European Commission's proposed data center efficiency labeling scheme receives industry pushback that the framework requires nuance and adjustment.

The European Commission's Data Centre Energy Efficiency Package, formally launched last week, introduces a common rating scheme for data centers exceeding 500kW capacity. The scheme would assess facilities based on energy and water efficiency metrics while accounting for grid balancing support, waste heat recovery contributions, and renewable energy use. Leaders of European data center associations have given cautious welcome to the plan, though they warn it must be designed fairly and not undermine the continent's competitiveness.

Data centers already report much of this information under the EU's Energy Efficiency Directive. With Europe targeting to triple its data center capacity over five to seven years through initiatives including AI gigafactories, residents across the bloc have grown concerned about power and water consumption. The proposals follow accusations that several major data center operators used EU secrecy provisions to block public access to environmental impact data.

At the European Data Center Associations summit in Zagreb last week, industry leaders reflected on the scheme. Stijn Grove, managing director of the Dutch Data Center Association, likened it to efficiency stickers on consumer appliances. "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," he said.

Grove highlighted the challenge of fair comparison across Europe's varied conditions. "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."

Michaël Reffay, managing director of France Datacenter, supported the scheme's transparency benefits. "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," he said. Reffay emphasized avoiding asymmetries and protecting intellectual property: "This label should not force private and industrial stakeholders to disclose intellectual property or any kind of secret business. But overall, it makes sense."

Isabelle Kemlin, vice chair of the board of Swedish Datacenter Industry, welcomed the rules as proof of progress. "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." She noted the scheme would counter the perception of data centers as a "black hole," adding: "Tremendous efforts are being put into making data centers more sustainable, no matter if they are in Portugal or Sweden."

Ronan Kelly, CEO of Digital Infrastructure Ireland, acknowledged the industry's traditional reliance on secrecy for security but urged balance as data centers become central to AI expansion. "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 can submit input through an EC call for evidence closing in December. The scheme undergoes two months of scrutiny by the European Parliament and Council before entering force, allowing co-legislators to object though not amend. If approved, first ratings are expected in 2027, with an initial review by the end of 2028.