Leaders of European data center associations have given a cautious welcome to European Commission plans for an efficiency labeling scheme for data centers, but warned it must be a fair system that doesn’t compromise the continent’s competitiveness.

The commission’s Data Centre Energy Efficiency Package was formally launched last week, and would introduce a common rating scheme covering data centers with a capacity exceeding 500kW. It would produce a rating based on a data center’s energy and water efficiency metrics, and take into account a facility’s support for grid balancing services, contributions to waste heat recovery, and use of renewable energy.

Data centers are already compelled to report much of this information under separate legislation, the EU’s Energy Efficiency Directive.

With Europe aiming to triple its data center capacity over the five-seven years, including via its AI gigafactories program, concern is growing among residents across the Bloc about the amount of power and water these facilities will consume.

The proposals come months after several leading data center operators were accused of using a secrecy provision in EU law to block public access to crucial information about the environmental impact of their data centers.

Europe’s data center efficiency rating needs nuance

Speaking at the European Data Center Associations summit, held in Zagreb, Croatia, last week, leaders of Europe’s data center associations reflected on the proposals.

Stijn Grove, managing director of the Dutch Data Center Association, likened the scheme to the efficiency sticker found on consumer electronic devices such as washing machines.

He told DCD: “This will put a stamp or a sticker on a data center. I think having a monitoring system for data centers is positive. Can you do that with all its nuances and put it into a small sticker with some data and colours? I’m not really sure.”

Grove said the different conditions faced by operators across the Bloc mean coming up with a fair rating system could be tricky. He said: “If you look at southern Europe, what they can achieve there is not really reflected well in the sticker compared to northern European data centers. The idea is very good, but there are still things we need to adjust.”

For Michaël Reffay, managing director of France Datacenter, the proposals should be welcomed because they “increase transparency, and transparency means acceptance” for data centers.

He said: “It’s reasonable to increase this aspect of our industry, but we must be careful the scheme is not too much of a burden compared to other geographical zones, such as the US and China.”

Reffay said he was also keen to avoid “asymmetries” across Europe being accentuated any new rules, and added: “This label should not force private and industrial stakeholders to disclose intellectual property or any kind of secret business. But overall, it makes sense.”

Fighting the ‘black hole’ myth

Isabelle Kemlin is vice chair of the board of Swedish Datacenter Industry, and said the rules would help her organization’s members show the progress they are making on becoming more sustainable.

She said: “No matter where we are on the scale, we will be able to show progress, and I think it’s good that that progress is visible.”

Kemlin said the measures could help dispel the idea that data centers are a “black hole” where no one knows what is happening when it comes to efficiency improvements. She said: “Tremendous efforts are being put into making data centers more sustainable, no matter if they are in Portugal or Sweden.”

Digital Infrastructure Ireland’s CEO Ronan Kelly said the data center industry was used to having information “cloaked in secrecy” for security reasons, but said as the sector becomes more visible as part of the AI build-out, it was necessary to strike a balance between the need for security and transparency.

He said: “We don’t necessarily need to expose things of a secure nature to be able to partake in these programs. We can do it discreetly and still provide the comfort to the solution providers, the software players, and, ultimately, the end users, to give them the comfort of knowing that the service they’re using is being housed in a data center that has a AAA rating, or whatever the actual rating they end up using is.”

The associations and their members will be able to feed into an EC call for evidence about the scheme, which is open now and closes in December.

It will also be subject to a two-month scrutiny period by the European Parliament and the Council before entering into force. This gives co-legislators the opportunity to object to the proposal, though they can not propose amendments.

If it goes ahead, the first ratings from the scheme are expected sometime in 2027. A first review is expected to follow by the end of 2028.