Summary Under the proposed Cloud and AI Development Act (CADA), Portugal is not pre-assigned specific geographic locations by the EU; rather, the Member State itself must designate at least one data centre acceleration zone within six months of the Regulation's entry into force, provided it is deploying data centre capacity. As proposed in Article 10, these zones must be selected based on strict criteria including grid availability, network connectivity, waste-heat reuse potential, and a preference for brownfield sites. Furthermore, Article 11 mandates that resource allocation within these zones remains fair, reasonable, and non-discriminatory, while sustainability requirements must align with the key performance indicators (KPIs) in Delegated Regulation (EU) 2024/1364.

Detail

The Cloud and AI Development Act (CADA), formally proposed as Regulation COM(2026) 502 final, introduces a harmonised EU framework designed to accelerate the deployment of sustainable computing infrastructure across the Union. For Portugal, the most immediate operational impact of this proposal lies in the mandatory creation of data centre acceleration zones. These zones are not merely administrative labels; they are designated territories where the regulatory, permitting, and infrastructural conditions are optimised to fast-track the construction and operation of high-capacity data centres.

The proposal aims to address the "limited and geographically concentrated availability of computing capacity in the EU" by creating a mechanism to identify and support strategic projects. For a Member State like Portugal, which is increasingly positioning itself as a hub for digital infrastructure, the CADA framework provides a structured pathway to unlock capacity while ensuring environmental and grid stability.

The Obligation to Designate: Article 10

The core mechanism for this acceleration is found in Article 10 of the CADA proposal. The text places the onus squarely on the Member State to take proactive action. Specifically, Article 10(1) states that "Where data centre capacity is being deployed within the territory of a Member State, that Member State shall designate at least one data centre acceleration zone ('acceleration zone') within its territory by [P.O. insert the date of entry into force of this Regulation plus 6 months]."

For Portugal, this creates a hard statutory deadline. Once CADA enters into force, the Portuguese government has a six-month window to identify and officially designate at least one acceleration zone if it intends to deploy new data centre capacity. This is not an optional policy initiative; it is a mandatory requirement under the proposed Regulation. The designation must occur "where data centre capacity is being deployed," implying that if Portugal has active or planned projects, the obligation is triggered immediately.

Selection Criteria: What Makes a Zone an "Acceleration Zone"?

The proposal does not leave the designation process to arbitrary political decision-making. Article 10(1) explicitly lists eight cumulative criteria that Member States must consider when designating these zones. For CTOs, site selection architects, and investors evaluating Portugal as a location, these criteria define the "accelerated" nature of the zone and the minimum standards a site must meet to qualify:

  1. Site Dimensions and Facility Size: The location and dimension of the site, including the minimum and maximum size of facilities that could be built on that site or area (Article 10(1)(a)).
  2. Power Grid Capacity: The available and future power grid capacity, and the possibility and conditions for on-site storage and clean energy generation (Article 10(1)(b)). This is often the primary bottleneck for hyperscale deployments, and the criteria require forward-looking analysis.
  3. Network Connectivity: The available and future network connectivity capacity (Article 10(1)(c)). Low-latency connectivity is critical for AI workloads and edge computing, making this a non-negotiable factor.
  4. Legacy Network Phasing Out: The capacity of the zone to support the phasing out of legacy copper networks (Article 10(1)(d)).
  5. Waste Heat Reuse: The available and future facilities that can reuse data centre waste heat (Article 10(1)(e)). This aligns with the EU's broader circular economy and sustainability goals, encouraging integration with district heating or industrial processes.
  6. Permitting Acceleration: All measures taken to accelerate the granting of the necessary permits for constructing and operating data centres within the given zone (Article 10(1)(f)).
  7. Brownfield Preference: A clear preference for reusing brownfield sites over using greenfield sites (Article 10(1)(g)). This criterion aims to minimise environmental impact and urban sprawl, prioritising the redevelopment of previously used land.
  8. 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 (Article 10(1)(h)).

Furthermore, Article 10(2) requires Member States to 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 be reviewed at least every three years. Crucially, this analysis must feed into national network development plans, ensuring that grid operators (transmission and distribution system operators) account for the anticipated load from these data centres in their long-term planning (Article 10(2)(b)). This ensures that the designation of a zone is backed by a realistic grid expansion strategy.

Conditions Within the Zones: Article 11

Designating a zone is only the first step. Article 11 sets the operational conditions that must govern these acceleration zones to ensure they meet EU sustainability and competition standards.

Sustainability KPIs Article 11(1) mandates that 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." This is a critical distinction: the specific metrics for energy efficiency are not enumerated in the CADA text itself but are delegated to the existing regulatory framework. This means that any data centre built in a Portuguese acceleration zone will be measured against a common EU rating scheme for data centre energy efficiency. Operators cannot simply claim "green" status; they must meet specific, measurable benchmarks related to Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE), and carbon emissions as defined in that delegated act.

