Summary Under the proposed Cloud and AI Development Act (CADA), Denmark is legally required to designate at least one data centre acceleration zone within its territory if it is deploying data centre capacity. As proposed in Article 10, this designation must occur within six months of the Regulation's entry into force. The specific geographic locations are not pre-determined by the EU; instead, Denmark must select sites based on strict, verifiable criteria including available power grid capacity, network connectivity, waste-heat reuse potential, and a statutory preference for brownfield sites. Once designated, Article 11 mandates that sustainability requirements within these zones must align with the key performance indicators (KPIs) in Delegated Regulation (EU) 2024/1364, and resource allocation must remain fair, reasonable, and non-discriminatory to prevent market foreclosure.

Detail

The proposed Cloud and AI Development Act (CADA), COM(2026) 502 final, introduces a harmonised framework designed to accelerate the deployment of sustainable computing infrastructure across the European Union. For Denmark, as with all Member States where data centre capacity is being deployed, the core obligation lies in Article 10 of the proposal. This Article mandates that Member States designate at least one data centre acceleration zone ("acceleration zone") within their territory by a deadline set for six months after the Regulation's entry into force.

The primary purpose of an acceleration zone, as outlined in the explanatory memorandum and Article 37, is to enable infrastructure deployment at scale and speed within a clear, streamlined regulatory framework. However, CADA does not dictate specific geographic coordinates or name specific cities or regions. Instead, Article 10(1) requires Denmark to conduct a rigorous assessment and select sites based on a comprehensive set of factors. These factors are designed to ensure that new data centres integrate sustainably into the local environment and energy grid, addressing the "limited and geographically concentrated availability of computing capacity" identified in the proposal's context.

Specifically, Article 10(1) lists the following eight aspects that Denmark must consider when designating these zones:

  • Site Dimensions and Capacity: The location and dimension of the site, including the minimum and maximum size of the facilities that could be built on that site or area.
  • Energy Grid Capacity: The available and future power grid capacity, as well as the possibility and conditions for on-site storage and clean energy generation.
  • Network Connectivity: The available and future network connectivity capacity.
  • Legacy Infrastructure: The capacity of the zone to support the phasing out of legacy copper networks.
  • Waste Heat Reuse: The available and future facilities that can reuse data centre waste heat.
  • Permitting Acceleration: All measures taken to accelerate the granting of the necessary permits for constructing and operating data centres within the given zone.
  • Brownfield Preference: A preference for reusing brownfield sites over using greenfield sites.
  • Sustainability and Climate Resilience: The ability of the site or area to function sustainably, particularly as regards preventing or minimising environmental impacts, supporting the reduction of carbon emissions, and its climate resilience.

In addition to the initial designation, Article 10(2) imposes ongoing, dynamic obligations on Denmark. Where appropriate to facilitate the development of acceleration zones, the Member State must conduct a comprehensive analysis of the energy needs and their respective impacts on greenhouse gas emissions for current and future acceleration zones. This analysis must identify the required energy infrastructure capacity for the proper functioning of data centre projects located in these zones.

This assessment is not a one-off event. Article 10(2)(a) requires that the analysis be conducted at least when designating the acceleration zones and reviewed at least every three years. Furthermore, Denmark must ensure that national network development plans prepared by transmission system operators (pursuant to Article 51 of Directive (EU) 2019/944) and distribution system operators (pursuant to Article 32 of the same Directive) take due account of this analysis. This ensures that anticipatory investments are made to accommodate future system needs, preventing the grid from becoming a bottleneck for the very capacity CADA seeks to expand.

Article 11 of CADA further defines the conditions that must apply within these acceleration zones, particularly regarding sustainability and fair competition. Article 11(1) mandates that when setting sustainability requirements for data centres deployed in acceleration zones, Denmark must use the key performance indicators specified in Commission Delegated Regulation (EU) 2024/1364 pursuant to Directive (EU) 2023/1791. This ensures that environmental standards are consistent across the EU, focusing on energy efficiency and resource utilisation, and prevents a "race to the bottom" where Member States might lower standards to attract investment.

