The European Commission has proposed a sustainability labelling system that will require data centre operators to publicly disclose their energy and water consumption through a standardised rating scheme. This initiative addresses the EU's ambitious plan to triple its data centre capacity over the next seven years to reduce dependence on US technology companies, whilst acknowledging that such expansion risks straining power grids, depleting water resources and increasing carbon emissions. The move aims to ensure that data centres operate efficiently and integrate sustainably with the energy system.

The labelling system will apply to data centres with a capacity exceeding 500 kW and will function similarly to energy labels used for appliances and vehicles. Data centres consumed 68 TWh of electricity across the EU in 2024, a figure expected to rise to 114 TWh by 2030—representing over three per cent of the bloc's total electricity consumption—largely due to demand for artificial intelligence computing power. Whilst the scheme does not impose hard limits on power or water consumption, operators must disclose how their water use relates to local water stress levels and whether they repurpose waste heat into the local energy ecosystem. A two-month consultation period is now open for the European Parliament and Council to review the proposals, with data centres expected to begin publishing sustainability labels from next year.