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Good morning. I'm Justin Hendricks, editor of Tech Policy Press. We publish news, analysis and perspectives on issues at the intersection of tech and democracy. As Brussels prepares to unveil a tech sovereignty package on June 3, the political tone around Europe's digital infrastructure is shifting. A draft strategy frames this moment as the decisive push to actively build European capacity in cloud computing and AI. At its core is a proposed Cloud and AI Development act aimed at accelerating data center construction and expanding domestic capability over the next decade. But this expansion comes with unresolved tensions. Here's Tech Policy Press senior editor Ramcha Jahangir, who explored these tensions with her guests Nico Schmidt and Christian van Veen.
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The European Commission is expected to lay out a new package tied to its push for techstop readnity, the idea that Europe should be able to run its own digital infrastructure rather than rely on foreign providers. As part of the package, the Commission is expected to drop several major pieces of legislation, including energy efficiency rules, new rating system for data centers, groundwork for binding minimum performance standards from 2030, and the Cloud and AI Development act, the law that would triple EU data center capacity in five years. The buildout is moving ahead with limited transparency about its environmental footprint. An investigation by Investigate Europe, published with partners including Tech Policy Press, found that an EU framework meant to track data center energy and water use has been weakened in practice. A confidentiality clause added after industry lobbying allows companies to keep site level data out of the public domain. Commission data cited in that reporting shows a significant share of operators that are supposed to report those metrics haven't done so. And on the ground, including in the Netherlands, researchers are seeing a mixed picture. Patchy compliance in some cases, data centers running well below capacity, even as the industry argues more are urgently needed. Today we're speaking with the journalist behind that investigation at Investigate Europe and a think tank looking into what this push for tech sovereignty actually looks like in practice.
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Hi, I'm Nico Schmidt, I'm an investigative reporter. I work with the journalistic team Investigate Europe. And yeah, I'm specialized on all topics around AI accountability, such as the story that we are also going to speak about today.
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Hi, I'm Christian van Veen. I'm trained as a lawyer and I'm one of the co founders of Leitmotif, which is a think and do tank that focuses on the production side of the digital economy and how to make it within planetary boundaries and fair.
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Thank you so much both of you for your time. I think it's a very Interesting time to have this conversation. Next week, the European Commission is expected to drop several major pieces of legislation as part of their tax sovereignty push. It's been a month since we published, in partnership with Investigate Europe, this very, very explosive piece on transparency around data centers. So I think it's a very interesting and specific moment to be happening this conversation. Maybe we could start with what the story was, Nico, what your investigation was about and what has happened since it was published.
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Yeah, for sure. And thanks for having us. Ramsha. So the story that we published with you, it goes back to 2023, when the European Union decided on what's called the Energy Efficiency Directive. This Energy Efficiency Directive was one of the first steps in kind of starting to regulate the energy usage or even make transparent the energy usage of data centers. And part of this directive also involves the data center operators to submit a certain amount of key performance indicators. Right. So we're speaking about things like their water consumption, what are the sources of their energy. And basically then shortly after, the Commission started to work on what's called a delegated act. Yeah. So they were working in a second law piece. They were working on the specifics. There was the mandate to work on what key performance indicators actually should be submitted by the data center operators. And for me, the work now started much later in 2026, three years later, with the tip off. And that tip off told me to take a closer look at the submissions that were made by the industry in this process. Right. So at the European level, I guess, as some of the listeners know, when the European European Commission comes forward with the proposal, then there's a time for public consultation. And in this public consultation, they receive a number of submissions. You know, and sometimes these can come from private people, they can come from non governmental organizations, but they can also come from companies and bigger associations. And we specifically took a closer look at the submission submissions by Microsoft in Digital Europe. And both of them not only had something to say about what key performance indicators data center operators should submit, but they also were very frank and very open about the fact that all of this information that should be submitted should be put under total confidentiality. So basically, they proposed the law article to go into this delegated act. And this law article explicitly said that no access to information or no access to environmental information could be applied here. All of the information submitted by the data center operators would be totally off limits. Now, that's not surprising. I mean, when these processes happen, there's a lot of lobbying and that's fair game. Right. But what Was then really surprising was that when we looked at the final text of this law that we found, this suggested law article by Microsoft and Digital Europe, word for word, mostly, there were like a small change of words. They corrected one typo. But we found it in the law and that was really, that was really surprising for us. Yeah. You could also say that even maybe this. Yeah, very blatant procedure was almost. It had its good side in that it really allowed us to show the influence here. Right. Because usually it happens over a thousand small steps, a thousand small conversations. But here was just so blatant that it was really, it was really easy for us almost to show how this has been done. And once we found this, of course, we also had a couple of conversations, me and my co reporter, for example, I spoke to a lot of senior law scholars and I asked them, hey, is this article and this blanket exclusion from all access to information, even in line with other laws that are existing? And that frankly I, as a journalist use quite often, and they unanimously said, no, this is not in line with existing legislation. And this is basically the core of the story that we published with you.
