Europe Edges Closer to Green Data Center Laws

European Union lawmakers are preparing to peg down the ballooning energy consumption of the block’s data center sector. The legislative push is part of an effort to avert the Earth's unfolding environmental catastrophe, which the United Nations described last week as humankind's "suicidal war" on nature. Yet, they are likely to take a light touch, DCK has learned.

In preparation for a decision by European governments this week on whether to demand that data centers become climate-neutral by 2030, the union’s executive body published a study detailing what the authors believed to be the most accurate forecast yet of the astounding growth in the amount of energy consumed by cloud computing systems.

The European Commission asked what legal powers it might use to cut the cloud’s energy consumption, and its consultants said the focus should be on toughening controls for the data centers that house the cloud systems. The consultants analyzed cloud computing architecture and concluded that it was so complex, so amorphous, and so quick to evolve, that it was impossible to measure it well enough to say when it was not energy-efficient enough to warrant intervention.

EU lawmakers are already preparing a volley of light-touch legal measures to usher the data center industry into greener operating practices. But tougher laws mooted this year -- such as a data center tax -- have been put under long-term review.

Cloud computing is a way for other (non-cloud) industries to cut their own carbon emissions, acknowledged the EU's Green Deal strategic plan for saving the planet, released back in January. But Europe might still need to act to make data centers more energy efficient, the plan warned. Addressing this question last week, EU advisors said that while growth in cloud computing's energy consumption had become "exponential," there was little more lawmakers could do besides creating a program of public information campaigns designed to make consumers and businesses aware of the energy cost that comes with their use of cloud services.

The advisors wanted tougher controls on data centers. Imposing energy-efficiency rules on data centers should be a priority, they said. Those rules should apply to both existing data centers and future ones going through approval processes. But those tougher recommendations did not make their formal shortlist.

EU digital legislators said the proposals would be the template for a final decision on what legal instruments it might use to achieve its declared aim of making data centers carbon neutral and energy efficient by 2030.

They put the tough measures onto a long-list of policies the EU could conceivably use but would take much time and effort, DCK understands. That includes a tax on dirty data centers and incentives for operators that invest in green data center technology. Multinational data center operators, faced with the prospect of shouldering a heavy cost for going greener but likely to catch a windfall from older data centers forced to close under any clampdown, lobbied lawmakers in Brussels to implement such measures earlier this year.

"Everything is still on the table," one of the Commission's top officials told DCK. "If you take 20 random professionals in any area and discuss going green, then incentives and taxation always come to the forefront. On tax, there's only so much power the EU has. But we are keeping our options completely open."

Too Complex to Measure

The Commission's consultants had considered an EU proposal for tax on cloud computing as well but concluded it would be impractical. This and other EU efforts to draft legislation to make cloud computing more energy efficient were hampered by the difficulty of measuring the environmental impact of such services.

"Legislation is a problem. Because if you want to enhance the sustainability of something, you have to measure it somehow, and measuring is a big, big problem for energy-efficient cloud computing. If you can't measure it, you don't have the possibility to have a law for it," said Dr. Therese Stickler, sustainable development expert at the Austrian Environment Agency, who made the policy recommendations in the EU report.

"We had a lot of discussion with experts at the European Commission on how to include cloud computing in the Energy Efficiency Directive (law). They said it was not possible, because there are too many intangible aspects in cloud computing that you can't really measure," she said.

The policy makers drew their conclusions from a cathedral-like schematic diagram of the many components that make up a cloud computing infrastructure, with fiber communications networks and data centers at the base and stack upon stack of software components. Energy-aware software and energy-saving networks were an aspiration but not within reach of policy makers.

"If you only look at the data centers, the material side of cloud computing, it's a little bit easier," said Stickler.

The Austrian agency gave multinational cloud and data center operators a chance to vote for their favored EU policy measures at an informal workshop last December. Alongside scientists, campaign groups, and officials from the EU, UN, and government bodies, they voted against EU proposals to impose energy-efficiency laws on their computing services. The group concluded that in addition to information campaigns, governments could do more to make data center energy efficiency more transparent and create standard measures to produce meaningful insights.

The proposal to impose mandatory efficiency targets on new or refurbished data centers had nevertheless made it onto the long-list of preliminary plans the EU has been exploring, the senior Commission official told DCK.

Many Ways to Regulate Data Center Energy

Meanwhile, the EU is already implementing laws to address data center energy efficiency. Foremost among them is its taxonomy regulation, a universal financial law that sets conditions for investors and financiers that want to claim their deals as green. Plans currently being examined by government committees and awaiting conclusion of a public consultation would in 2022 impose energy-efficiency conditions on anyone who claimed as green any data centers put up for collateral or lumped into a financial offering.

"Data centers are trying to portray themselves as being green when they ask for loans, and when they justify their refurbishments. And financial institutions often portray their instruments, which are principally bonds, as green," said the official.

"They say, 'Invest in my bond because it's green and would be good for the environment.' If part of the underlying assets are data centers, they would have to ensure those investments are poured into compliant data centers. They would be forced to back this statement up with compliance with the European Code of Conduct on Data Centre Energy Efficiency," he said. The same Code of Conduct -- which has been criticised for having no teeth -- was becoming the basis of other EU green laws. Stickler's policy report said it should be the starting point for further action.

Other laws being passed in Brussels include a reform that would make data centers part of the Eco-Design Directive, which stipulated this year that computer servers could not be sold for use in simple computing environments in Europe unless they met energy efficiency measures.

The Commission also has plans to update public procurement regulations, and it’s possible but not likely that public money would be precluded from being spent on data center services that did not meet green standards.

It is also drafting a law to make it more feasible to pipe heat from industrial sources like data centers into district heating projects. The Commission hopes other general industrial initiatives will count toward its tally of green data centers as well.

‘Breakthrough’ Research

The point of it all was to do something about the fact that, while the energy demand of cloud computing was growing exponentially, its energy efficiency was not.

"This growth is so strong that it has more than offset the significant efficiency gains achieved at all levels of hardware, software, and data centre infrastructure," said last week’s report.

By 2025, total data center energy consumption in Europe will increase 21 percent on 2018 levels, when data centers consumed 2.7 percent of all electricity in Europe, the report forecasted. Cloud computing will be responsible for 60 percent of all energy consumed by data centers by 2025, nearly doubling its portion’s size in 2018. 

The Commission official said the research was a "breakthrough," because it was the first clear estimate of data center energy consumption in Europe. It showed how previously existing forecasts of data center energy consumption differ wildly and called their veracity into question. Its own cautious forecast ventured only that Europe's data center energy consumption will reach 92.7 TWh in 2025, about three times as much electricity as the whole of Ireland consumed in 2018.

"It's possible the energy consumption of data centers will more than double in the next 10 years," said Dr. Ralph Hintemann, senior researcher at the Borderstep Institute, who authored the forecasts in the EU study. Recent events had not changed his forecast, he said.

"We know that in general, the data center market was affected very little by the [COVID-19] crisis,” Hintemann said. “There are some parts of the market -- especially [companies' own] on-premises data centers, where you have much less spending. But on the other hand, we have much more cloud computing. You have cloud data centers, where demand is increasing."