Back in February 2020 the European Commission published the document “Shaping Europe’s digital future”. It contained a sentence that struck fear into data center operators across the continent:
Deep within the same document on page 3 is another statement of interest:
“Creating a Europe fit for the digital age is a complex puzzle with many interconnected pieces; as with any puzzle, the whole picture cannot be seen without putting all the pieces together.
One of those pieces is “enforcement” and further on in the document is yet another sentence under “key actions” “Initiatives to achieve climate-neutral, highly energy-efficient and sustainable data centers by no later than 2030 and transparency measures for telecoms operators on their environmental footprint.”
The Enforcement and initiatives, mentioned in the document, now both require some legislation and to our knowledge there are 3 separate pieces of legislation now in play, the EU Taxonomy Regulations, the Corporate Sustainability Directive and the impending Energy Efficiency Directive, and we’ll cover them later.
Almost a year later (January 2021) came the launch of the Climate Neutral Data center Pact (CNDCP), where 25 companies and 17 trade associations agreed to a “self-regulatory” initiative based on six pillars, energy efficiency, clean energy, water, circular economy, a circular energy system and governance.
Fast forward to today (December 2022) and there are 74 data center operators and 23 associations signed up, and on the 8th December 2022, they revealed their “Audit Framework”, a tool that demonstrates alignment with the EU Taxonomy regulations and compliance with the CNDCP Sustainability criteria.
I have to admit to being a tad confused. The European Commission has clearly signalled a package of legislation. Some believe that a “self-regulatory” initiative and now an “Audit Framework” will be enough to stave off regulation. This is despite the fact that two of the three regulations I mentioned above are already in actual play.
Let’s look at them in a bit more detail and from a data center perspective
The legislation requires that a qualifying organization get their data center “independently audited every three years” to "expected best practices". These are either those set out in the EU Code of Conduct for Data centers (Energy Efficiency) known as EUCOC, or in the CEN/CENCELEC document CLC/TR EN 50600-9-1 "Data centre facilities and infrastructures - Part 99-1: Recommended practices for energy management"
Requirements include using refrigerant gases with a global warming potential of less than 675 as well as more environmental aspects, which can be reviewed on the EU Taxonomy compass.
However, some of the financial auditing firms pointed out that the neither the EUCOC or the CLC/TR EN 50600-99-1 had been written in an auditable format, so in May 22. the EU's Directorate-General for Communications Networks, Content and Technology (DG CNCT) held a series of workshops to discuss this problem.
This resulted in a commission from DG CNCT to the TIC Council to “redraft” the EUCOC best practices to make them “auditable”. This work was completed over the summer of 22 and there was a public consultation in November 22. We expect the EUCOC redraft to be published early in 2023 and also understand that this document will be published by the EU's Joint Research Centre (EU-JRC).
This will be in addition to the 14th Edition of the EUCOC which is also due to be published in Q1 2023.
It should be noted that the EUCOC best practices will NOT be in the EU Taxonomy format.
The EUCOC redraft is an interim measure to enable organizations to provide a “technical verification” document to their financial auditors for this reporting period (2023), showing compliance with of the EU Taxonomy.
The next edition of EUCOC is likely to be based on other CEN/CENELEC documents such as the Data center Maturity Model (CLC/TS EN50600-5-1) and its current associated documents - practices for energy efficiency (CLC/TR EN50600-99-1 ) and practices for sustainability (CLC/TR EN 50600-99-2). .
Corporate Sustainability Reporting Directive
In November 22 The European Parliament voted “overwhelmingly” to pass the Corporate Sustainability Reporting Directive, which is a major ESG (Environmental, Social and Governance) regulation that brings together financial, ESG information and assurance for the first time. For organizations within the EU. or those with European subsidiaries, reporting has just got a lot more complex.
What does it mean? Well, for data centers it means that you will be approached by your clients and requested to provide energy and sustainability information for their specific instance on your site. This will include their energy data and their proportion of your data center overhead.
In essence, you must report the energy consumption of your equipment divided across all the clients being hosted or colocated within that site. Clients may even ask for your sustainability credentials.
Energy Efficiency Directive (EED)
The Energy Efficiency Directive (EED) dates back to 2012, and mandates energy efficiency improvements within the European Union. A new revision tightens up the original requirements, and specifically targets all data centers, be they cloud, colocation, enterprise - or aggregated edge with a mooted lower limit of 100kW.
The EED revision includes proposals for a mandatory in-country data center registry and annual reporting of total energy consumption, to include the percentage derived from renewable energy sources, water usage, and the amount of waste heat used for other purposes (if applicable). The Euroepan Commission has commissioned a consultation project which started in early December 2022 and will continue until March 2024 that covers the proposals and will include feedback from the professional sector.
A catalyst for change
There is no doubt this legislation will be a wake-up call to all data center operators. One of the end results may be an accelerated drive for enterprises to move out of old legacy facilities and into cloud and colocation services. But it also places a degree of responsibility on colocation and cloud providers to be able to capture and distribute ESG and energy data accurately, apportioned to individual users so that they can report on the emissions and energy they are responsible for..
It would be easy for the data center operators to feel persecuted with a whole raft of regulations in play, but a comment was made at the recent DCD Awards that puts all this into perspective.
We are without doubt the 4th Utility. We provide the means to create, transmit and process data for every industry, sector, government and consumer on the planet.
The other utilities - electricity, water and gas- are heavily regulated. We cannot consider ourselves to be the 4th Utility, without the associated regulatory regime.
It is coming.