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Very significant reporting with significant impact. I think just last week there was outrage in the Parliament and some parliamentarians also wrote to the Commissioner demanding that the clause be revised in early June. And they're basically calling it unlawful. So has the Commission responded since?
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Yeah, so that's really interesting because we saw quite some reactions to the reporting. And of course, you know, when, when you write an article like the one that we did, we tried to confront the Commission and we, we tried to give them a chance to fair reply.
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Right.
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So one thing that I also maybe didn't mention before was that we did not only find that the Commission included this article at Lib in the final law, but even after they published the law, they went after the member states and sent them at least one email where they urged them to not give out this information. Because the way that it works is that the data center operators submit their data. In most European member states, there is an exception for the Netherlands and Germany that have set up like their own database. But in all other member states, they directly, the data center operators enter their data, you know, in a website. However, the national authorities have access to this information always only for their country. But for example, the authorities in Czechia can see all the data for Czechia, and so you could also file a request to them, ask them for this information. However, the Commission went all the way through and urged them to under no circumstances release this data because they had received a number of requests and had turned all of them down. So, I mean, they were even going out there and enforcing this. Now, this is one of the things that we confronted the Commission with prior to publishing the article with you. And yeah, we didn't get any on the record answer. And now there was this letter that you mentioned. So the background of this letter, where 35 MEPs got together and kind of urged the Commission to take action and end the secrecy, is also not only a reaction to the old law, but we also have, as you already mentioned before, we have a couple of laws coming up. And one of these laws is actually a new delegated act that goes back to this energy efficiency directive and could potentially revise the secrecy clause.
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Right.
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There are going to be like small changes that they have proposed because they want to publish what they call labels for data centers. But they still, the overall secrecy, apart from some information for these specific labels for each data center, is going to stay widely intact. And the MEPs now ask them, please end this, please make this information available. We have confronted the Commission on the record during a press briefer, but all we got is that in that moment they could not respond. And even afterwards, all we got from them is that they would not comment before early June, when they have until now planned to come forward with the law package on whether they would do any further changes to the secrecy clause.
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If I may come in there briefly, Nico, and first of all, great reporting. I was very impressed with what you published last month. One question I think we should ask ourselves is how could it be that such a secrecy clause was injected verbatim from an industry lobbying paper? And as you say, lobbying in itself is fair game, but I think we need to see it in its broader context. My colleague at Leibmotif, Max Schultze, was lobbying for more transparency in 2023 in this context for the ED, and he was there lobbying for transparency, and he said there were more than 100 lobbyists lobbying on the other side. And so we see this complete disbalance on issues of digital infrastructure and sustainability between the lobby power of the industry itself and influenced by civil society. And so that this balance then causes a commission to lean towards one side much heavier than to another side. Even though you would say that Even if there's 100 lobbyists in a room from the industry and only one lobbyist in the room from civil society, still the Commission should be thinking in the public interest. But I think the outcome reflects the lobby power of the industry and just
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Maybe to briefly add on what Christian said. I mean, while the commission didn't comment on the record, I was able to have some conversations off the record. And what became quite clear was that the European Commission is quite concerned that data center operators would stop reporting any data from their data centers if this data would be made public. I think that is certainly an argument that you could make, but I was at the same time astonished because there is no other industry where something like this would happen. Right. When I discussed this with colleagues, they were asking me, wait, this is what the Commission is saying. But then they, they would not report. So is this a voluntary mechanism? And then I had to tell them, like, no, it's actually not a voluntary mechanism. Right. And so maybe rather than being led on by industry pushback, where they would hint at not reporting data at all, there should be more work towards proper enforcement. Because I also reached out to a number of national authorities and asked them, you know, have there been any cases of enforcement on your side? And the number of, of enforcement cases that have happened are quite small. And at the same time, we are now already two cycles through this data center reporting. And what we've seen in these cycles, and I think Christian is going to speak a little bit more about that in a short moment, is that many operators don't report or don't report meaningful data, but there seems to be no consequences. And if there is no consequences, then of course you can be scared to, you know, that they will just stop reporting altogether.
