New European Commission consultation offers data centres chance to shape AI and energy policies

The surge in the use of AI has seen the demand for new data centres soar. But the processing power required for such technologies consumes huge amounts of energy and water, leading to concerns about environmental impact, the strain on local infrastructure and even rising household bills. Can a new European Commission consultation find a way to balance the need for progress with ever-stricter sustainability goals?

The EC’s public consultations on the Strategic Roadmap for digitalisation and AI in the energy sector are a key development for businesses involved in the data centre lifecycle.

But some communities are raising concerns about new developments, including the threat to greenbelt land, noise pollution, traffic congestion and the potential to drive up household bills by putting further pressure on already-troubled water and power suppliers.

How will the roadmap help?

Data centres must navigate a complex landscape of regulations related to energy efficiency, environmental impact, and data security. For data centre operators, a policy vacuum across Europe can hamper site selection and operation, leaving them to struggle with inconsistent planning and environmental policies.

The roadmap is expected to provide clear guidelines on improving energy efficiency in data centres, as well as including requirements for comprehensive Environmental Impact Assessments for new data centre projects. This will ensure that developments are sustainable while helping reduce operational costs and environmental impact.

The roadmap may also introduce polices supporting the use of renewable energy sources such as solar and wind power, as well as upgrading infrastructure to handle increased energy demands and ensure power supply remains reliable – both for the centre and the surrounding areas. A key aspect is likely to be exploring the potential for using digital technology to reduce energy use.

“Some existing centres are already exploring new processes, such as immersion cooling technology, which uses less energy and requires less space. The roadmap is likely to place significant emphasis on the use of digital technologies such as AI and IoT, which can monitor and manage energy consumption more effectively, optimising energy use and improving operational efficiency.”

Matthew Sharkey, Associate Director at Osborne Clarke

The roadmap should cover many topics of relevance to anyone involved in data centres. Romeo Szejnmann, partner at Osborne Clarke, looks forward to a range of guidance that can help businesses balance their commercial imperatives with sustainability goals.

“This could include insights on financing options for sustainable data centre projects, including green bonds and loans, guidance on navigating planning policies and environmental regulations for new data centre sites – including understanding location-specific restrictions and obtaining necessary permits – as well as best practices for enhancing energy efficiency and reducing carbon footprint during day-to-day operations.”

Romeo Szejnmann, partner at Osborne Clarke

But such progress may flounder if operators, councils and other regulators fail to address community concerns. Local opposition can stall – or even derail – developments, increase costs and risk reputational fallout.

Osborne Clarke offers the following tips to minimise such conflicts:

• Environmental Impact Assessments (EIAs): Conduct thorough EIAs and implement mitigation measures where necessary to ensure data centre projects align with local and international environmental standards.
• Prioritise community relations: Engage early and often with local stakeholders to address their concerns and ensure that developments benefit the community.
• Embrace transparency: Provide accurate and detailed information about energy consumption, environmental impact, and efforts to reduce carbon footprint. Clear communication about sustainability efforts and compliance with regulations will help avoid accusations of greenwashing.
• Adopt ethical practices in the procurement and use of resources, including rare earth elements and water. Ensure that suppliers adhere to sustainability and human rights standards and that this is clearly communicated to stakeholders.

Environmental concerns aside, energy is expensive – for commercial reasons alone, data centre operators are increasingly seeking solutions to reduce their consumption and will continue to do so. Technologies such as AI may be driving the surge in data centre numbers, but they could also offer the solutions to the problems such expansion creates.

Our specialist data centre team has a deep understanding of the data centre lifecycle and its strategic importance globally. We advise owners, operators, funders and end-users on the commercial, regulatory, financial, development and power-related aspects of their strategies. Our experience includes guiding leading technology and media clients on their global data centre networks, addressing data privacy and cybersecurity, managing cross-border regulatory risk, and the legal complexities of data centre services — from managed services and physical infrastructure to strategic builds. We also work closely with clients on legal issues around energy efficiency and ESG compliance, and have supported significant acquisitions and strategic investments in data centre infrastructure and data-driven business models.