EU Proposes Rating System for Data Centers' Energy and Water Use

The European Commission on 21 September 2026 unveiled a rating scheme for data centres with at least 500 kW of installed capacity. Reporting facilities receive an electronic sustainability label as of that date. The Commission said the aim is to increase transparency about energy use and inform policymaking and procurement of more sustainable digital assets and services. EU data centres used 68 TWh in 2024; the bloc projects 114 TWh by 2030, or 3.2 percent of EU electricity, up from 2.5 percent. Brussels aims to roughly triple capacity by 2035. Teresa Ribera said tripling capacity cannot mean tripling pressure on grids, water and energy bills. What is contested: Mandatory reporting has applied since 2023, yet an anonymous Commission official said about one third of centres reported in year one and the rate is now hitting the 50 percent mark, with enforcement left largely to member states. Bram Vranken of Corporate Europe Observatory told Euronews the Microsoft confidentiality clause was kept in, though rewritten, calling that hugely problematic because much label information will be impossible to check. Microsoft’s July 2026 submission to Germany’s federal government supported clean power and efficiency indicators while seeking changes to water-efficiency bands, per the German lobby register. Minimum performance standards are due in 2027. Officials say the label can recognise low-emission energy including nuclear, and Brussels is examining waste-heat supply to as many as four million homes.