Summary To qualify a data centre as a strategic project under the proposed Cloud and AI Development Act (CADA), an operator would respond to an open call for expressions of interest issued by the European Commission. As proposed, the project must fulfil at least two of five Article 14(1) criteria — such as supporting essential public sector functions, including highly sustainable or innovative features, or addressing a major compute-capacity shortage. The applicant "shall provide all the necessary and relevant information to demonstrate that the project fulfils the relevant criteria" (Article 14(2)) and must substantiate the project's predicted lifetime, which would set the duration of the designation (Article 14(3)).

Detail

CADA (COM(2026) 502 final, a proposal not yet in force) would let the European Commission designate certain facilities as "data centre strategic projects." This status is not automatic; it would be a formal recognition by the Commission. The core rules are in Article 14.

The application mechanism: open calls

As proposed, designation is initiated by the Commission, not by an operator filing at will. 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." Operators would have to monitor for official calls and submit their proposals during those windows.

When responding, the applicant must, under Article 14(2), "provide all the necessary and relevant information to demonstrate that the project fulfils the relevant criteria." The burden of proof would lie with the operator.

Meeting the criteria: the two-of-five rule

To be eligible, a project must fulfil at least two of the five criteria in Article 14(1), as proposed:

  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, public safety and security."
  2. Sustainability or innovation. The project "includes highly sustainable or innovative features, including technologies and solutions developed under Title II."
  3. Grid security and 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."
  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).
  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."

Only two of the five are required, so the same project could rely on different combinations depending on its strengths.

Demonstrating compliance and substantiating lifetime

Meeting the criteria is not enough; under Article 14(2) the operator must rigorously demonstrate compliance with a detailed dossier. For example, an innovation claim (criterion 2) would call for detail on the technologies used and how they align with CADA's Title II; a grid-support claim (criterion 3) would call for the relevant system operator's evaluation and specifications of generation or storage. As proposed, the regulation does not prescribe a fixed evidence list, so these are natural categories rather than mandatory items.

Article 14(3) places a specific obligation on the applicant: the duration of the designation "shall be based on the predicted lifetime of the project," and the applicant "shall include in the proposal the information necessary to substantiate the predicted lifetime of the project." The Commission would set the duration on that basis — so operators cannot simply request an indefinite status.

Withdrawal of status

Strategic status would not be permanent if conditions change. Under Article 14(4), the Commission "may withdraw the designation of that project by means of a decision" where the 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," creating a strong incentive for accurate applications and ongoing compliance.

What this means for you

For data centre operators and cloud service providers, the path to strategic-project status would be competitive and evidence-heavy:

  1. Monitor Commission calls. Designation runs through open calls (Article 14(1)); missing a call means waiting for the next.
  2. Audit your project against the five criteria. Before a call, assess whether you can clearly demonstrate at least two. If relying on criterion 5, line up data from the Commission's Article 15 monitoring; if relying on criterion 4, have supply-chain documentation ready.
  3. Prepare robust evidence. Article 14(2)'s "necessary and relevant information" standard means vague claims will not suffice; prepare dossiers covering sustainability metrics, grid-integration plans and supply-chain origins.
  4. Model your lifetime accurately. Develop a credible, substantiated projection of the project's lifetime (Article 14(3)); it would define how long you benefit from the status.
  5. Plan for ongoing compliance. Because status can be withdrawn (Article 14(4)), build in mechanisms to maintain compliance with the criteria you relied on.

Common misconceptions

  • "I can apply anytime." No. As proposed, you must respond to an open call for expressions of interest issued by the Commission (Article 14(1)); it is not a continuous portal.
  • "Meeting one criterion is enough." No. Article 14(1) requires "at least two" of the listed criteria.
  • "Strategic status is permanent." No. Its duration is tied to the substantiated predicted lifetime (Article 14(3)), and the Commission may withdraw it under Article 14(4).
  • "Only large hyperscalers can qualify." The criteria do not exclude smaller or brownfield projects; the focus is on the project's contribution against at least two criteria, not the operator's size. The emphasis on "deployment" and "establishing infrastructure" does point toward new or significantly expanded capacity.

Related

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