Energy Efficiency – Rating Scheme for Data Centers in Europe
Position of the Federation of German Industries (BDI)
23 April 2026
Executive Summary
Data centres form the backbone of the digital transformation and are a critical enabler of Europe’s competitiveness, innovation capacity, and digital sovereignty. They underpin the storage, processing, and provision of data in an increasingly interconnected and data-driven world. As data-intensive applications – particularly in cloud computing and artificial intelligence (AI) – continue to expand rapidly, demand for high-performance, energy-efficient, and sustainable digital infrastructure is rising accordingly.
In particular when compared to the United States and China, the European Union (EU) lags significantly behind in expanding its data centre capacity. The EU currently accounts for a total IT load capacity of around 10.9 GW, whereas the United States (48 GW) and China (38 GW) maintain a substantial lead. Closing this gap in a timely manner must be a clear strategic priority, with the ambition not only to catch up, but to keep pace with the world’s leading economies in the global race for digital infrastructure.
It is evident that member states will need to significantly expand their data centre capacities in the upcoming years. This necessitates the further development of regulatory, infrastructural, and investment frameworks at both the European and national levels. However, new legislation must not hinder the expansion of high-performance data centres or create unnecessary bureaucratic hurdles - particularly with regard to sustainability and energy efficiency. The twin transition – the simultaneous advancement of digitalisation and decarbonisation – must be pursued in a coherent and mutually reinforcing manner. Digital and climate policy objectives should not be treated in isolation or set in opposition to one another. On the contrary, sufficient data centre capacity is a prerequisite for enabling the technological innovation required to achieve climate neutrality and strengthen Europe’s industrial competitiveness.
In this context, German industry supports the European Commission’s objective of establishing a unified EU rating system to enhance transparency regarding the energy efficiency and sustainability of data centres. Such a system can contribute to the consistent coordination of efficiency and climate targets across Europe, while helping to identify efficiency potential, stimulate innovation, and facilitate sustainable investment decisions.
Bernardo E. Jacobs | Bereich Innovation, Sicherheit, Technologie | B.Jacobs@bdi.eu | www.bdi.eu
Philipp Schweikle | Bereich Innovation, Sicherheit, Technologie | P Schweikle@bdi.eu | www.bdi.eu
Polina Khubbeeva | Bereich Innovation, Sicherheit, Technologie | P Khubbeeva@bdi.eu | www.bdi.eu
At the same time, it must be ensured that the rating system strengthens Europe’s international competitiveness and does not impose additional regulatory burdens that could undermine the attractiveness of the location. Above all, the system must be designed in a practical and industry-oriented manner
The following key principles should guide the introduction of an EU-wide rating system for data centres:
▪ The system must promote competitiveness and enable investment.
▪ The system should avoid single-metrics labels but take into account local factors and adopt multi-dimensional, context-aware metrics instead.
▪ The assessment must remain technology-neutral and sufficiently flexible.
▪ Implementation must avoid disproportionate administrative burdens.
▪ The confidentiality and protection of sensitive business information must be guaranteed.
▪ The EU should align its digital, energy, and sustainability policies, ensuring that initiatives like the Energy Efficiency Directive (EED) and future cloud and AI legislation are well coordinated. Poorly designed standards could deter investment or shift workloads outside the EU, so the Commission should avoid conflicting or duplicative requirements.
Only if these conditions are met can an EU rating system make an effective contribution to improving energy efficiency, fostering sustainable technologies, and safeguarding Europe’s competitiveness.
Article 1
Establishment of the Evaluation System
German industry supports the introduction of a harmonised EU-wide sustainability rating scheme for data centres. A common European framework is clearly preferable to divergent national initiatives and would help strengthen the single market for digital infrastructure.
The scheme should build on the Energy Efficiency Directive (EED), which constitutes the foundation of an emerging reporting framework and offers significant potential for sectoral learning, aggregated analysis and, over time, robust benchmarking. At present, however, EED reporting remains at an early stage of implementation, with substantial differences across Member States in terms of data availability, consistency and quality. Against this background, the system is not yet sufficiently mature to underpin EU-wide rating bands or binding Minimum Performance Standards (MPS). Such elements should therefore only be introduced once the reporting and benchmarking framework has reached a higher level of reliability and comparability. Until then, the labelling scheme should incorporate a transparent and predictable mechanism for the regular recalibration of performance ranges, allowing it to evolve in line with improvements in data coverage, validation and cross-country comparability.
In designing the assessment framework, it is essential to avoid incentives for narrow, single-metric optimisation. A sole focus on individual indicators such as Power Usage Effectiveness (PUE) or Water Usage Effectiveness (WUE) risks generating unintended trade-offs between energy and water efficiency. The appropriate balance between these dimensions is inherently context-specific and depends on factors such as local climate conditions, water availability, grid carbon intensity and reuse opportunities. This calls for a multi-dimensional assessment approach that better reflects system-level sustainability outcomes and mitigates distortions arising from isolated metrics.
Over time, the framework should evolve into a more comprehensive and forward-looking sustainability instrument. While facility-level indicators such as PUE and WUE remain important and appropriate at the current stage, they do not capture the efficiency of the IT infrastructure itself, which accounts for a substantial share of total energy consumption. Future revisions, including the 2029 review, should therefore explore the gradual integration of complementary IT-level indicators in a proportionate and technology-neutral manner.
