Summary Under the proposed Cloud and AI Development Act (CADA), there would be no open-ended application window for data centre strategic project status. Instead, the Commission would issue open calls for expressions of interest, and operators would respond to those calls (Article 14(1)). To be designated, a project must fulfil at least two of the five criteria in Article 14(1), and under Article 14(2) the applicant "shall provide all the necessary and relevant information to demonstrate that the project fulfils the relevant criteria." Designation would last for the project's predicted lifetime (Article 14(3)) and could be withdrawn if criteria stop being met or the application contained incorrect information (Article 14(4)).

Detail

CADA — COM(2026) 502 final, a proposal that is not yet in force — would let the Commission designate certain data centre projects as "strategic projects" to help raise the Union's compute capacity, reduce dependence on third-country providers, and support sustainable infrastructure deployment. For operators, the procedural mechanics matter as much as the criteria.

The application mechanism: open calls

The process, as proposed, would not be a continuous, open-door system. Under Article 14(1), the Commission "may, by means of a decision, designate as strategic projects, data centre projects selected through open calls for expressions of interest." In practice this means operators could not submit at any time; they would have to monitor for an official call and respond within it. When a call is published, eligible projects would submit an expression of interest, which the Commission would then assess against the Article 14 criteria.

Meeting the criteria

To be designated, a project must fulfil at least two of the five criteria in Article 14(1). As proposed, these are:

  1. Public-sector support — the project "establishes and operates infrastructure that directly supports and enhances essential public sector functions, including research and education, healthcare, public safety and security" (Article 14(1)(a)).
  2. Sustainability or innovation — the project "include[s] highly sustainable or innovative features, including technologies and solutions developed under Title II" (Article 14(1)(b)).
  3. Grid stability — the project "contributes to the security, safety, and stability of the electricity grid and contributes to the electricity system needs as evaluated by the relevant system operator, in particular for projects involving the colocation of large clean energy generation and storage facilities" (Article 14(1)(c)).
  4. EU supply-chain integration — the project "supports the integration of chips, processors and accelerators, servers or quantum computers designed and/or manufactured in the Union," strengthening Union semiconductor, quantum and data centre supply chains and contributing to the objectives of CADA and of Regulation (EU) 2023/1781 (the EU Chips Act) (Article 14(1)(d)).
  5. Capacity shortage — the project "addresses a major shortage of compute capacity in an area identified as having such a shortage under Article 15 and contributes significantly to the growth, development and promotion of the local economy" (Article 14(1)(e)).

The applicant's burden of proof

Asserting that a project meets the criteria would not be enough. Article 14(2) provides: "In its proposal, the applicant shall provide all the necessary and relevant information to demonstrate that the project fulfils the relevant criteria."

In responding to a call, an operator would therefore need a substantiated dossier. Depending on which criteria are claimed, that could include technical specifications evidencing sustainability or innovation features; evidence of integration with EU-designed or EU-made hardware; the relevant system operator's evaluation of grid contributions; data on location in an Article 15 shortage area and projected local-economic impact; and documentation of arrangements with public-sector bodies. The proposal does not prescribe a fixed evidence list, so these are the natural categories rather than mandatory items.

Duration and withdrawal

Designation would not be permanent by default. Under Article 14(3), its duration "shall be based on the predicted lifetime of the project," and the applicant must include the information needed to substantiate that predicted lifetime — the Commission would set the duration on that basis.

Under Article 14(4), the Commission could withdraw the designation, by decision, where a project "no longer fulfils the relevant criteria" or where the designation "was based on an application containing incorrect information affecting compliance with those criteria." A withdrawn project "shall lose all rights connected to that status under this Regulation." Accuracy in the original application would therefore be essential.

What this means for you

As proposed, strategic project status would be a real opportunity but would demand proactive engagement and rigorous documentation.

1. Monitor for calls. Because applications would run only through open calls for expressions of interest (Article 14(1)), watch the Commission's official channels — missing a call means missing that cycle.

2. Prepare the dossier in advance. Do not wait for a call to start gathering evidence. Begin documenting sustainability metrics, hardware supply-chain origins, and grid-integration plans now, along with any third-party validations (for example, a system operator's grid assessment) needed to prove at least two criteria.

3. Align with EU strategic goals. Prioritise energy efficiency, use EU-designed or EU-made hardware where feasible, and consider locations with identified Article 15 capacity gaps. Contributions to public-sector resilience or local economic growth strengthen a case.

4. Keep claims accurate. Because the Commission could withdraw status for incorrect information (Article 14(4)), make sure every claim is substantiated and verifiable.

5. Use single information points. Designation is a Commission process, but deployment in an acceleration zone is supported by national single information points (SIPs). Under Article 12(1), an operator has the right, on request, to be assisted by a SIP throughout the project's lifecycle for authorisations, and under Article 12(3) the SIP "shall assist in assessing whether a data centre project may qualify as a strategic project under Article 14." Article 12(4) also directs SIPs to pay particular attention to SMEs. Engaging your national SIP early can help align permitting with a strategic-project application.

Common misconceptions

"You can apply at any time." No. Article 14(1) ties the process to "open calls for expressions of interest" issued by the Commission; you would have to wait for a call.

"Meeting one criterion is enough." No. Article 14(1) requires "at least two" of the five criteria; one alone, however strong, would not suffice.

"Strategic status guarantees funding." Designation itself would not grant funding. Recital 42 of the proposal notes that Member States "may, without prejudice to Articles 107 and 108 TFEU, apply support measures in a proportionate manner" to strategic projects — so the status could open the door to support, but subject to EU state-aid rules and any separate funding procedures.

"The status is permanent." No. It would be tied to the project's predicted lifetime (Article 14(3)) and could be withdrawn under Article 14(4).

"Only large hyperscalers can apply." The criteria do not exclude smaller operators. A smaller project meeting at least two criteria — for example addressing a local capacity shortage with innovative sustainable technologies — would be eligible; the focus is on the project's contribution, not the operator's size.

Related

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