Summary Under the proposed Cloud and AI Development Act (CADA), data centre operators deploying facilities within designated "acceleration zones" face strict, harmonised sustainability obligations. Article 11 mandates that Member States must use specific key performance indicators (KPIs) defined in Commission Delegated Regulation (EU) 2024/1364 when setting requirements for these zones. This includes mandatory reporting on Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE). Furthermore, the proposal requires operators to plan for waste-heat reuse, prioritise brownfield sites over greenfield locations, and integrate clean energy solutions. These measures aim to triple EU data centre capacity while ensuring environmental sustainability and preventing speculative resource reservation.

Detail

The proposed Cloud and AI Development Act (CADA), COM(2026) 502 final, introduces a targeted framework to accelerate the deployment of data centres across the European Union. While the Act aims to address the critical compute capacity gap, it explicitly ties this acceleration to rigorous environmental standards. For data centre operators, the most significant sustainability obligations are concentrated in Title III (Data Centre Capacities), specifically within the provisions governing data centre acceleration zones.

The Core Mandate: Article 11 and Delegated Regulation (EU) 2024/1364

The cornerstone of the sustainability framework for operators is Article 11 of the CADA proposal. This article removes the discretion of individual Member States to invent their own environmental metrics for data centres in acceleration zones. Instead, it creates a direct legal link to existing EU energy efficiency legislation.

Article 11(1) states verbatim:

"When setting sustainability requirements for data centres deployed in acceleration zones, Member States 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 provision is critical for compliance planning. It means that the KPIs operators must monitor and report are not defined within the CADA text itself but are imported from Commission Delegated Regulation (EU) 2024/1364, which establishes a common Union rating scheme for data centres. This Delegated Regulation implements the Energy Efficiency Directive (Directive (EU) 2023/1791).

The KPIs referenced in Annex II (a) to (n) of the Delegated Regulation include, but are not limited to:

  • Power Usage Effectiveness (PUE): The ratio of total facility energy consumption to the energy consumed by IT equipment. This is the primary metric for energy efficiency.
  • Water Usage Effectiveness (WUE): The amount of water consumed per unit of IT energy processed, crucial for regions facing water scarcity.
  • Carbon Emissions: Including location-based emissions and other environmental impact indicators.
  • Waste Heat Recovery: Metrics specifically tracking the reuse of waste heat generated by IT equipment.

By mandating the use of these specific indicators, CADA ensures that all data centres in acceleration zones are measured against a harmonised, EU-wide standard. Operators must ensure their monitoring infrastructure is capable of capturing and reporting these exact metrics to demonstrate compliance with the sustainability requirements set by Member States.

Site Selection and Infrastructure Planning: Brownfield Preference and Waste-Heat Reuse

While Article 11 governs the operational metrics, the broader framework in Title III imposes obligations on site selection and infrastructure planning that operators must address during the development phase. These obligations are primarily found in Article 10, which outlines the criteria Member States must consider when designating acceleration zones.

Article 10(1) requires Member States to consider several aspects when designating these zones, several of which directly impact an operator's site strategy:

  • Brownfield Preference: Article 10(1)(g) mandates a "preference for reusing brownfield sites over using greenfield sites." This is a strategic directive for operators. When scouting locations for new data centres, particularly those intended to qualify for acceleration zones, operators should prioritise sites that have previously been used for industrial or commercial purposes. This aligns with the EU's circular economy goals and reduces the environmental footprint associated with new construction on undeveloped land.
  • Waste-Heat Reuse: Article 10(1)(e) requires consideration of "available and future facilities that can reuse data centre waste heat." This is not merely a suggestion but a planning requirement. Operators must integrate waste-heat recovery systems into their designs, with the capability to connect to local district heating networks or industrial processes. Failure to plan for waste-heat reuse could disqualify a project from being considered strategically important or hinder its approval within an acceleration zone.
  • Clean Energy and Grid Integration: Article 10(1)(b) requires Member States to consider "available and future power grid capacity and the possibility and conditions for on-site storage and clean energy generation." Operators must prepare for:
    • Clean Energy Procurement: The proposal encourages the use of clean energy. Recital 38 notes that Member States should promote Power Purchasing Agreements (PPAs) to provide long-term price stability and enable the procurement of clean electricity at scale.
    • Grid Friendliness: Operators must demonstrate that their data centres will not stress the local energy supply. This includes planning for on-site energy storage and clean energy generation where feasible.

