The European Commission has adopted a delegated regulation establishing a common EU rating scheme for data centres under the Energy Efficiency Directive. The scheme will use data that operators report on energy and water performance, including power usage effectiveness and water usage effectiveness, to generate electronic labels on an A to G scale for energy and for water. The first labels are to be generated by 15 August 2027 and annually after that, according to the Commission documents.
Alongside the regulation, the Commission published a report to the European Parliament and the Council on the first round of data reported by data centres for 2024. The report found that 770 data centres submitted data, around 36% of the estimated number of sites within scope. Of the data submitted, 70.1% was judged reliable. The average reported PUE was 1.36, and only about 1.8% of the heat generated by reporting data centres was reused.
Background
The recast Energy Efficiency Directive, adopted in 2023, requires operators of data centres with an installed IT power demand of at least 500 kW to report key performance indicators to a European database each year. These include energy consumption, power usage effectiveness, water use, waste heat reuse and the share of renewable energy. The first reports were due in 2024. The directive also tasked the Commission with assessing the data and proposing a rating scheme.
Low coverage
The low share of in-scope data centres that reported suggests that many operators either did not comply or were not identified by national authorities. Member states are responsible for enforcement, and the quality of national implementation varies. An analysis by energynews.biz noted that the rating scheme rests on data from about 36% of sites and does not set a minimum performance floor. The Energy Efficiency Directive provides for the Commission to assess whether further measures, such as minimum performance standards, are needed once data have been collected.
What PUE and WUE measure
Power usage effectiveness is the ratio of total facility energy to the energy used by IT equipment. A PUE of 1.36 means that for every unit of energy used by servers, a further 0.36 units go to cooling, power distribution and other overhead. Leading hyperscale operators report lower figures; Google reported an average of 1.09 for 2025 and Amazon 1.14. Water usage effectiveness measures litres of water used per kilowatt-hour of IT energy.
Both metrics have limitations. PUE does not capture how efficiently servers use energy, and WUE does not reflect local water scarcity. Low PUE designs that rely on evaporative cooling can use more water, so the energy and water labels may sometimes point in different directions.
Who must report
Operators report through a European database run by the Commission, and national authorities are responsible for identifying in-scope facilities and enforcing reporting. Some information is published only in aggregate form to protect commercially sensitive data.
Heat reuse
The very low share of heat reused, about 1.8%, reflects the fact that most data centres are not connected to district heating networks. Heat reuse is more common in the Nordic countries, where district heating is widespread. Germany's Energy Efficiency Act sets requirements for new data centres to reuse a share of their waste heat. Reusing heat depends on having nearby demand and infrastructure, which often requires coordination with municipalities and utilities.
Electricity demand
Data centres are a growing source of electricity demand in Europe, concentrated in Frankfurt, London, Amsterdam, Paris and Dublin, and increasingly in the Nordic countries, Spain and Italy. In Ireland, data centres account for a large share of national electricity consumption, and the grid operator has restricted new connections in the Dublin area. The IEA estimated in April 2026 that global data centre electricity use rose 17% in 2025 and is set to double by 2030.
The EU has also been developing policy to attract AI investment, including plans for large AI computing facilities. That ambition sits alongside climate goals, including the 2040 target of a 90% net emissions cut, and the need to expand grids and clean generation. The rating scheme is intended to make data centre performance transparent, giving customers, investors and authorities a common basis for comparison.
Water
Water use by data centres has become a local concern in parts of southern Europe, where drought has reduced water availability, and in other regions during heatwaves. The 2026 summer brought severe drought to parts of France, Hungary, Romania and Serbia and record-low river flows on the Rhine and Danube. Many new data centres in Europe use air cooling or closed-loop systems to limit water consumption.
Renewable energy share
Operators also report the share of renewable energy they use. Many large operators buy renewable power through long-term contracts, and some technology companies have signed some of the largest corporate power purchase agreements in Europe. The IEA estimated that technology companies accounted for around 40% of corporate renewable power purchase agreements signed globally in 2025. The rating scheme's energy label is based on efficiency metrics rather than on the source of electricity, so a highly efficient facility running on fossil-heavy grid power could still score well on energy efficiency.
Grid connection pressure
Beyond efficiency, the main constraint on data centre growth in several European markets is grid capacity. Connection queues in Frankfurt, Amsterdam and Dublin have lengthened, and some grid operators have introduced moratoria or conditions on new large connections. Transparency on efficiency does not by itself resolve grid bottlenecks, but national authorities may use the reported data when deciding how to allocate scarce connection capacity or what conditions to attach, such as heat reuse or flexibility commitments.
Industry response
Industry groups have in earlier consultations supported a common EU framework while raising concerns about data quality, the comparability of metrics across different types of facilities and the administrative burden of reporting. Colocation providers, which host equipment for many customers, have argued that they do not control the efficiency of the IT equipment in their facilities.
What to watch
Key items include whether national enforcement improves reporting coverage for the 2025 data, the Commission's assessment of minimum performance standards, how operators respond to the first labels in 2027 and the interaction with EU policies to expand AI computing capacity.