New Sustainability Reporting Requirements for Data Centers in the EU

In March this year, the European Commission adopted the Delegated Act on a common rating scheme for data centers ("Delegated Act") in the European Union ("EU"). The Delegated Act implements the Energy Efficiency Directive ("EED") and details the energy key performance indicators ("KPI") that data center operators must report to the European database on data centers ("European database"), how to calculate them, and to what extent this information will be publicly disclosed.

The reporting may take place via the national reporting scheme if the Member State where the reporting data center is located has established such a scheme, or directly to the European database via the interface platform that the Commission must create.

While the majority of the Member States have not yet transposed the EED, the Delegated Act is directly applicable in all EU Member States. This means that data center operators that are not already required to report in their Member States must report directly to the Commission the relevant information on their data centers by September 15, 2024.

Below, we look closer at what information data center operators will need to gather, who will need to report, to what extent this will be treated as confidential, when the reporting will need to take place, and refer to some examples of Member States that have already adopted similar reporting requirements to implement the EED.

The Energy Efficiency Directive

The EED requires the European Commission to establish a European database on data centers to which owners and operators of data centers with a power demand of the installed information technology of at least 500kW must report:

1. the contact details of the data center, its operator and owner;
2. the floor area, installed power, annual incoming and outgoing data traffic, and amount of data stored and processed within the data center; and
3. the KPIs during the last calendar year including energy consumption, power utilization, temperature set points, waste heat utilization, water usage and use of renewable energy.

The Delegated Act lists in detail the KPIs that must be submitted to the database, how they should be calculated, and the requirements on which KPIs must be made publicly available as an aggregated value. At the time of writing, the European Commission has not made publicly available the platform interface to report to the database or any other related guidance.

Information Requirements in the Delegated Act

The KPIs that must be reported to the European database are listed in Annex I and II to the Delegated Act. Annex I details the general information that must be reported, including name of the data center, its operator and owner; contact details; location; type of data center (e.g., enterprise, co-location, co-hosting); electrical infrastructure redundancy level; and total number of racks.

Annex II lists the more detailed data points that must be reported, some of which are then used to calculate the sustainability indicators listed in Annex III. In total, Annex II lists twenty-four separate data points. The data points that are used to subsequently calculate the sustainability indicators include the total energy consumption of the data center, total energy consumption of information technology equipment, total water input, waste heat reused, and total renewable energy consumption.

Annex III to the Delegated Act lists the sustainability indicators that must be calculated per data center on the basis of the information and KPIs of Annex I and II reported by the data center operators. The sustainability indicators include the power usage effectiveness; water usage effectiveness; energy reuse factor; and renewable energy factor.

Annex IV lays out which data the European database must make publicly available at an aggregated level at both the Member State and EU level. This data includes the number of data centers; distribution per size category; average power usage effectiveness; average water usage effectiveness; average energy reuse factor; and average renewable energy factor. Annex IV also differentiates between the size of different data centers.

Who Must Report?

The Delegated Act requires that data center operators in scope report to the European database the information and KPIs set out in Annex I and II to the Delegated Act per data center they operate. The definition of "data center operator" includes the following categories:

• Enterprise Data Centre Operators: individuals or entities responsible for managing an enterprise data center and its IT services. An enterprise data center is a data center operated by an enterprise for its own IT needs.

• Colocation Data Centre Operator: entities that manage and sell space and security in a colocation data center for customers to operate their own IT setups. A colocation data center is a facility where customers install and manage their own IT equipment and services.

• Co-Hosting Data Centre Operator: Individuals or entities that manage a co-hosting facility, providing both the physical infrastructure and some IT services to customers. A co-hosting facility is a data center that provides customers access to shared IT resources and support infrastructure, while allowing them to run their own services and applications.

Who Will See the Information?

Both the EED and the Delegated Act recognize the potentially sensitive nature of the information that must be submitted to the European database and provide for confidentiality safeguards. First, the Delegated Regulation only allows the Commission to disclose the data of Annex IV aggregated at a Member State and EU level.

Second, Article 5(5) of the Delegated Act requires the Commission and Member States to keep confidential all the information (i.e., Annex I and Annex II) submitted to the database. As the Delegated Act allows for the information to be submitted via the European database or any national reporting systems, this should mean that where national reporting systems require the reporting of the information, the Member State authorities must also ensure its confidentiality because the confidentiality obligations of Article 5 are directly applicable in all Member States.

Third, to ensure confidentiality and prevent anti-competitive behavior, Article 3(3) of the Delegated Act allows colocation data center operators to gather the KPI of Annex II from their colocation customers, if necessary, "by setting up an anonymous internal reporting mechanism." As indicated above, the Commission has not yet issued guidance on how this internal reporting mechanism should work.

When is it Due?

By 15 September 2024, then by 15 May 2025, and every year thereafter, reporting data center operators will have to report to the European database the information and KPIs regarding the data center they operate.

National Implementation

So far, only a few Member States that have also transposed the EED have established a national reporting scheme, but this may increase as more Member States transpose the Directive. Examples of current national reporting mechanism are those in Austria and Germany.

Public link

Please use the above public link if you want to share this noodl on another website.