European Commission introduces sustainability labeling for data centres

The European Commission has launched a new transparency framework for the continent’s rapidly growing data-centre industry, effective as of September 21, 2026. Data centres with an installed capacity exceeding 500 kilowatts must now utilize an electronic sustainability label to disclose their energy and water efficiency, as well as the sources of their power. While the scheme requires reporting on the relationship between water consumption and local water stress levels, it does not currently impose binding limits on resource usage.

This policy initiative arrives as Brussels aims to triple the bloc’s total data-centre capacity by 2035 to bolster European artificial intelligence infrastructure and diminish reliance on foreign technology providers. Although the current measures focus on transparency, critics and media reports note that stricter, binding regulations for energy and water consumption are not expected until 2027. The Commission maintains that this rating system is designed to incentivize the construction of more efficient facilities, though the industry is currently left with significant flexibility to adapt to the new reporting standards.