To address the environmental footprint of data centres, the European Commission proposed the introduction of a sustainability label for data centres in the EU.
Artificial intelligence (AI) is widely recognised as a critical strategic asset for Europe’s future competitiveness. European Commission President Ursula von der Leyen highlighted AI as a major tipping point during her State of the Union address in September, while Executive Vice-President Henna Virkkunen reinforced its potential at the AI Summit on 14 October. However, expanding AI workloads depend heavily on physical computing infrastructure that consumes substantial power and water resources.
Therefore, on 21 September the Commission published an updated delegated act setting up a common rating scheme for the sustainability of data centres in the EU. This article explores the core features of the proposed sustainability label for data centres, how effective it promises to be, and what the key next steps are for data centre operators.
Table of contents:
What is the common EU sustainability label for data centres?
Why is the EU introducing a sustainability label for data centres now?
Which data centres are required to have an EU sustainability label?
What information will the EU sustainability label for data centres show?
How effective is the data centre sustainability rating scheme likely to be?
What happens next, and what should data centre operators prepare for?
What is the common EU sustainability label for data centres?
The European Commission’s proposed sustainability label for data centres is an automated rating system designed to assess and display the environmental performance of data centres across the EU. Formally published in September 2026, the scheme rates data centre facilities annually, based on operational data submitted to the existing centralised European database.
The common scheme evaluates data centres across key sustainability dimensions, including Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE) and the proportion of low-emission energy utilised.
Why is the EU introducing a sustainability label for data centres now?
Data centres are one of the world’s fastest growing sectors. This rapid growth contributes to increased carbon emissions and puts significant pressure on power grid capacity and the use of natural resources, such as a water. As projections indicate the sector will consume more than 3% of the overall electricity demand in the EU by 2030, the European Commission revised its existing framework to better evaluate and limit these environmental impacts.
The 2026 Delegated Act transforms the current framework from a passive data-collection tool into an active, public rating and labelling mechanism. The earlier 2024 regulation (Delegated Regulation (EU) 2024/1364) established measurement methodologies and required operators to submit baseline metrics into a non-public database.
In contrast, the new act introduces standardized A-to-G rating scales and requires operators to make their electronic label available upon request. The updated scheme also expands its focus to evaluate waste heat recovery capabilities and grid stability services, such as peak demand shifting.
Ultimately, the new common rating aims to increase transparency about the actual use of resources by data centres, namely energy and water, and to become a resource that will help inform policy making.
Which data centres are required to have an EU sustainability label?
Participation is mandatory for all data centre facilities with a capacity of 500kW or above. Smaller data centres below this capacity, as well as facilities currently under construction, may choose to report their information voluntarily to receive an official label. In addition, facilities used exclusively for national defence or civil protection services are exempt from these requirements.
What information will the EU sustainability label for data centres show?
The EU sustainability label for data centres will display two separate ratings on an A-to-G scale:
- For energy efficiency, measured through Power Usage Effectiveness (PUE),
- For freshwater efficiency, measured through Water Usage Effectiveness (WUE).
In both cases, “A” represents the highest efficiency class. These ratings will sit alongside a breakdown of the facility’s energy sources, distinguishing renewable and nuclear energy supplied through on-site generation, power purchase agreements and guarantees of origin, as well as energy whose source has not been identified.
The label will also indicate whether the data centre provides flexibility services to the electricity grid and whether it is equipped to supply waste heat for reuse. Basic information will identify the facility, its operator, location, size category, date of entry into operation and reporting period, alongside a QR code.
Rather than assigning a single overall sustainability grade, the label will present these indicators together to support comparisons between facilities. An accompanying Commission guidance document will explain how to interpret the results, including the influence of local climate, water stress, facility size and age, and the potential trade-offs between energy and water efficiency.
The sustainability label for data centre will be automatically generated by the European database on data centres (currently up and running), based on information submitted by the data centres operators.
How effective is the data centre sustainability rating scheme likely to be?
The effectiveness of the new data centre sustainability rating scheme depends heavily on data quality and geographical sensitivity.
A major vulnerability identified by the Commission is that only 36% of EU data centres currently submit their mandatory disclosures under existing energy efficiency laws. This widespread underreporting hinders regulators from forming a complete picture of total energy and water demands across the sector.
Additionally, industry representatives point out that uniform rating metrics can create geographical distortions. For instance, Water Usage Effectiveness (WUE) scores do not account for regional climate variations, potentially penalizing facilities in warmer southern regions that rely more heavily on evaporative cooling. To mitigate this issue, the Commission plans to accompany each label with a contextual document that explains local operating conditions.
Only with accurate information and a fair rating system can proper policy making be made to ensure data centres are sustainable, flexible and well-designed.
What happens next, and what should data centre operators prepare for?
The legal act establishing the common EU data centre rating scheme is currently undergoing a two-month scrutiny period by the European Parliament and the Council, ending on 21 November 2026. Barring any objections, the regulation will enter into force shortly thereafter.
The European database will automatically issue the first official electronic sustainability labels by 15 August 2027.
In parallel, the Commission has launched a public consultation running until 14 December 2026 regarding binding minimum energy performance standards. These proposed minimum standards will apply specifically to new facilities, applying further regulatory pressure alongside the transparency label.
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