Preventing Speculative Reservation: Article 11(2)

Sustainability under CADA also encompasses the efficient use of resources to prevent market distortion. Article 11(2) adds a crucial procedural obligation:

"Member States shall ensure that the allocation and use of resources within acceleration zones takes place on fair, reasonable and non-discriminatory terms and does not give rise to speculative reservation or foreclosure practices capable of impeding effective competition or the effective development or use of those zones."

This means operators cannot simply "landbank" resources (such as land, power connections, or connectivity) in acceleration zones without active development. Resources must be used efficiently. Operators must have clear, realistic development timelines. Practices that block competitors from accessing essential resources or that hoard capacity without deployment could lead to the loss of access to the zone or other penalties.

Reporting and Transparency

While CADA itself does not prescribe a detailed public reporting template for every individual operator, the reliance on Delegated Regulation (EU) 2024/1364 implies a robust reporting regime. Operators must be able to provide data to Member States and relevant authorities to prove compliance with the KPIs. This will likely involve regular reporting on PUE, WUE, carbon emissions, and waste-heat recovery rates. The data must be accurate and verifiable, as Member States are responsible for monitoring the sustainability performance of data centres in their acceleration zones.

What this means for you

As a data centre operator or cloud service provider planning deployments in the EU, you must take immediate steps to align your projects with the CADA sustainability framework. The proposed regulation creates a "compliance-by-design" requirement where sustainability is not an afterthought but a prerequisite for deployment in acceleration zones.

  1. Audit Your KPIs: Ensure your monitoring infrastructure can accurately measure and report on the KPIs listed in Delegated Regulation (EU) 2024/1364, particularly PUE and WUE. If your current systems do not capture this data with the required granularity, upgrade them now. You will need to demonstrate compliance with the specific indicators referenced in Article 11(1).
  2. Prioritise Brownfield Sites: When scouting locations for new data centres, especially those that could qualify for acceleration zones, prioritise brownfield sites. Document your efforts to reuse existing infrastructure, as this will be a key factor in permitting and strategic project designation under Article 10(1)(g).
  3. Plan for Waste-Heat Reuse: Integrate waste-heat recovery into your design phase. Engage with local municipalities and district heating providers early to identify opportunities for waste-heat reuse. This not only meets the planning requirements of Article 10(1)(e) but can also create new revenue streams.
  4. Secure Clean Energy: Develop strategies for procuring clean energy, such as PPAs or on-site renewable generation. Demonstrate to regulators that your project will not negatively impact the local grid and that you are contributing to the EU's clean energy transition, as encouraged by Recital 38 and Article 10(1)(b).
  5. Avoid Speculative Reservation: Ensure your resource allocation plans are realistic and time-bound. Avoid holding resources in acceleration zones without active development, as this could trigger the anti-speculation provisions of Article 11(2).
  6. Engage with Member States: Stay informed about the specific acceleration zones designated by Member States. Engage with national authorities to understand how they are implementing Article 11 and Article 10, and ensure your projects align with their national cloud and AI strategies.

Common misconceptions

"CADA sets its own unique sustainability standards."

  • Correction: CADA does not create new sustainability metrics from scratch. Instead, it mandates the use of existing KPIs from Delegated Regulation (EU) 2024/1364. Operators should focus on complying with that regulation to meet CADA requirements.

"Only large hyperscalers are affected."

  • Correction: While hyperscalers are prominent, the rules apply to all data centre operators deploying capacity in acceleration zones. This includes mid-market providers and specialized data centre companies.

"Waste-heat reuse is optional."

  • Correction: While not every site may have an immediate buyer for waste heat, the planning for waste-heat reuse is a mandatory consideration in site designation under Article 10(1)(e). Operators must demonstrate that they have considered and, where feasible, implemented waste-heat recovery solutions.

"Greenfield sites are preferred for speed."

  • Correction: CADA explicitly prefers brownfield sites under Article 10(1)(g). While greenfield sites may seem easier to build on, brownfield sites are prioritized for sustainability and circular economy reasons. Operators should not assume greenfield sites will be easier to permit in acceleration zones.

Related

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