Legislation and policies in progress
Introduction
Data centers are infrastructures that host servers for digital services (Google, Microsoft, Meta, Amazon, etc.).
Electricity consumption: they account for approximately 1.5% to 2% of global electricity consumption (according to IEA – 2023). With the growth of generative AI, this figure could double by 2030.
Water consumption: many centers use evaporative cooling systems → this implies large volumes of freshwater. For example, a large facility can consume millions of liters per day.
The perceived imbalance lies in the competition with human needs (water for population or agriculture).
Stakeholder positions
Industry (Big Tech)
- They argue that their data centers are becoming increasingly efficient.
- They invest in renewable energy and some pledge to be water positive (returning more water than they consume) before 2030.
- They claim that AI and digital services also provide solutions for the ecological transition.
Government and regulators
- Some countries and regions (Netherlands, Ireland) have imposed moratoria or limits on new data centers due to their impact on the power grid and water resources.
- The EU is preparing regulations under the Green Deal to measure and reduce the footprint of data centers.
Civil society
- There are frequent protests against new facilities in drought-prone areas (for example, California or Catalonia).
- They demand greater transparency in consumption data and environmental responsibility.
Energy and sustainability experts
- They stress that digital demand is growing much faster than achieved efficiency gains.
- They warn that AI and high-quality streaming are the main consumption accelerators.
Proposed options and solutions
- Efficiency improvements: free-air cooling, liquid immersion, reuse of waste heat.
- Strategic location: placing data centers in cold regions or areas with abundant water and renewable energy.
- 100% renewable energy: corporate commitments to power facilities exclusively with solar, wind, or hydro.
- Water recycling and return: treatment systems that reduce potable water extraction.
- Regulation: efficiency caps (e.g. PUE < 1.2), mandatory publication of consumption data, and local compensations.
- Alternative technologies: leveraging edge computing to reduce reliance on large-scale facilities.
Where we stand
- Transition underway: major companies announce sustainability targets, but there is still no binding global standard.
- Intense debate: regulators and communities are increasing pressure, especially in Europe and the US.
- Risk: the AI boom may offset efficiency gains achieved so far.
- Trend: growing demands for transparency and mandatory regulation rather than self-regulation.
Legislation and policies in progress
- EU Energy Efficiency Directive (Energy Efficiency Directive, revised EED)
- Establishes obligations to monitor and report data center energy performance. Energy Efficiency Directive
- There is regulation that incorporates performance indicators (KPIs) also for the water footprint and sustainability. Ibis
- Requirement (from a certain date) to reuse or recover waste heat in new operations. The Energy Efficiency Directive 2024/1791 (“EED”)
- EU Energy Efficiency Directive (Energy Efficiency Directive, revised EED)
- Climate Neutral Data Centre Pact (Europe)
- It is an industry initiative, supported by the EU. Signatories commit to achieving a certain level of climate neutrality by 2030. Wikipedia [Wikipedia contributors. (2025, May 2). Climate Neutral Data Centre Pact. In Wikipedia, The Free Encyclopedia. Retrieved September 18, 2025, from https://en.wikipedia.org/w/index.php?title=Climate_Neutral_Data_Centre_Pact&oldid=1288376148]
- It includes targets such as: energy efficiency, 100% renewable energy, reuse/refurbish and recycle equipment, water conservation (although some water targets are not yet fully defined). Wikipedia [Ibis]
- Climate Neutral Data Centre Pact (Europe)
- Transparency and reporting
- The EU increasingly requires data centers to publicly report energy and water consumption. For example, the EED directive requires reporting certain indicators. European Parliament
- European Parliament requests such as an “Answer in writing” asking for publication of water and energy consumption information are examples of political pressure and social demand. European Parliament
- Transparency and reporting
- Regulations in other countries / regions
- Recent example: Australia, especially New South Wales (Sydney), where data center projects have been approved with poorly measurable commitments to reduce water use. Political and public criticism. Reuters
- Future EU legislation could include minimum performance standards (PUE, water use, heat recovery, etc.). datacenterknowledge.com
- Regulations in other countries / regions
Projects and technologies of interest
Quincy Water Reuse Utility (Washington, USA)
Microsoft and the city of Quincy collaborated to build a facility that treats water used for cooling so it can be reused locally, reducing reliance on potable water. US EPA
Veolia – Data Center in Illinois
A project to reduce water and chemical consumption through specialised treatments and optimisation of the cooling-water cycle. watertechnologies.com
Project Natick (Microsoft)
An experiment with underwater data centers, leveraging naturally cold water temperatures for cooling. It provided indications of viability under certain conditions, although it has recently been said that the project is no longer active. Wikipedia
iDataCool (University of Regensburg + IBM / InvenSor)
Research on a cluster cooled with hot water (hot water cooling) and reusing waste heat. The goal is to improve overall efficiency and reuse thermal energy. Wikipedia
Circular water solutions
There are initiatives to use wastewater, rainwater, recycle cooling water, closed-loop systems, etc. Some of these can save between 50% and 70% of water use if applied well. World Economic Forum
Multi-objective optimisation frameworks
Academic examples such as MOSAIC or SHIELD that attempt to simultaneously optimise energy cost, carbon footprint, and water use by distributing workload locally and temporally (“workload distribution”). arXiv+1
Arguments
In favour
- Digital services are essential: activities such as streaming, telemedicine, AI, etc. → data center infrastructure is key to the functioning of modern society.
- Continuous technical improvements: new cooling approaches, economies of scale, more efficient designs, etc.
- Potential to reuse large amounts of waste heat, if done well, for district heating or industrial processes.
- Regulatory policies, corporate commitments, and public awareness are advancing, which could force more sustainable practices.
Against
- Rising consumption with the expansion of AI, streaming, the Internet of Things, etc. can mean that any efficiency gains are outpaced by growth (“rebound effect”).
- Water scarcity: many facilities are built in areas already under water stress or experiencing drought, and water infrastructure may not support the increase.
- Insufficient transparency: water-use commitments are often vague (“moderate reduction”, “recycled water”) and without clear or public indicators.
- Cost and profitability: certain more sustainable technologies (immersion cooling, liquid cooling, closed-loop systems, water reuse, etc.) can cost more upfront, or require capital that not all companies want or can invest.
- Secondary environmental impacts: for example, if the electricity powering the facility comes from non-renewable sources, or if local impacts of tapping wastewater affect ecosystems or communities.
Where we are
- There is already a strong trend towards stricter regulation, driven mainly by the EU, but also by citizen and environmental pressure.
- The use of transparency indicators is becoming increasingly common, and the public and governments want data: how much water, how much energy, what the real efficiency is (not only theoretical).
- Looking at global examples, there is strong interest in water recycling/reuse, alternative cooling technologies, and locations that enable lower water and energy use for cooling (cold climates, proximity to renewable sources).
- But there is a risk that a lot of new infrastructure will be built without ensuring it meets high environmental standards, especially in countries with looser regulation or in water-scarce regions, leading to social/environmental conflict.
