Does CADA set environmental standards for data centres in zones?

As proposed, the Cloud and AI Development Act (CADA) would require Member States to apply consistent sustainability standards to data centres in designated

Summary As proposed, the Cloud and AI Development Act (CADA) would require Member States to apply consistent sustainability standards to data centres in designated acceleration zones. Under Article 11(1), when setting those requirements they "shall use" the key performance indicators specified in Delegated Regulation (EU) 2024/1364 (Annex II, points (a) to (n)) under the Energy Efficiency Directive — rather than creating new, fragmented national rules. The aim is harmonised environmental standards that support the Union's climate goals and prevent a regulatory "race to the bottom."

Detail

CADA, COM(2026) 502 final, is a proposal to strengthen Europe's cloud and AI ecosystem by addressing compute-capacity shortages and reducing dependence on third-country providers. To stop accelerated deployment from undermining environmental integrity, CADA attaches sustainability conditions to "data centre acceleration zones."

Harmonised standards via key performance indicators

The core mechanism is Article 11(1). When Member States set sustainability requirements for data centres deployed in acceleration zones, they "shall use the key performance indicators specified in Delegated Regulation (EU) 2024/1364 pursuant to Directive (EU) 2023/1791 under Annex II, from (a) to (n)."

This is a shift away from purely discretionary national approaches. By referencing Delegated Regulation (EU) 2024/1364 — which establishes the first phase of a common Union rating scheme for data centres — CADA ties zone sustainability standards to the existing EU framework for data centre energy efficiency. That common rating scheme covers metrics relevant to energy and resource performance (for example energy and water efficiency, and waste-heat reuse). Anchoring to a defined Annex II set is what makes "sustainability" measurable and comparable across the Union rather than dependent on vague national definitions; the precise indicators are those listed in Annex II, points (a) to (n), of the delegated regulation.

Supporting Union climate and sustainability goals

The rationale appears in Recital 39 of the proposal, which states that the objective of using these KPIs is to "ensure consistent environmental standards, increase energy efficiency and support the Union's broader climate, environmental and sustainability goals in acceleration zones." Without harmonisation, Member States might adopt divergent requirements, fragmenting the internal market and risking a race to the bottom where laxer standards attract investment at the expense of climate targets. Anchoring to the Energy Efficiency Directive's delegated act aligns deployment with the EU's broader climate and digital objectives.

Integration with designation criteria

Environmental considerations are also built into zone designation. Article 10(1)(h) requires Member States, when designating a zone, to consider "the ability of the site or area to function sustainably, particularly as regards preventing or minimising environmental impacts and supporting the reduction of carbon emissions and its climate resilience." The standards applied under Article 11 thus operationalise the strategic considerations required at the Article 10 designation stage.

Article 11(2) adds a market-fairness layer, requiring that the allocation and use of resources within zones take place on fair, reasonable and non-discriminatory terms, without speculative reservation or foreclosure practices that impede effective competition or the effective development or use of the zones — helping ensure that sustainable infrastructure is actually used by operating data centres.

Relationship with existing law

CADA does not invent new environmental metrics. It leverages the Energy Efficiency Directive (Directive (EU) 2023/1791) and its Delegated Regulation (EU) 2024/1364, which set up the common Union rating scheme for data centres. Cross-referencing this scheme keeps the framework consistent and reduces the compliance burden for operators already familiar with it — while elevating those metrics into a condition for operating within an acceleration zone.

What this means for you

For public-sector officers and procurement authorities, the environmental provisions have several practical implications:

Standardised evaluation criteria. For projects or cloud services in acceleration zones, you can rely on a uniform set of metrics rather than a patchwork of national definitions. The KPIs in Delegated Regulation (EU) 2024/1364 (Annex II) provide an auditable baseline for what counts as sustainable under this framework.
Alignment with Green Public Procurement. Consistent standards support GPP objectives; you can embed the specific KPIs into procurement documentation so public-service infrastructure contributes to the Union's climate goals.
Monitoring and reporting. The Commission monitors the capacity gap under Article 15; in practice authorities may need to track the relevant KPIs for data centres in their zones, so ensure your systems can capture them.
Strategic planning. Because sustainability is a designation criterion (Article 10(1)(h)), plan land, grid connection and water resources with the sustainability requirements in mind from the outset, not as an add-on.

Common misconceptions

Misconception 1: CADA creates new environmental laws. It does not introduce new environmental legislation or new efficiency metrics. It references existing EU law — the Energy Efficiency Directive and its delegated act — and mandates applying those standards within acceleration zones.

Misconception 2: Member States can set their own softer standards for zones. No. Article 11(1) uses the mandatory "shall use." Member States do not have discretion to ignore the KPIs in Delegated Regulation (EU) 2024/1364 (Annex II, points (a) to (n)) for data centres in acceleration zones — a deliberate choice to prevent regulatory arbitrage.

Misconception 3: Standards only apply to new builds. The proposal focuses on deploying new capacity, but Article 11 frames sustainability as a condition within the zone. Data centres operating in a designated zone would be expected to adhere to the specified KPIs, whether newly built or choosing to locate or remain there.

This is general information about a draft EU regulation, not legal advice.