Can Europe Build Data Centers Without Giving Up Its Climate Goals?

In the last 18 months, multiple data center proposals have fallen through in Germany: Stack Infrastructure canceled a $3 billion facility in Hesse, and state-owned Komm.ONE withdrew from a project in Baden-Württemberg. Though precisely what causes a data center development to fold is rarely clear, Komm.ONE pointed directly to the burdens of the Energy Efficiency Act.

Graichen claims that the industry’s objections are groundless. He says the availability of a heat offtake should become a default criterion for any developer searching for a new site. “Stop complaining,” he says.

When an offtake is available, recycling heat produced by a data center is straightforward. “There is no technical reason why a data center cannot use its waste heat. The technologies and concepts are well known,” says John Booth, managing director at IT consultancy Carbon3IT, who helped to devise EU-wide energy efficiency targets for data centers. “There is absolutely no reason except the will of the organization to do it.”

Nevertheless, under the amended Energy Efficiency Act, data center developers are required only to assess whether recycling heat is economically and technically feasible. If not, they are exempt. “With practical rules for data centers, we are creating the conditions for digital sovereignty and economic growth,” wrote Katherina Reiche, federal minister for economic affairs and energy, when the cabinet approved the change.

The amendment may unlock pent-up demand among data center developers to build in Germany, whose geographic centrality makes it easy to route data efficiently into Western and Eastern Europe. “It lessens the risk of people not seeing the German market as attractive,” says Smitten.

But in a roundabout way, it could also undermine the aim to spark a building frenzy, inviting the type of climate-focused activism that has led to permitting freezes and data center moratoria in the US. Already, in February, the city council of a small German town voted to block the construction of a $2.5 billion data center development, partly over climate concerns.

As policymakers contend with conflicting ambitions to improve domestic AI capabilities and meet climate objectives, some say the swelling public unease about that trade-off will complicate things yet further in Europe. In the last year, the attitude toward data centers “has switched completely,” claims Graichen. “First and foremost in the US, but the same will happen in Europe.”