Summary As proposed in the Cloud and AI Development Act (CADA), the Commission may designate a data centre project as a "strategic project" by decision, selecting from projects that respond to an open call for expressions of interest and meet at least two of five criteria in Article 14(1) — such as supporting essential public sector functions, adding highly sustainable or innovative features, contributing to electricity-grid stability, strengthening Union supply chains, or addressing a major compute-capacity shortage. The applicant must substantiate the project's predicted lifetime, because that determines how long the designation lasts (Article 14(3)). The Commission can withdraw the designation if the criteria cease to be met or the application contained incorrect information (Article 14(4)).

Detail

Under CADA, as proposed, designating a data centre as a "strategic project" is a centralised mechanism to support infrastructure that delivers Union added value. It is governed by Article 14.

The designation mechanism: open calls

The Commission holds the power to designate by decision. This is not an automatic status based on size or location; it is selective and is initiated through open calls for expressions of interest. Under Article 14(1), the Commission may designate a project that fulfils at least two of the five listed criteria — so the criteria are alternatives, and a project need not satisfy all of them, but it must satisfy no fewer than two.

The five criteria

A project must meet at least two of the following (Article 14(1)(a)–(e)):

  1. Essential public sector functions. The project establishes and operates infrastructure that directly supports and enhances essential public sector functions, including research and education, healthcare, and public safety and security.
  2. Sustainability or innovation. The project includes highly sustainable or innovative features, including technologies and solutions developed under Title II (the Cloud and AI Leadership Initiatives).
  3. Grid security and stability. The project contributes to the security, safety and stability of the electricity grid and to electricity-system needs as evaluated by the relevant system operator — particularly for projects co-locating large clean-energy generation and storage.
  4. Union supply chains. The project supports integrating chips, processors and accelerators, servers or quantum computers designed and/or manufactured in the Union, strengthening the Union semiconductor, quantum and data centre supply chains and contributing to the objectives of CADA and of Regulation (EU) 2023/1781 (the Chips Act).
  5. Capacity shortages. 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.

Substantiating the predicted lifetime

Article 14(3) requires that the duration of the designation be based on the project's predicted lifetime, and that the applicant include in its proposal the information needed to substantiate that lifetime — on the basis of which the Commission sets the duration. This ties the strategic status, and any benefits attached to it, to the infrastructure's actual operational lifespan.

Application requirements

Under Article 14(2), the applicant must provide all the necessary and relevant information to demonstrate that the project fulfils the relevant criteria. The evidentiary burden is on the applicant: claims of compliance must be backed by technical, environmental and economic data. A project relying on grid stability (criterion 3) would, for instance, typically need assessments from the relevant system operator; one relying on Union-manufactured hardware (criterion 4) would need supply-chain documentation.

How a strategic project sits within the data centre measures

Article 14 does not stand alone; it is the apex of CADA's data centre provisions in Title III. Most facilitation flows from being located in a data centre acceleration zone designated by a Member State (Article 10), within which conditions on sustainability and fair, reasonable and non-discriminatory resource use apply (Article 11), a single information point assists operators (Article 12), and permitting is streamlined — including a permit-granting limit that, as proposed, must not exceed 12 months (Article 13). Strategic-project designation under Article 14 is a distinct, Commission-led status layered on top of that framework: it identifies projects of particular Union value, and the criteria deliberately reach beyond a single zone to grid, supply-chain and capacity-gap considerations. When you plan, treat zone-based facilitation and strategic-project designation as two separate tracks that can reinforce each other rather than as a single application.

The role of the capacity gap (Article 15)

Criterion 5 ties directly to Article 15, under which the Commission monitors the compute capacity available in the Union, the volume of demand, and the size of the capacity gap and underserved areas — areas that may then be used as acceleration zones. If you intend to rely on criterion 5, your proposal should locate the project against this monitoring: identify the specific shortage your project addresses and the area concerned, and substantiate the significant contribution to local economic growth that the criterion also requires. A project sited in an area the Commission has not identified as underserved will find this criterion harder to make out, and may need to rest its case on two of the other four criteria instead.

Withdrawal of designation

Strategic status is not irrevocable. Under Article 14(4), the Commission may withdraw the designation by decision where the project no longer fulfils the relevant criteria, or where the designation was based on an application containing incorrect information affecting compliance. On withdrawal, the project loses all rights connected to that status under CADA — a strong incentive to keep the application accurate and the project compliant.

What this means for you

For CTOs, architects and SMEs planning large data centres, strategic-project designation can open a path to accelerated treatment and support, but it requires substantial upfront preparation.

  1. Engage system operators and suppliers early. For criterion 3, assess your grid contribution with the relevant system operator; for criterion 4, secure agreements with EU-based manufacturers of chips, processors or servers and document them.
  2. Lean on Title II innovations. Criterion 2 references technologies developed under Title II, so projects incorporating EU-supported innovations in energy efficiency, cooling or AI-optimised hardware are well placed. Track the Commission's Title II calls.
  3. Build a robust lifetime substantiation. Do not underestimate Article 14(3): provide a credible, evidence-based prediction of operational lifetime (hardware longevity, support cycles, environmental durability). A vague estimate risks a shorter designation or rejection.
  4. Monitor open calls. Designation occurs in response to specific open calls, so watch the Official Journal and Commission announcements and have your dossiers ready.
  5. Show local economic impact. For criterion 5, in an underserved area, evidence how the project drives local growth — job creation, local procurement, partnerships with educational institutions.

Common misconceptions

"Any large data centre can apply at any time." No. There is no standing portal; designation follows a specific open call for expressions of interest. You respond to a call rather than apply at will.

"Meeting one criterion is enough." No. Article 14(1) requires at least two of the five. A highly innovative project that meets no second criterion does not qualify.

"The designation is permanent." No. Its duration tracks the predicted project lifetime as substantiated by the applicant (Article 14(3)), and the Commission can withdraw it where the criteria cease to be met or the application contained incorrect information (Article 14(4)).

"It guarantees funding." No. Designation does not itself provide funding; actual support depends on separate programmes and national aid decisions. The proposal addresses the framework, not specific cash grants.

"It applies only to new builds." The text speaks of "projects" and of infrastructure that "establishes and operates," with criterion 5 oriented to compute-capacity shortages, so the emphasis is on new capacity. Whether a significant expansion qualifies would turn on whether it meets at least two criteria — assess that against Article 14(1) rather than assuming.

Related

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