On 24 June 2026, the German government adopted a draft Act to accelerate the Transposition of the Energy Efficiency Directive (the “Draft”). Aimed at transposing the remaining requirements of the Energy Efficiency Directive (Directive (EU) 2023/1791 – EED) into national law, the proposed legislation also seeks to reduce administrative burdens while scaling back requirements of the current Energy Efficiency Act (Energieeffizienzgesetz, “EnEfG”) to the minimum necessary under EU law. However, the Draft delivers only some of the anticipated relief for data centre operators. Most notably, PUE will still be assessed on an annual-average basis, a requirement that poses practical challenges for many data centre operators.
Under the EnEfG, data centre operators have been required to comply with minimum energy efficiency standards since 2023. Key obligations address power usage effectiveness (PUE) – the ratio of a data centre’s total annual energy consumption to the energy consumed by its IT equipment – as well as waste heat use and the sourcing of electricity from renewable energy sources. The Draft introduces changes across all three areas.
More moderate efficiency requirements and longer compliance deadlines:
The Draft introduces a moderate easing of PUE requirements for existing data centres. Facilities in operation before 1 July 2026 will be required to achieve an annual-average PUE of 1.6 from 1 July 2027 and 1.4 from 1 July 2030, compared with the current thresholds of 1.5 and 1.3. The adjustment acknowledges that older facilities, and critical infrastructure sites in particular, must meet high availability and redundancy requirements.
For data centres that begin operations on or after 1 July 2026, the PUE threshold remains unchanged at 1.2.Although the ministerial draft provided for some relaxation of this requirement, the cabinet draft no longer includes such changes. It does, however, extend the period within which operators must achieve compliance on a sustained annual-average basis from two to four years after the start of operations.
The methodology for assessing PUE, however, remains in place, with compliance measured on the basis of annual averages across both IT equipment and building infrastructure. This continues to pose challenges for operators, as the efficiency and utilisation of IT equipment are often beyond their control and can typically be influenced only through contractual arrangements with users. An alternative approach would have been to tie the PUE assessment more closely to the underlying design of the data centre, resulting in a more stable compliance framework. Such an approach was reflected in earlier drafts published by the Federal Ministry for Economic Affairs and Energy (BMWE), but has not been carried forward into the current proposal.
Greater flexibility for waste heat use:
Data centres are already subject to minimum energy reuse requirements of 10% for facilities commencing operations from 1 July 2026, 15% from 1 July 2027 and 20% from 1 July 2028. While these thresholds remain unchanged, the Draft introduces greater flexibility in how they can be met. In future, compliance will no longer depend exclusively on data centres supplying waste heat to third parties. Internal use of waste heat will also be recognised, in particular where it is used to heat office and operational premises, although the practical significance of this change is likely to be limited.given the low heating requirements of such areas.
In addition, the Draft allows data centres to deviate from these minimum reuse targets if they are connected to a heat network. This reflects the fact that some data centres already feed waste heat into heat networks, making a meaningful contribution to decarbonising local heat supply, but may still fall short of the prescribed thresholds where network capacity is insufficient to absorb the required volumes of heat.
The Draft also introduces an exemption from the minimum energy reuse requirement where connection to an existing or planned heat network is not technically or economically viable. In practice, this is likely to be one of the most relevant scenarios, as suitable local uses for waste heat are often lacking. For data centres with a nominal total energy input of more than 1 MW, this must be demonstrated by means of a cost-benefit analysis. As a result, the current obligation to implement investment measures for the avoidance and use of waste heat will no longer apply to such facilities. Instead, operators will be required to carry out a cost-benefit analysis of the use of technically unavoidable waste heat as part of planning new projects or refurbishments. Whether the measures identified are ultimately implemented will be left to the operator’s discretion. This exemption is intended, in particular, to give large AI data centres more flexibility when selecting sites, given that locations with sufficient grid capacity often lack suitable heat network infrastructure. Accordingly, operators are already required to make allowance for sufficient space during planning and construction so that the systems needed to utilise waste heat – in particular heat transfer stations – can be retrofitted later with as little structural work as possible.
- Electricity sourcing: Data centres are already required to match 50% of their electricity consumption with electricity from renewable energy sources. In the long term, that figure will be required to increase to 100%. Under the current rules, the 100% requirement is set to apply from 1 January 2027, but the Draft postpones the deadline to 1 January 2030 in order to reduce administrative burden and improve practical feasibility.
The legislative process has not yet been completed; changes may still be made as deliberations continue in the Bundestag and Bundesrat. However, given the ongoing EU infringement proceedings concerning the delayed implementation of the EED, swift adoption is expected.
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