EU advises Big Tech to ensure AI data centers are in line with climate objectives.

      Energy Commissioner Dan Jorgensen has stated that AI companies are welcome in Europe providing they adhere to the bloc’s climate objectives. This admonition arises as a proposed sustainability label for data centres faces delays due to a nuclear energy disagreement, with only 36 percent of data centres having disclosed their energy consumption.

      Jorgensen conveyed to the AI sector, during an interview with Politico, that companies need to prove their dedication to the EU’s energy, climate, and environmental standards if they wish to establish data centres in Europe. This involves endorsing renewable and nuclear energy instead of fossil fuels and effectively recycling the substantial waste heat generated by servers. Jorgensen remarked, “If we utilized just half of the excess waste heat today, we could heat 4 million European homes,” describing the current situation as “unacceptable.”

      This warning comes amidst a surge in AI-driven demand for data centre capacity. The Kiel Institute estimates that EU data centres could use as much as 168 terawatt-hours of electricity by 2030, equivalent to Poland's entire annual consumption. Ireland serves as a notable example, with data centres accounting for around 22 percent of the country's electricity use—the highest per capita globally.

      A report released in May by Beyond Fossil Fuels and Friends of the Earth Ireland indicated that the expansion of data centres led to an additional €715 million incurred by Irish households in electricity costs from 2015 to 2023, with an average household paying €360 more during that time. Denmark has halted all new grid connections due to AI demand overwhelming its clean energy grid. Jorgensen cautioned that if the industry fails to integrate with local energy systems, a political backlash may rise across Europe.

      The European Commission is working on a compulsory sustainability rating for data centres, focusing on energy efficiency, water usage, clean energy consumption, and waste heat recovery. However, this proposal has been postponed following strong opposition from both industry and EU member states. Central to the debate is the classification of nuclear energy; the draft criteria only recognized renewable electricity as “clean,” excluding nuclear despite its minimal carbon emissions.

      Ten member countries, spearheaded by France and Finland, are urging the Commission to acknowledge nuclear as a sustainable energy source for data centres. Some express concerns that penalizing non-renewable but low-carbon energy sources could drive AI investments away from Europe. Initially, the label was supposed to be adopted in the second quarter of 2026, but that timeline has now been pushed back without a new date provided by the Commission.

      Jorgensen also pointed out a significant transparency issue, noting that just 36 percent of data centres mandated to report their energy performance under current EU regulations have done so, raising doubts about the EU’s capacity to oversee an industry it cannot accurately measure. “We require greater transparency because they play a critical role,” Jorgensen emphasized. “It's also in their interest to demonstrate their performance and show they can be part of the solution, not just the problem.”

      The interview took place just before the Commission introduced its European Technological Sovereignty Package on June 3, which includes a Cloud and AI Development Act designed to expand EU data centre capacity threefold within five to seven years. Jorgensen's warnings highlight the conflict between that goal and the bloc’s climate commitments.

      Europe aims to compete with the US and China in AI infrastructure, where projects like Meta’s $200 billion gas-powered Hyperion campus in Louisiana exemplify unchecked expansion. However, Europe also desires that such infrastructure operates sustainably. While some companies are beginning to find methods for repurposing data centre heat, achieving this on a continental scale remains a challenge yet to be addressed by the Commission.