Germany is discussing new energy efficiency legislation that could directly affect the local data centre sector. The bill was passed on 19 April 2023 and is currently in the parliamentary process. In December 2020, the member states of the European Union (EU) decided to take action to combat climate change and its impacts, seeking to reduce greenhouse gas emissions by 2030. To fulfil this goal, the European Commission presented the draft of a new directive based on increasing the region's energy efficiency, covering federal, state and municipal governments. According to the German bill, because of the EU's high energy efficiency targets for Germany, ambitious measures must be taken as soon as possible. Hence the need to propose new legislation in Germany even before the European Commission directive comes into force. The target is to reduce final energy consumption by at least 26.5 per cent by 2030 compared with 2008. In terms of primary energy, the expected saving is 39.3 per cent over the same comparison period, slightly higher than the European region's target. In addition, the bill addresses a further reduction in both primary and final energy consumption for the period between 2040 and 2045. Although the main focus of the energy efficiency measures is the public sector, the initiative could serve as a model for other sectors of society. However, in its article 11, the bill establishes that energy-intensive companies will also be required to adopt energy or environmental management systems, as is the case with data centres. In the specific case of data centres that start operations before 1 July 2026, they must: 1. From 1 July 2027, have an energy efficiency of less than or equal to 1.5; and 2. From 1 July 2030, have an energy efficiency of less than or equal to 1.3. Data centres commencing operations on or after 1 July 2026 must: 1. Achieve an energy efficiency of less than or equal to 1.3; and 2. Have a share of reused energy of at least 10%. Data centres commencing operation after 1 July 2027 must have a planned share of at least 15% recycled energy; Data centres operating from 1 July 2028 must have a planned share of at least 20% recycled energy. Data centres that start operations before 1 January 2024 must be operated in such a way that air cooling features: 1. inlet temperature not less than 24 degrees Celsius; and 2. From 1 January 2028, inlet temperature not lower than 27 degrees Celsius. Lower inlet temperatures will only be allowed if they are reached without the use of cooling systems. In Article 12, the bill defines that data centre operators will be required to establish an energy or environmental management system by 1 July 2025. It will be necessary to make continuous measurements of the main components of data centres and take the necessary measures to continuously improve energy efficiency. For data centres with a nominal non-redundant connected load of 1 megawatt and for data centres owned or operated by public bodies with a nominal non-redundant connected load of 200 kilowatts, as of 1 January 2025, there will be an obligation to validate or certify the energy or environmental management system. Data centres where at least 50% of the reused energy is absorbed for use through a heating network are exempt from the obligation to establish an energy or environmental management system. The bill is also concerned about the waste heat generated by businesses. It will therefore require that those with an average annual total energy consumption greater than 2.5 GWh will have to use newer technologies to reduce waste heat as much as possible and reuse it as far as possible and reasonable. Experts predict that there will still be stricter changes to the draft laws associated with energy efficiency requirements for data centres. Data centre association vision The German Data Centre Association (GDA) sees risks in this bill, which could negatively influence the framework conditions for the operation of these environments in the country. "Germany could become less and less attractive as a destination for this sector. This would harm German digitalisation," says Anna Klaft, president of the GDA. The focus of the debate around the bill is the general obligation to release waste heat with percentage quotas that have remained unchanged. According to the GDA, the creation of an incentive system would be more effective. "One positive aspect is that the mandatory location of new data centres within five kilometres of heat networks will be cancelled without replacement. But the general obligation to release waste heat creates uncertainties in planning. Large investments are urgently needed to expand the digital infrastructure in line with the gigabit strategy," explains Anna Klaft. Instead of regulating the industry with strict requirements, she said, framework conditions for data centres should be improved and incentive systems for climate-neutral management should be put in place. "The expansion of digital infrastructure requires high-performance data centres. They are the engine and foundation of digitalisation and the basic requirement for Germany's digital sovereignty," adds the chairwoman of the German Data Centre Association.