Fair Resource Allocation To prevent market distortion, Article 11(2) requires that the allocation and use of resources within acceleration zones takes place on fair, reasonable, and non-discriminatory (FRAND) terms. The proposal explicitly prohibits "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 concerns that large hyperscalers might lock up land, power, or connectivity without building, thereby starving SMEs and new market entrants of critical resources.

Strategic Projects and Permitting Speed

While Articles 10 and 11 define the zones and their conditions, the broader context of CADA Title III (Articles 12-14) provides the "acceleration" engine. Data centre projects within these zones benefit from streamlined permitting. Article 13 establishes that the permit-granting procedure for data centre projects in acceleration zones shall not exceed 12 months from the submission of a comprehensive application. Additionally, Member States must issue an "aggregated baseline permit" for each zone (Article 13(2)), covering common permits for the area, which significantly reduces the administrative burden for individual operators.

Moreover, Article 14 allows the Commission to designate specific projects within these zones as "strategic projects" if they meet criteria such as supporting essential public functions, including highly sustainable features, or addressing major shortages of compute capacity. Such designation can unlock further support measures and state aid compatibility.

What this means for you

For CTOs, infrastructure architects, and SMEs evaluating Portugal for data centre deployment, the CADA proposal represents a shift from fragmented national planning to a structured, EU-harmonised acceleration model. Here is the practical impact:

  1. Predictable Site Selection: You no longer need to guess which regions in Portugal will be friendly to data centre development. Once the acceleration zones are designated under Article 10, you will have a clear map of where the EU expects infrastructure to grow. Look for zones that prioritise brownfield sites (Article 10(1)(g)) if you are looking for repurposed industrial areas, or areas with confirmed grid expansion plans (Article 10(1)(b)).
  2. Compliance by Design: The mandatory use of KPIs from Delegated Regulation (EU) 2024/1364 (Article 11(1)) means your sustainability strategy must be baked into the design phase. You cannot retrofit efficiency later. Ensure your Power Usage Effectiveness (PUE) and cooling technologies meet the upcoming EU rating scheme standards to qualify for deployment in an acceleration zone.
  3. Protection Against Lock-In: The FRAND requirement in Article 11(2) is a safeguard for smaller players. If you are an SME or a mid-sized cloud provider, this provision aims to prevent hyperscalers from monopolising the best land and power connections in the designated zones. However, you should monitor how Portugal implements "fair allocation" to ensure it doesn't inadvertently favour established players through complex bidding processes.
  4. Grid and Connectivity Planning: Article 10(2) requires energy need analyses to feed into national grid plans. For your project timeline, this is a positive signal. It implies that grid connection queues in acceleration zones should be managed with the knowledge of future data centre demand, potentially reducing the wait times that currently plague data centre deployments across Europe. Engage early with local transmission system operators to align your load profiles with the zone's energy analysis.
  5. Timeline Awareness: With the six-month deadline for designation (Article 10(1)), expect Portugal to publish its list of acceleration zones shortly after CADA enters into force. Start your site selection process now, focusing on areas that likely meet the criteria of grid capacity, brownfield availability, and waste-heat reuse potential.

Common misconceptions

Misconception 1: The EU will choose the locations of acceleration zones in Portugal. Reality: No. Article 10 explicitly places the responsibility on the Member State ("that Member State shall designate"). The EU sets the criteria and the deadline, but Portugal decides which specific territories qualify as acceleration zones based on its national infrastructure needs and strategic priorities.

Misconception 2: Acceleration zones automatically grant permission to build. Reality: Designation does not equal automatic approval. Article 13 clarifies that while the process is accelerated (max 12 months) and an "aggregated baseline permit" covers common zone-wide requirements, individual operators still need to obtain additional permits for activities falling outside that baseline. You still must comply with environmental assessments and specific building codes.

Misconception 3: Any data centre can locate in an acceleration zone. Reality: While the zone is open to deployment, Article 11(2) mandates fair and non-discriminatory resource allocation. This implies that access to land, power, and connectivity within the zone will be subject to allocation rules designed to prevent speculative hoarding. You may need to demonstrate a concrete project plan to secure resources, rather than just reserving them indefinitely.

Misconception 4: Sustainability requirements are vague. Reality: Article 11(1) ties sustainability requirements directly to the KPIs in Delegated Regulation (EU) 2024/1364. These are specific, measurable metrics related to energy efficiency and environmental impact. Vague "green" claims will not suffice; compliance will be measured against these EU-wide indicators.

Related

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