Crucially, Article 11(2) addresses market access and competition. It requires Denmark to ensure that the allocation and use of resources within acceleration zones takes place on fair, reasonable, and non-discriminatory terms. The provision explicitly states that these practices must not give rise to any speculative reservation or foreclosure practices capable of impeding effective competition or the effective development or use of those zones. This is a direct response to the risk that large incumbents might hoard land or energy capacity without building, thereby blocking new market entrants and undermining the goal of increasing overall EU capacity.

What this means for you

For CTOs, data centre operators, real estate developers, and SMEs evaluating the practical impact of CADA on their operations in Denmark, the establishment of acceleration zones represents a significant shift in the permitting and site-selection landscape.

1. Strategic Site Selection and Brownfield Priority The preference for brownfield sites outlined in Article 10(1)(g) suggests that future data centre deployments in Denmark will likely concentrate in areas with existing industrial infrastructure rather than pristine greenfield locations. This aligns with the waste-heat reuse criteria in Article 10(1)(e), as industrial zones often have established connections to district heating networks. If your organisation is scouting locations, prioritise sites that are already zoned for industrial use and have existing connections to district heating systems. This not only satisfies the "preference" criterion but may also accelerate the permitting process by reducing environmental impact assessments required for greenfield sites.

2. Grid Capacity as a Primary Filter The requirement for Denmark to conduct and publish energy need analyses under Article 10(2) provides valuable foresight for investors. By monitoring these national and regional energy assessments, you can identify which areas are being proactively prepared for high-capacity data centre loads. This reduces the risk of investing in a site only to find that grid connection is delayed for years due to inadequate foresight. The regulation explicitly links these analyses to national network development plans, meaning grid upgrades should be planned in tandem with data centre deployments. Operators should engage early with Danish transmission and distribution system operators to align their project timelines with these anticipatory investments.

3. Sustainability as a Regulatory Baseline The sustainability KPIs mandated by Article 11(1) mean that energy efficiency is no longer just a best practice or a marketing differentiator but a regulatory baseline for projects in acceleration zones. You should ensure that your data centre designs meet or exceed the metrics defined in Delegated Regulation (EU) 2024/1364. Failure to align with these indicators could jeopardise your ability to operate within an acceleration zone or meet the sustainability requirements set by Danish authorities. This is particularly relevant for the Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) metrics which are central to the delegated regulation.

4. Protection Against Market Foreclosure The non-discriminatory resource allocation rules in Article 11(2) offer protection for SMEs and new entrants. If you are a smaller provider competing for space or grid capacity in these zones, you have a regulatory basis to challenge any practices that appear to reserve resources speculatively or exclude new entrants. This promotes a more level playing field, ensuring that acceleration zones serve the broader EU goal of increasing computing capacity rather than consolidating power among a few incumbents. Operators should document any instances where resource allocation appears to violate these fair, reasonable, and non-discriminatory terms.

Common misconceptions

"CADA designates specific cities for data centres in Denmark." No. CADA does not name specific locations. The Regulation only obliges Denmark to designate zones based on the criteria in Article 10. The specific geographic locations remain a national decision, subject to Danish spatial planning, local energy grid realities, and the outcomes of the required energy need analyses.

"Acceleration zones automatically guarantee faster permits." While Article 13 of CADA (which applies to projects in these zones) aims to streamline administrative processes and sets a maximum permit-granting timeline of 12 months for projects in these zones, the acceleration zone itself is primarily a planning and designation tool. The speed of deployment still depends on Denmark's implementation of the supporting measures, such as the single information points (Article 12) and the preparation of aggregated baseline permits (Article 13). The zone designation is the prerequisite, not the guarantee, of speed.

"Brownfield preference bans greenfield sites entirely." This is incorrect. Article 10(1)(g) states a "preference" for reusing brownfield sites. This does not ban greenfield development entirely. However, it requires Denmark to justify why a greenfield site is chosen over available brownfield options, particularly when considering environmental impacts and climate resilience as required by Article 10(1)(h). If a greenfield site is selected, the justification must be robust and documented.

"Sustainability rules in acceleration zones are optional." No. Article 11(1) makes the use of KPIs from Delegated Regulation (EU) 2024/1364 mandatory for setting sustainability requirements within these zones. This is a harmonised EU standard, not a voluntary guideline.

Related

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