The European Union is moving to introduce rules requiring data centres above a certain size to disclose their energy and water use. The measure aims to manage the impact on power grids and natural resources as demand for data centres surges with the spread of artificial intelligence.

On Sept. 21 local time, IT outlet Engadget reported that the European Commission proposed rules applying a common rating system to data centres with power capacity exceeding 500 kW.

The proposal comes as the EU plans to triple data-centre capacity in the bloc within the next seven years. The EU is expanding key infrastructure such as data centres to strengthen digital sovereignty, while taking into account that more facilities could raise electricity and water use and affect carbon emissions.

The European Commission said data-centre electricity consumption in the EU reached 68 TWh in 2024. Applying International Energy Agency forecasts, it is expected to rise to 114 TWh by 2030 due to factors including expansion of AI computing infrastructure. That would exceed 3 percent of the EU's total electricity consumption.

The EU focused on improving operational efficiency and transparency in resource use rather than limiting the size of data centres. The Commission said data centres should have a high level of energy and water efficiency and be integrated into the energy system in a sustainable way.

The proposal does not immediately set caps on electricity or water use by data centres. The core of the current rules is to require each facility to disclose its resource use, rather than limiting the amount of electricity operators can use or forcing water consumption below a certain level.

Data-centre operators must disclose not only electricity use but also information on water use linked to local levels of water scarcity. Disclosures are also expected to include whether facilities contribute to local energy ecosystems, such as by reusing waste heat for district heating or other purposes.

The new rating system could be used as a benchmark for future performance regulation of data centres. The EU also plans to separately set minimum performance standards to apply to data centres in the bloc. The rating system could operate in a format similar to energy-efficiency labels for home appliances or cars and is expected to be used as an indicator for comparing energy and resource efficiency among data centres.

The process to introduce the rules has also begun. The European Commission has started a two-month consultation process so the European Parliament and the Council of the European Union can review the proposed rules and provide opinions. If it proceeds as planned, data centres will have to disclose sustainability-related ratings or information starting next year.

The proposal comes as investment in data centres expands with rapid growth in the AI industry. As the computing required for training and inference of AI models increases, electricity demand from data centres is rising quickly, while water use for cooling at large facilities is also emerging as a major environmental issue.

For the EU, it must achieve two goals at the same time: securing digital competitiveness by expanding AI and data infrastructure, and managing power and water resources. As a result, a key point of interest is how future disclosed data will be linked to actual minimum performance standards or additional rules on resource use.

Attention is also focused on what measures data-centre operators will put forward on waste-heat reuse and improving water-use efficiency. As AI infrastructure expansion gathers pace, regulatory and management standards around electricity and water use by data centres are expected to become more specific.