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I fully agree with that. I mean, it's a rule of law issue. If you have laws on the books that have requirements. And it's a bit nonsensical to say we're not going to hold companies to those requirements because we're afraid otherwise they won't comply. And we can talk a bit more about this. But yeah, I see that lack of enforcement in the, in the Netherlands as well.
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Yeah. I also want to tap into the resistance aspect at least. Certainly we're seeing in US and for instance, Brazil, and there's been a lot of reporting on pushback and including lawsuits against data centers. So we can come to that in a bit. Christian, you've actually looked at actual filings in Netherlands, which is Europe's most data center dense countries in Europe, you could say. So what have you found with the actual filings and what compliance looks like in practice?
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Yeah, thanks for the question. I think it's important to realize that under the eed, data reporting can happen in two different ways, either via national reporting scheme or directly to a European database. The Netherlands is an interesting case study because it's one of the few countries in Europe that has a national reporting scheme implemented by the Dutch Enterprise Agency, which is part of the Ministry of Economic affairs and Climate and also quite exceptionally in Europe. The Dutch authorities shared the information they collected from the industry with the general public. So they put the spreadsheets that were sent in by the industry on their on their website. And we looked at those spreadsheets for the reporting year 2024. So those were handed in in 2025. And what we did is we looked at the spreadsheets, built an internal dashboard to get an overview of the data, and then analyzed it. And we basically reached four main conclusions from analyzing the data. So first of all, many data center operators that are active in the Netherlands and are under an obligation to report did not report at all to the Dutch authorities. So Dutch authorities received 104 reports, even though we estimate that there are about 160 data centers in the Netherlands that are actually required to report under the then the second conclusion from the data was that many reporting data centers have reported, but have withheld essential information on their environmental impact in their reports. So for instance, we looked at electricity consumption. Then we add up all the reports for the Netherlands, it adds up to a little bit less than 1 terawatt hour of electricity in 2024, even though our statistics authority has calculated that electricity used by data centers is five times that amount. So there's a lot of under reporting in the reporting. And then thirdly and importantly, we have seen that reporting under the ED is especially low among data center facilities that are ultimately owned by US companies. So for instance, out of the 27 data center facilities that did not report at all on their electricity use to the Dutch authorities, 24 of those were ultimately owned by U.S. legal entities by by our count. And then fourth, and finally, also relevant is that we looked at, based on the data, the current occupation rates of data centers, which is a highly relevant factor because both at the EU level as, as nationally, governments are keen on increasing that capacity in the Cloud and AI Development act. The European Commission wants to triple EU data center capacity in the next five to seven years. But when we looked at the occupation rates, it reveals that reporting data centers are nowhere near full capacity. So we reveal that on average, the data centers that have actually reported to the Dutch authorities, they're only about at 1/3 of their total electrical capacity. So in other words, they're the 2/3 empty. So interesting things could be gleaned from, from this Dutch reporting. And that's because quite exceptionally, again, Dutch authorities have been relatively open about the data received.
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And it kind of also cuts against the industry's main arguments, right. The fact that data suggests, for instance, in Netherlands they're running at around half capacity or less. So it's interesting and it's also sort of the broader tension here at the heart of the EU's tech sovereignty push, also with the upcoming Cloud and AI Development act proposal, that they're trying to frame it as Europe trying to take back control. But then at the same time, if the facilities firstly are predominantly US owned, they're the least compliant. And then there's also the capacity questions. So how are all these things shaping up ahead of this launch next week? And what does this say about the Commission's priorities? I keep coming back to this question, that data. And there's so much reporting that's saying otherwise, but if are any of the decision makers actually listening?
