From reporting to rating: the EU's next steps for data centres

The European Commission has announced a common rating scheme for data centre sustainability, aimed at increasing transparency on energy use and facilitating data centres' integration into Europe's energy infrastructure. From August 2027, it is proposed that every data centre already reporting under the EU's 2024 regime (established under the recast Energy Efficiency Directive) will receive an automatically generated label, graded A to G on two separate scales, energy and water. 

The rationale is clear from the wider numbers provided by the Commission: EU data centres consumed 68 TWh of electricity in 2024, a figure the Commission expects to reach 114 TWh by 2030, 3.2% of the bloc's total electricity demand, with AI named as one of the main drivers of that growth. The Commission also cites Mario Draghi's 2024 report on European competitiveness directly, arguing that cutting energy waste frees up money for R&D, skills and jobs (see our blog, Draghi's blueprint: sector strategies to secure Europe's competitiveness, for more detail).

The rating scheme is a deliverable of the energy efficiency roadmap the Commission presented on 13 June 2025, which made a data centre energy efficiency package one of its 10 priority areas. The Commission is working in three steps: reporting came first, through Delegated Regulation (EU) 2024/1364 in March 2024; this rating scheme is the second; a newly launched consultation on binding minimum performance standards could bring the third.

On 21 September 2026 the Commission adopted the Delegated Regulation establishing a common Union rating scheme for data centres, the same day it launched the public consultation on binding minimum performance standards. Because this is a Delegated Regulation, Parliament and Council cannot amend the text: their only option is to object and the threshold for doing so is high – a qualified majority (55% of member states, representing at least 65% of the total EU population). Most delegated acts therefore pass as adopted without changes to the text proposed by the Commission. The scrutiny period runs for two months, extendable by a further two, after which it can be published in the Official Journal and enter into force 20 days later.

How the rating scheme works

The two ratings. Every reporting data centre gets energy and water A-to-G grades. The energy grade comes from Power Usage Effectiveness (PUE): the total energy the facility uses, divided by the energy used by its IT equipment. The water grade comes from Water Usage Effectiveness (WUE): the freshwater the facility takes in, divided by that same IT equipment energy. An A grade is a PUE of 1.15 or below and a WUE of 0.1 or below; A G grade is a PUE above 1.9 and a WUE above 1.0. The two do not combine into a single score.

What the label shows. In addition to the two grades, the label also shows where the energy comes from (on-site, power purchase agreements (PPAs) and guarantee-of-origin sourcing, renewable and nuclear), grid flexibility, and whether the site is “waste heat reuse ready”, a status this Regulation defines for the first time. It also shows cooling degree days for the site, filled in automatically from its location, so an A-rated Finnish facility and a B-rated Spanish one are not read blind. The grades themselves, though, are not climate-adjusted: the context sits alongside the letter, not inside it.

Not all clean power counts equally. The label separates supply backed by genuinely new generation (plants commissioned or substantially refurbished within the last 10 years) from older or more loosely sourced supply, and applies the same test to nuclear. Guarantees of origin face two further conditions that PPAs do not: production must sit in the same bidding zone or Member State and must be matched to the consumption period. For anyone negotiating long-term PPAs, an old wind farm and a new one will not score the same.

Timing and scope. Labels are generated automatically from data that operators already report: first by 15 August 2027, then annually. The 500kW threshold carries over unchanged from the reporting regime and measures installed IT power demand, not total facility draw, so headline MW capacity is not a reliable guide to scope. Smaller sites can still take part voluntarily, as can data centres not yet operational, which report the figures they are designed to achieve after two years of operation, then switch to actual data from their first year. Sites used exclusively for defence or civil protection are exempt altogether.

Minimum performance standards

Separately, the Commission opened a 12-week consultation on minimum performance standards, closing 14 December 2026. This would be the third step, and a different kind of instrument: not a delegated act grading what operators already report, but a Regulation, imposing a mandatory floor rather than publishing a grade.

The Commission wants every new or retrofitted data centre to hit a minimum level on energy efficiency, water use, waste heat reuse, services to the grid and other sustainability criteria, phasing out the worst-performing technologies and practices. The consultation will determine which indicators carry those standards, and at what thresholds. The Commission will run technical workshops and surveys through 2026, complete an impact assessment in Q4 2026, and table a legislative proposal in Q2 2027.

Implications and next steps

Beyond transparency, the rating scheme is likely to carry commercial weight: the Commission confirms in its Explanatory Memorandum that it will use the ratings to assess sustainability under the proposed Cloud and AI Development Act, and the scheme has been considered in the review of the Climate and Environmental Delegated Acts under the Taxonomy Regulation. A weak grade could therefore surface in procurement and financing conversations well before any binding standard exists, and because the label draws on data operators already report, the numbers going in now are the ones that will set the first grades.

With both regulatory workstreams advancing in parallel, the coming months will be critical for data centre operators. The Delegated Regulation on the rating scheme is expected to enter into force following scrutiny by the co-legislators by the end of the year, while the Commission is already developing minimum performance standards, with a legislative proposal expected in Q2 2027.

Because the Commission has not yet chosen either the indicators or the thresholds for the minimum standards, operators still have room to formally participate in the decision-making process and share feedback on the floor they will eventually have to meet as the deadline for responses lapses on 14 December 2026. If you would like more information regarding any of these developments, or support in responding to the consultation, please get in touch with the authors or your usual Freshfields contact.

“To ensure that the digital transformation truly works for our society, we must address the growing energy demand of data centres. Understanding their energy and resource consumption is the essential first step towards integrating them sustainably into our energy system. Digital sovereignty must go hand in hand with energy responsibility. ”

Dan Jørgensen, Commissioner for Energy and Housing, in the European Commission's press release announcing the measures

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