September The European Commission has proposed a new common rating system for data centres as the rapid expansion of artificial intelligence increases demand for computing infrastructure across Europe.

The proposed framework would require data centres with an installed IT capacity of more than 500 kW to provide information on their energy and water efficiency. The initiative is designed to improve transparency as Europe prepares for a major expansion of data-centre capacity.

AI Expansion Raises Energy Concerns

AI systems require large amounts of computing power, which has accelerated investment in data centres. The European Commission says data centres could account for more than 3% of EU electricity demand by 2030, compared with current levels of around 2.5%.

The EU is also seeking to substantially increase its data-centre capacity over the coming years to support digital technologies and AI development.

Water Efficiency Also Comes Under Focus

Under the proposed rating system, operators would provide information about their water efficiency and the relationship between water consumption and local water stress.

The framework would also consider whether facilities can support the wider energy system, including through waste-heat reuse and flexibility in electricity consumption.

The European Commission estimates that reusing around half of the waste heat generated by European data centres could correspond to the heating demand of approximately four million households.

First Labels Expected in 2027

The proposed common rating scheme is currently subject to scrutiny by the European Parliament and the Council. If it proceeds, the first sustainability labels for individual data centres are expected to appear in 2027.

The Commission has also launched a public consultation on possible minimum performance standards for data centres. The consultation is scheduled to remain open until December 14, 2026, with a legislative proposal on minimum standards planned for 2027.

Why It Matters for AI

The initiative comes as governments increasingly examine the infrastructure requirements behind generative AI and other advanced computing technologies.

The EU’s approach does not currently impose a general cap on how much electricity or water a data centre can consume. Instead, the proposed rating system is intended to make resource-use information more transparent and provide a common basis for evaluating the sustainability of large facilities.

As AI adoption continues to grow, the balance between expanding computing capacity and managing electricity, water and environmental impacts is becoming an increasingly important issue for policymakers and technology companies.