource use.

The proposed rules would create a common rating scheme covering data centers with a capacity exceeding 500kW. The scheme would also cover data centers' support for grid balancing services, contributions to waste heat recovery, and use of renewable energy generation.

In support of the proposal, the EC has also launched a call for evidence and public consultation on minimum performance standards for data centers in Europe. The consultation will close in December.

The proposal is now subject to a two-month scrutiny period by the European Parliament and the Council before entering into force. This gives co-legislators the opportunity to object to the proposal, but not to propose amendments.

The first ratings from the scheme are expected sometime in 2027. A first review is expected to follow by the end of 2028.

European officials have launched several projects to support the bloc's energy system in meeting the demands from the data center sector. In June, the EU launched two initiatives to that effect. The first seeks to bring together a range of stakeholders, including data center developers, energy companies, and public authorities, to integrate data centers into the EU energy system. The second, dubbed the AI grids project, seeks to develop the first pan-European AI foundation model for electricity grids.

The rules came shortly after reports emerged that several of the largest data center operators were accused of using a secrecy provision in EU law to block public access to crucial information about the environmental impact of their data centers.

Data centers are projected to grow exponentially across the European market, forecast to rise from approximately 9.2GW at present to more than 17GW in 2030, much of which is driven by AI. As a result, emissions emanating from the sector are also expected to skyrocket, especially with the data center size also increasing significantly.

The lack of reporting regarding the impact of individual data centers could seriously curtail the ability of independent bodies to scrutinize their impact, potentially impacting the EU’s capacity to meet carbon reduction targets.