On 21 September 2026, the European Commission (Commission) proposed a delegated regulation establishing a common rating scheme for data centres, intended to increase transparency on resource usage.
The proposed rating scheme is part of the Commission’s broader data centre energy efficiency package and represents a deliverable of the energy efficiency roadmap presented in June 2025. In this article, we summarise the key elements of the proposed delegated regulation, including its scope, elements of the label, the legal framework, and next steps.
Data centres are among the fastest-growing sectors globally, including in the EU, with energy consumption from data centres expected to represent more than 3% of total EU electricity demand by 2030. In addition, emerging digital services and the accelerated adoption of artificial intelligence (AI) are expected to drive further growth. However, the Commission acknowledges that this expansion brings associated environmental challenges, including:
The proposed delegated regulation supplements Directive (EU) 2023/1791, the recast Energy Efficiency Directive (EED), which empowers the Commission to establish a common scheme for rating the sustainability of data centres located in the EU.
The recast EED already requires Member States to mandate data centres to publish information on their energy performance and sustainability. In March 2024, the Commission established a European database on data centres and a reporting scheme through Delegated Regulation (EU) 2024/1364, which defined the first set of key performance indicators (KPIs) and measurement methodologies.
The new proposed delegated regulation represents the next step, setting out rules for how the reported information should be used to rate data centres through electronic labels. It also amends Delegated Regulation (EU) 2024/1364 to introduce further definitions and amend indicators.
For more information on EU climate law and energy transition-related frameworks, refer to this Latham article.
The mandatory rating scheme would apply to all data centres in the EU with an installed information technology power demand of 500 kW or above. Operators of data centres below this threshold or under construction may participate voluntarily, with operators of data centres under construction being required to submit expected KPIs.
In an amendment to Delegated Regulation (EU) 2024/1364, data centres used exclusively for defence and civil protection purposes would be exempt from the reporting and labelling requirements.
The European database on data centres will automatically generate an electronic sustainability label for each reporting data centre based on information and KPIs communicated to the database. As set out in the annexes to the proposed delegated regulation, the label will display:
These KPIs have been identified as the most pertinent to fulfilling the objective of transparency during consultation with stakeholders. The label will need to be accompanied by a document contextualising the KPIs, taking into account national specificities such as climatic conditions.
Whilst many market participants appear to support transparency, some have cautioned against a ratings methodology that may fail to account for differences in operating environments. For example, geographic distortions of water-use metrics may not sufficiently reflect climate differences, although the accompanying document may be used to add additional context.
Labels will be issued annually from 15 August 2027 and will be valid for one year. They will be publicly available in all official EU languages through the European database on data centres and must be made available by operators to any person requesting them.
The Commission emphasises that the rating scheme is designed to impose no additional administrative burden on Member States or data centre operators. Labels will be generated automatically by the European database using data already reported under the existing reporting scheme established by Delegated Regulation (EU) 2024/1364.
Data centre operators within scope must ensure that they communicate accurate and reliable information to the European database and must make the issued label available in electronic form upon request.
Importantly, the proposed obligations under the rating scheme apply to data centre operators rather than owners. This distinction may be relevant where ownership and operational control are separated, such as in the case of data centre lessees.
Notably, the proposed regulation does not appear to introduce a formal mechanism for operators to appeal an assigned rating. Instead, operators are urged to ensure the accuracy of their reported data, with the expectation that labels will reflect the actual performance of the data centre.
The proposed delegated regulation is subject to a two-month scrutiny period by the European Parliament and the Council. During this period, the co-legislators may object to the delegated act but cannot propose amendments to the text. Assuming no objection is raised, the delegated regulation will enter into force 20 days after its publication in the Official Journal. The first sustainability labels for individual data centres are expected to be generated from 15 August 2027.
A first review of the rating scheme is required by 31 December 2028, and every three years thereafter. The review will assess the scheme’s effectiveness and may lead to revisions, such as:
Alongside the rating scheme, the Commission has launched a call for evidence and public consultation on minimum performance standards for data centres operating in Europe. This consultation closes on 14 December 2026 and will inform further measures to promote energy efficiency and sustainability in the sector.
This article was prepared with the assistance of Samantha Banfield and James Thompson at Latham & Watkins.
Latham & Watkins will continue to monitor developments relating to EU data centre sustainability regulation and the broader energy efficiency and ESG landscape.