Overcoming administrative hurdles in data storage facilities
In recent developments, the data centre sector in both the UK and EU is witnessing significant changes, with a focus on promoting growth whilst ensuring sustainability and compliance with new regulations.
The UK government, with its target of 6 GW of AI data centre capacity by 2030, is aggressively driving data centre expansion across England, Scotland, and Wales. The potential electricity demand from these data centres could range from 30 to 71 TWh by 2050, primarily driven by AI workloads.
To facilitate this growth, the UK is refreshing its regulatory landscape. The Data (Use and Access) Act 2025 (DUAA), enacted in June 2025, aims to balance privacy, innovation, and economic growth while retaining UK GDPR protections and maintaining data adequacy with the EU. The EU has renewed the UK's adequacy decision in July 2025, confirming that UK data protection remains closely aligned with EU standards.
Critical infrastructure reform, TMO4+, aims to bring data centres under the UK's Nationally Significant Infrastructure Projects (NSIP) regime, expediting planning approval and declaring data centres as a “critical national priority.” This move is expected to enable faster development and address planning delays.
Meanwhile, in the EU, data centre regulations have become more stringent since late 2024. All data centres with a capacity of 500 kW or more must annually report energy performance metrics such as Power Usage Effectiveness (PUE), renewable energy use, water consumption, and waste heat reuse. New data centres in cooler EU climates must meet a strict PUE of 1.3, with existing ones required to comply by 2030. The EU aims to achieve climate-neutral data centres by 2030, emphasizing energy efficiency, clean energy, water conservation, circular economy practices, and heat reuse.
While specific details on Germany’s policies are not explicit, it is part of the EU framework enforcing these energy efficiency and sustainability standards, which strongly guides its national measures.
As the demand for data centre investment continues to grow, stakeholders need to consider all applicable regulations from the outset of any investment planning. This evolution will require industry players to develop and observe policies that uphold rigorous standards in relation to data privacy, energy efficiency, and anti-competitive practices.
Merger control, foreign direct investment, and foreign subsidies are key considerations for the industry, particularly due to data centres being considered "critical infrastructure" for national security regulations. The data centre industry has grown immensely in the past decade, with challenges in implementing pan-European asset-based securitisation structures due to different tax obligations and subsidiary disclosing regimes across jurisdictions in the European market.
In conclusion, the UK and EU are shaping the future of the data centre industry with a dual focus on enabling growth and ensuring sustainability. Stakeholders must stay vigilant, considering the incoming laws and regulations and their potential impact on the industry's evolution.
- The UK government's focus on data centre expansion in environmental-science, driven by AI workloads, requires investing in technological advancements to meet the electricity demand and comply with new regulations, such as the Data (Use and Access) Act 2025 (DUAA).
- As the data centre sector evolves, lifestyle choices will be influenced by investments in sustainable energy practices and environmental-science, as demonstrated by the EU's push for climate-neutral data centres by 2030, emphasizing energy efficiency, clean energy, water conservation, and heat reuse.
- Navigating the increasingly complex regulatory landscape in both the UK and EU, particularly in areas like merger control, foreign direct investment, foreign subsidies, and tax obligations, requires financiers to develop strategies that prioritize business growth and adherence to stringent environmental, data privacy, and national security standards.