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Well, one thing to say, and I'm sure Nico has things to say about that as well, but. So we send in a submission on the draft Cloud and AI Development act last year, and this was exactly the argument we brought forward to the European Commission in that submission, namely that we currently have no transparent facts on current utilization rates of digital infrastructure in Europe. So how much data center space is rented versus space that is actually utilized, how much electrical capacity is allocated to data centers that is actually used inside data centers. And we wrote to the European Commission in that submission, and I quote, before implementing policies to grow data centers facilities across Europe, we urge the Commission to conduct a full assessment of the utilization rate of existing data center capacity in Europe. This could be done in part using the information collected on data centers under the eed, and we will have to see whether they've listened to us at all. But this shows the importance of having transparency regulations. So you can use that for policymaking, which is exactly what it says in the ED as the rationale for having it in the first place. Which is why it's so troubling that compliance with the transparency rules is low.
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And maybe just to add one point to what Christian said, because I think, you know, it's a fair call to want to have kind of an overview of the consequences of the utilization of data centers before the Cloud and AI Development act, but maybe before we have that, we should even know how many data centers exist in Europe. If you, for example, reach out to member states and ask the responsible authorities how many data centers actually exist in your countries, there is a large number of member states that do not know this number. And when you look at European Commission report that are often being referred to and you go to the footnotes, you see that in some of these studies they just, you know, they take the numbers from datacentermap.com that is not a bad website. Right. But if you go to datacentermap.com and you look up the information that they pose about themselves, it's I think a one person run entity and they very much admit that their overview is not complete. But this is the numbers that are being taken from the, from the commission at Lib. And I think it's really. Yeah, that is also something that surprised me to be fully frank. And I think there is still some work to be done in order to see how many data centers do we have and then of course also to see how much are they being utilized, what are the consequences that they bring. And they were still lagging behind I would say.
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I can say one more thing that Nico, I fully agree that even at that very fundamental level like how many are there? We don't know it's affecting policymaking. I've talked to policymakers who are doing for instance research into the economic impact of data centers. But you first need to know how many, how many there are in the first place. And so this is exactly one of the reasons why we are at Leibmotif in favor of the EU wide moratorium on new large scale data center development. We think we need to hit the pause button right now in Europe in order to see where we're currently at with regard to AI and the data centers powering AI and its environmental impact as well as many other impacts. So we can chart a different course. And if we don't think things over properly right now and take evidence into account, I think the risk is that these developments have building digital infrastructure will just continue and it will be too late once it's there to still change course.
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Politically, of course it's heading in the complete opposite direction. Right. With the plans to triple data center capacity. And that's what we're seeing. They're not really in connect with what's happening in practice. I do want to come. It's interesting because the lack of information and transparency also affects resistance against data center developments. Netherlands in particular I think is a very interesting history of Flashpoint meta Google. I think also Microsoft have had their data center developments paused because of local resistance. So how much of this resistance or the lack of it was specifically driven by the Inability or, you know, to access information. And this vacuum space of people just don't know what's happening and what these facilities actually do. And it just doesn't have to be the Netherlands case, but also elsewhere, if you're seeing the lack of resistance or resistance propping up and how the lack of transparency is shaping these efforts, I
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think it's a big part of the story. The Netherlands is interesting, as you say, because there has been quite some resistance over the last few years. And the case of Sebald is especially relevant in that respect, I think. So, just for background, META planned the hyperscale project in, in the village of Seybold almost half a decade ago. And there would particularly pissed off people, to put it that way, was the lack of information they received about the project, was a lot of secrecy around it. There was the feeling locally that democracy wasn't functioning because the local government was seen as cooperating very closely with the Meta instead of representing the public interest, sort of more or less in line with what we just said about the European Commission and the ed. And so that caused significant unhappiness locally, which then led to media attention, which then had a heavy impact on local elections there. But it was an administrative appeal before a court. META abandoned it, the project before, before the case was finished and moved to Spain, by the way, with the same project. What's interesting is that that sort of resistance, then, it's very potent, people very upset, but it also has an impact because not only did the project stop, but national politicians were quite shocked about the political implications, then introduced a ban on hyperscale development in the Netherlands, except for two specific locations in the Netherlands. So that was a direct outcome of that controversy. So I think the silver lining, if you want to put it that way, is that lack of information leads people to be upset, but that then also leads to meaningful, meaningful regulation.
