Europe is redefining how datacentre efficiency and sustainability are measured through the revised Energy Efficiency Directive (EED). This shift is informed by a technical assessment conducted by the Borderstep Institute, in collaboration with EY and AIT. The assessment was commissioned to evaluate how new reporting obligations work in practice, revealing that while PUE remains useful, it fails to capture water consumption, carbon intensity, or the reuse of waste heat.

Why Europe Is Moving Beyond PUE

Digital infrastructure has become too resource-intensive to operate without oversight. AI workloads are accelerating energy demand, and traditional cooling systems are placing increasing pressure on water resources. Under the Directive, datacentres above a certain capacity must submit detailed performance data to a central EU database to establish transparency and enable future benchmarking.

What the EED Means for Datacentre Decisions

The EED makes clear that future compliance will be shaped at the design stage. Decisions that optimize one metric at the expense of others—a common outcome under PUE-centric design—are increasingly misaligned with regulatory expectations.

Design Aspect EED Expectation & Regulatory Risk
Designing for Balance Evaluation focuses on managing trade-offs across energy, water, and heat reuse simultaneously rather than a single efficiency score.
Renewable Sourcing Strategies must align with actual operational load profiles, moving beyond simple contractual procurement to real-world integration.
Technology Selection Choices now carry regulatory risk; technologies that lock facilities into narrow optimization paths may become future liabilities.
Heat as a Design Output Heat quality and stability are now evaluated alongside IT performance to meet district heating requirements.

Designing for Multiple Metrics, Not a Single Score

The EED makes clear that future compliance will be determined at the design stage. Evaluation now focuses on how trade-offs are managed across energy, water, and heat reuse simultaneously rather than a single efficiency score. Datacentres designed narrowly around legacy assumptions—particularly air cooling and climate dependency—may face higher retrofit costs and regulatory friction.

Design Objective In-Practice Implications under EED
Balanced Performance Low PUE achieved through high water consumption will be subject to heavy scrutiny.
Heat Strategy Facilities without a credible heat reuse pathway may face challenges in urban or district-heated regions.
Renewable Sourcing Strategies must align with actual operational load profiles, moving beyond simple contractual procurement.
Operational Maturity Technologies that simplify measurement and reduce variability will become more attractive as reporting requirements mature.

Technology Selection as a Regulatory Risk Decision

Technology choices are no longer purely operational or financial; under the EED, they increasingly carry regulatory, disclosure, and reputational risk. When evaluating cooling, power, or infrastructure technologies, operators must assess how a system performs across all EED metrics, not just PUE. It is critical to determine whether a technology introduces structural dependencies, such as water stress or climate sensitivity, and how easily its environmental impacts can be measured, verified, and reported. Furthermore, operators should evaluate whether a choice enables or constrains future heat reuse and renewable integration. Technologies that lock facilities into narrow optimization paths may become liabilities as the EED framework evolves toward benchmarking, labeling, and differentiated permitting or financing conditions.

Practical Guidance for Datacentre Operators and Buyers

To align design and procurement decisions with the EED, operators should consider the following principles:

Principle Description
1. Design for balance Select architectures that perform well across PUE, WUE, ERF, and REF simultaneously.
2. Eliminate structural trade-offs early Cooling and power choices largely determine long-term water use, heat reuse feasibility, and reporting complexity.
3. Prefer low-variance technologies Systems less dependent on climate, seasonality, or operating mode reduce regulatory and reporting risk.
4. Treat heat as a design output Evaluate heat quality and stability alongside IT performance where district heating or industrial reuse is feasible.
5. Simplify compliance Architectures with fewer interacting subsystems reduce measurement ambiguity and audit complexity.

Architectures with fewer interacting subsystems reduce measurement ambiguity and audit complexity.

The Four Core Metrics of the EED Framework

The EED reporting framework utilizes four primary indicators to describe datacentre performance holistically.

Metric Definition & Purpose
PUE (Power Usage Effectiveness) Remains central but is positioned as a technical efficiency indicator rather than a sustainability proxy.
WUE (Water Usage Effectiveness) Exposes the water cost of cooling, highlighting trade-offs PUE alone cannot capture.
ERF (Energy Reuse Factor) Reflects Europe’s focus on circular energy use and the reuse of waste heat.
REF (Renewable Energy Factor) Measures alignment with decarbonisation goals and the EU Green Taxonomy.

What the Borderstep Assessment Reveals About Europe’s Current Performance

The Borderstep–EY–AIT assessment provides the first consolidated view of how European datacentres perform against the EED’s reporting metrics. While participation in the initial reporting cycle was incomplete, several trends are already visible. Recent national publications of first EED reporting results have further exposed implementation challenges. Member States such as Germany and the Netherlands have released aggregated data sets, drawing criticism due to inconsistencies in completeness, transparency, and interpretation.

Germany published the most comprehensive data set to date. The Dutch publication was widely regarded as incomplete, with significant data withheld or anonymised, particularly where organisations classified information as commercially sensitive or self-determined disclosure thresholds. Information related to non-EU operators was frequently excluded. As a result, these early disclosures have not yet delivered the system-level insights the EED framework is intended to enable. This reinforces the Borderstep conclusion that harmonised implementation and clearer disclosure guidance are essential.

Why Immersion Cooling Aligns Well with the EED Metrics

Immersion cooling aligns with EED requirements due to its underlying thermodynamic characteristics. It enables climate-independent PUE by transferring heat directly into liquid. It results in near-zero water consumption (WUE of effectively zero) as it does not rely on evaporation. Furthermore, the higher-quality heat extracted is more suitable for district heating, improving ERF performance, while the simplified thermal flow reduces measurement ambiguity for reporting compliance.

Metrics and Architecture Are Converging

The revised EED signals a fundamental shift in how datacentres will be evaluated in Europe. Performance will be judged across energy, water, heat, renewables, and productivity — not a single score. Immersion cooling aligns structurally with this multidimensional framework. While not mandated, it reduces trade-offs across all measured dimensions and simplifies compliance. For operators planning new builds, upgrades, or high-density deployments, aligning design and technology decisions with the EED today reduces regulatory risk tomorrow.