Europe puts a data centre energy label on the grid, California sends the bill

The European Commission proposed a mandatory A-to-G sustainability label for data centres, with the first labels expected to appear in 2027. The delegated regulation, published Monday, requires operators of facilities of 500 kW or more to disclose how efficiently they use energy and water, how clean their electricity is, and whether they can hand waste heat back to the local grid — plus information on how their water use sits against water stress in the area. Smaller sites can adopt the label voluntarily. It does not cap consumption or force operators to publish total power use, and EU governments and the European Parliament have two months to object before it enters into force, with the rules applying from August 2027.

The stakes are arithmetic. Data centres already draw around 2.5% of EU electricity, capacity is expected to more than double to 28 GW by 2030 from 12 GW last year, and Brussels wants to triple data centre capacity over seven years to keep pace on AI. Energy Commissioner Dan Jørgensen was explicit that Monday's label is stage one: minimum performance standards, which the Commission wants to present in spring 2027, "will put more pressure on those who may not voluntarily wish to be as sustainable as we want them to."

The uncomfortable number is 36%. That is the share of EU sites that currently disclose what existing energy-efficiency rules already require of them, per an accompanying Commission report — so a rating built on self-reported figures is only as strong as the reporting underneath it. A Commission document seen by POLITICO suggested around 20% of Europe's data centres could land at the bottom of the scale. Industry is already pushing back: the European Data Center Association warned earlier this year the requirements would kill investment, and CCIA said the scheme "overlooks engineering and geographic realities."

Governor Gavin Newsom signed seven bills ordering California's data centres to report water and electricity use — and to pay for the grid and water upgrades they need. The package covers reporting (AB 1577), water-use disclosures and water resources (AB 2469, AB 2619), and electricity cost allocation (AB 2383, SB 886, SB 1168), which routes transmission, distribution and generation costs onto data-centre customers instead of ordinary ratepayers. SB 887 strips data centres of blanket environmental exemptions: they must show state standards on energy, water and fuel use are met before any judicial streamlining. Newsom framed it as a split with Washington — "we are ensuring that Californians remain in the driver's seat — and that those profiting from data centers aren't doing so at our expense."

Note the difference in instrument. Europe is grading; California is billing. Both land in the same place, because the political pressure is identical: we covered the local opposition that blocked $68 billion of US data centres in one quarter this morning, and 61% of Americans now oppose local data centres. Washington's answer so far has been a House bill to make data centres pay their own power costs — the 417–3 vote — and deregulation from the White House. The states and the EU are filling the gap. For the wider context on why this fight has numbers attached, our explainer on how much power AI actually uses is the background.

What to watch: whether member states object within the two-month window, and whether spring 2027 brings binding thresholds rather than labels.

Should an energy label decide where the next data centre goes, or should the community next door get a veto? Tell us in the comments.