Overall, the rating scheme should remain technology-neutral, reflect different operational models and adequately account for geographical and site-specific conditions. It should prioritise incentives for innovation and continuous improvement.
Article 3
Creation of labels
German industry supports the digital and automated generation of labels, as well as their centralised provision via a European database.
Nevertheless, it is crucial that the underlying reporting and validation processes are designed to be efficient, transparent, and as unbureaucratic as possible. Additional reporting obligations or parallel national systems must be strictly avoided. The European database should serve as a central “single source of truth” Such a centralised platform is essential, as it provides a transparent, standardised
foundation that enables companies to track progress toward Net-Zero ambitions in a measurable and verifiable manner.
The labelling system should not make sensitive operational and / or customer-related information transparent to the public
It should also be ensured that the annual updating of labels remains practical and reflects the operational realities of data centres. In particular, in the context of dynamic utilisation rates and evolving operating conditions, a rigid annual assessment may only provide limited insight.
Furthermore, the labelling system must account for the specific operational requirements of data centres serving as critical infrastructure. For infrastructures with enhanced security and availability needs that rely on continuous data availability, such as public sector services, hospitals, transportation systems or financial service providers, the rating must reflect that necessary redundancies and security measures may influence standard efficiency metrics. The labelling should therefore provide a nuanced perspective that does not penalise high-reliability architectures
Article 5
Amendments to the existing regulation and reporting requirements
German industry welcomes the proposed simplifications and clarifications in reporting obligations, as well as the stronger consideration of practical challenges in data collection.
At the same time, it is essential that requirements regarding data quality and reporting obligations remain proportionate. In particular, for colocation providers and complex operational models, workable solutions must be ensured that allow for realistic and feasible data collection. For example, the growing share of renewable electricity highlights the relevance of system flexibility. Depending on their design, application and business model, some data centres may contribute to system flexibility to a limited extent. However, such potential should not be assumed across the board, as many data centres have only very limited flexibility options due to their operational requirements. Existing indicators, such as “Functions to the Grid”, could already capture these aspects
The introduction of additional technical definitions, for example regarding waste heat utilisation or cooling systems, should remain technology-neutral and must not create implicit obligations. Measures such as the use of waste heat are generally welcome but must be economically viable and practically implementable from an infrastructure perspective.
German industry also emphasises the need to consolidate existing reporting obligations at EU level and to consistently avoid duplicative structures.
Article 6
Review and further development
German industry supports the regular review and further development of the assessment framework.
However, it is essential that any adjustments are based on a sound evaluation of practical experience and carried out in close consultation with industry stakeholders. The introduction of additional indicators or a composite overall rating system should be carefully assessed in order to avoid unintended distortions or additional administrative burdens. Any expansion of the system must explicitly integrate circular economy principles, ensuring that sustainability is measured across the entire hardware lifecycle from resource-efficient production to component reuse. Furthermore, sustainability metrics must extend beyond the physical data centre facility to include the efficiency of data transmission and the optimization of the broader network infrastructure
In parallel, sustainability and resilience must be viewed as inseparable. Across all regulatory measures, the status of data centres as critical infrastructure must be strictly taken into account. Heightened security and availability requirements – particularly concerning critical services – demand a sensitive focus. Energy efficiency targets must never compromise operational security or existing requirements for the digital sovereignty of government IT infrastructures. As data centres and energy systems become increasingly digitalised and interconnected, the modernisation of infrastructure should also take account of security-by-design principles. In particular, the continued use of unsupported or end-of-life equipment in critical environments can create risks that are relevant not only for efficiency, but also for operational resilience and cybersecurity.
At the same time, cost implications, feasibility, and international competitiveness must consistently be taken into consideration.
Overall conclusion
BDI supports the introduction of an EU-wide assessment framework for the energy efficiency of data centres as an important step towards greater transparency and sustainability. However, its success will depend on a practical, technology-neutral, and low-bureaucracy design.
The system should incentivise innovation without introducing rigid requirements or undermining Europe’s competitiveness as a business location. Close involvement of industry stakeholders in the further development of the framework is therefore essential.
Finally, to ensure that the transition remains economically viable, the EU and Member States should also consider targeted incentive mechanisms to support investment in modern, secure and energyefficient data centre infrastructure. Such instruments could complement the rating scheme and accelerate the uptake of best available technologies without relying exclusively on regulatory obligations.
Imprint
Bundesverband der Deutschen Industrie e.V. (BDI) / / Federation of German Industries
Breite Straße 29, 10178 Berlin www.bdi.eu
T: +49 30 2028-0
EU Transparency Register: 1771817758-48
German Lobby Register Number: R000534
Editor Bernardo Jacobs
Trainee
Directorate Innovation, Security and Technology
T: +49 30 20281728
M: B.Jacobs@bdi.eu
Polina Khubbeeva
Senior Expert Artificial Intelligence and Semiconductors
Directorate Innovation, Security and Technology
T: +49 30 20281586
M: P.Khubbeeva@bdi.eu
Philipp Schweikle
Expert Digital Infrastructure and International Digital Policy
Directorate Innovation, Security and Technology
T: +49 30 2028-1632
P Schweikle@bdi.eu
Document number: D 2278