Summary Sustainable data centre deployment is central to the proposed Cloud and AI Development Act (CADA) because the EU aims to triple its computing capacity by 2030–2035 without triggering a regulatory "race to the bottom" on environmental standards. Under Articles 10 and 11, Member States must designate "acceleration zones" that mandate strict sustainability criteria, such as the use of clean energy and the prioritization of brownfield sites. Crucially, the specific Key Performance Indicators (KPIs) governing these zones are defined in Delegated Regulation (EU) 2024/1364, not enumerated directly in the CADA text itself. This framework ensures that rapid infrastructure growth aligns with the EU's climate and energy efficiency goals.

Detail

The Cloud and AI Development Act (CADA), as proposed in COM(2026) 502 final, is a legislative instrument designed to strengthen Europe's cloud and AI ecosystem. A core pillar of this proposal is the rapid expansion of data centre capacity to meet the surging demand driven by AI workloads. However, the Commission explicitly links this expansion to sustainability, recognizing that unchecked growth could exacerbate energy supply stress and cause adverse environmental impacts.

The Strategic Balance: Growth and Green Standards

Recital 37 of the CADA proposal states that data centres are critical infrastructure that can create substantial economic value, but their expansion "depends on the implementation of an adequate framework preventing any negative impacts, such as energy supply stress, adverse environmental impacts and lost opportunities."

The proposal aims to triple EU data centre capacity within the next five-to-seven years, reaching the needed capacity by 2035. To achieve this, CADA introduces "data centre acceleration zones." Recital 38 explains that these zones are designated to facilitate the development, expansion, and modernisation of data centres. Crucially, this facilitation is not unconditional. Recital 38 emphasizes that designation must ensure "compliance with applicable Union law, including requirements relating to energy efficiency and environmental protection."

This approach is designed to avoid a "race to the bottom." Recital 39 states that when setting sustainability requirements for data centres in acceleration zones, Member States must use specific key performance indicators (KPIs) defined in existing EU delegated regulations. The objective is to "ensure consistent environmental standards, increase energy efficiency and support the Union's broader climate, environmental and sustainability goals." By harmonizing these standards at the EU level, CADA seeks to prevent Member States from competing for investment by lowering environmental protections.

Article 10: Designation of Acceleration Zones

Article 10 of the CADA proposal places the primary obligation on Member States to designate at least one data centre acceleration zone within their territory where data centre capacity is being deployed.

When designating these zones, Member States must consider several factors that directly link location to sustainability:

  • Energy and Grid Capacity: They must assess available and future power grid capacity, as well as the possibility and conditions for on-site storage and clean energy generation (Article 10(1)(b)).
  • Brownfield Preference: Member States must consider the "preference for reusing brownfield sites over using greenfield sites" (Article 10(1)(g)). This encourages the redevelopment of previously used industrial or commercial land, reducing pressure on natural habitats.
  • Sustainability and Climate Resilience: The site must have the "ability to function sustainably, particularly as regards preventing or minimising environmental impacts and 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. The results must feed into national network development plans to ensure anticipatory grid investments can accommodate future system needs.

Article 11: Conditions Within Acceleration Zones

Article 11 reinforces the sustainability mandate by setting specific conditions for data centres deployed within these zones.

  • Mandatory KPIs: Paragraph 1 states that when setting sustainability requirements, Member States shall use the key performance indicators specified in Commission Delegated Regulation (EU) 2024/1364, pursuant to Directive (EU) 2023/1791 (the Energy Efficiency Directive). These KPIs cover metrics such as Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE), and carbon emissions. It is important to note that these specific KPIs are not enumerated in the CADA text itself but are referenced from the Delegated Regulation.
  • Non-Discriminatory Access: Paragraph 2 requires that the allocation and use of resources within acceleration zones take place on "fair, reasonable and non-discriminatory terms." It explicitly prohibits "speculative reservation or foreclosure practices" that could impede effective competition or the development of the zones. This ensures that sustainability standards are applied equally to all operators, preventing market dominance by entities that might otherwise bypass environmental due diligence.

Clean Energy and Grid Integration

The proposal places significant emphasis on clean energy. Recital 38 notes that "sufficient and timely energy supply to the acceleration zones constitutes a fundamental enabling condition." It highlights the importance of Power Purchasing Agreements (PPAs) for long-term price stability and the procurement of clean electricity. Member States are urged to promote the uptake of PPAs by removing unjustified barriers.

Additionally, Recital 38 mandates that Member States facilitate clear and efficient procedures for grid connection and flexible connection agreements. This ensures that data centres can integrate with the energy grid in a way that supports the transition to a clean energy system, potentially leveraging waste heat reuse and on-site renewable generation.

What this means for you

For public-sector and procurement officers, the integration of sustainability into CADA's data centre framework has several practical implications:

  1. Procurement Criteria: When procuring cloud or data centre services, you can expect stricter sustainability reporting from providers. Article 11's mandate to use EU-wide KPIs means that providers operating in acceleration zones must demonstrate compliance with specific energy and water efficiency metrics defined in Delegated Regulation (EU) 2024/1364. You should include these verified KPIs in your tender documentation to ensure you are procuring from operators who meet the highest EU standards.
  2. Site Selection and Brownfield Preference: If your authority is involved in designating land for data centres or supporting local infrastructure projects, prioritize brownfield sites as encouraged by Article 10(1)(g). This aligns with national spatial planning obligations under CADA and supports circular economy principles.
  3. Grid and Energy Planning: Public authorities responsible for energy planning must collaborate with data centre operators. Article 10(2) requires Member States to ensure that national grid development plans account for the energy needs of acceleration zones. Procurement officers should coordinate with energy regulators to ensure that new data centre projects have viable, sustainable energy connections, avoiding delays due to grid congestion.
  4. Avoiding Speculative Practices: Be vigilant against speculative reservation of resources in acceleration zones. Article 11(2) prohibits practices that impede competition. When allocating public resources or permits within these zones, ensure processes are transparent, fair, and non-discriminatory to maintain market integrity and encourage genuine investment in sustainable infrastructure.

Common misconceptions

Misconception 1: CADA prioritizes speed over sustainability.

  • Correction: While CADA aims to accelerate deployment, it explicitly ties this acceleration to strict sustainability standards. Recital 39 and Article 11 mandate the use of EU-wide KPIs to prevent a "race to the bottom." Speed is achieved through streamlined permitting, not by lowering environmental bars.

Misconception 2: Any data centre can qualify as an "acceleration zone" project.

  • Correction: Only data centres deployed in designated acceleration zones benefit from the streamlined procedures. Furthermore, these zones must meet specific criteria, including energy analysis and sustainability assessments (Article 10). Not all data centre projects automatically qualify for these accelerated pathways.

Misconception 3: Sustainability is optional for providers in acceleration zones.

  • Correction: Compliance with the KPIs set out in Delegated Regulation (EU) 2024/1364 is mandatory for data centres in acceleration zones under Article 11(1). Member States must set sustainability requirements based on these indicators, making them a binding condition for operation within these zones.

Misconception 4: The specific KPIs are listed in the CADA articles.

  • Correction: The CADA proposal does not list the specific KPIs in its text. Instead, Article 11(1) explicitly references Delegated Regulation (EU) 2024/1364 as the source for the key performance indicators that must be used.

Related

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