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I'm also curious to understand if there are disclosure frameworks anywhere in the world that are doing what's needed. I think in Germany, there has been a binding efficiency threshold for new data centers. In Singapore, there are green data center standards. There's also, I think, a recent US proposal that requires hyperscaler facilities to produce publicly accessible results. So are you seeing any of those conversations as well within Europe?
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I think, you know, at the end of the day, the ED is probably one of the most progressive regimes that we have globally, and it's under threat because I think there has been a lot of pushback against it and, and talk of maybe easing the rules in the ed. Even, even though they're not that demanding, by my, by my account. So I wouldn't necessarily know that. Many other similar frameworks that are very effective, of course, we're still in the early days of testing other legal frameworks. Journalists and organizations are doing FOIA requests, they're exploring litigation objects or options. So I think there's still a lot of frameworks that haven't been properly tested either. But maybe to mention one what I think, quite hopeful example from, from Chile. So I recently spoke to Marina Otero, who did work in Chile with local communities resisting big tech data centers, including by, by Google. And one of the things you mentioned was that the government there forced companies in the context of this policy development to sit together with local communities and with the government to answer questions that local communities had. And as she put it, that put the company on the spot because they were there answering questions. That kind of setting was quite productive where the government leaned in and said, you need to answer the questions that these local communities have. And I think that comes to broader point, will only get anywhere if, if the popular resistance that exists is then translated into good laws and regulations. And as Nico said, very importantly, those laws are also then properly enforced by government.
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And I think just to maybe add on this, I think it's very important to have an active civil society, but I think it's also important for those to speak up who see things differently. Right. And I think what, what Christian highlighted before is that there's a certain reluctance to report from U.S. companies. When you look at who is doing the lobby, it's mostly US companies, be it the co locators, be it the hyperscalers. And when you look at industry submissions from European companies, you hear through the lines quite other tones, right? But I think because honestly, this energy efficiency directive, it could also be an instrument to, you know, steer more competitiveness. If the numbers would be out there, open, maybe, for example, public bodies could do a more informed decision on what data centers they want to use. Right. This decision currently they cannot do, but it would definitely, it could trigger some competitiveness and that might be in the interest of European companies. But I think until now European companies have not been outspoken enough to maybe make the case in order to make this data actually public that they are quite thoroughly submitting, at least if you look at the Dutch case, just, I
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think was it last week that the EU's own environmental agency published a warning as well, wishing for more transparency. But it's just very interesting when the EU already has the tool, but it's more that they chose to classify that data as confidential. Right. So just ahead of next week, and also for the path ahead, what are issues you will be paying attention to and what are you hopeful about?
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Yeah, I think for my work it's going to be an interesting week next week. The first question is, of course, is actually happening, is next week going to happen what they announced? Because we've seen the commission postpone this quite a few times now. So I wouldn't be surprised if at the last minute there's some postponement. But of course you definitely see now the difference unfolding. Right. On the one hand you have the Cloud and AI Development act that is committing to investment to triple the data capacity in like five to seven years. And on the other hand, you have like quite loose commitments when it comes to the sustainability of data centers. Right. So actually it's going to be quite interesting to look closely at the final law text and look for, you know, even the smallest formulations that could be in favor of more secrecy, for example, that could also be in favor of greenwashing because this is also one of the things that we are seeing now some lobbying around is like accounting tricks on how you can factor in renewable energy. And then there is of course also the question, what, what, what is like the long term perspective? Because we also have some, as part of this bigger package, we have some measurements that are just going to come into effect over the long time. But we see now industry being quite smart and trying to very early on, for example, lobby against certain legislative tools or certain enforcements that are just like very far on the horizon. So what we're also seeing since January is work on a new study that was commissioned by the European Commission where they ultimately want to set minimum performance standards. But these minimum performance standards are exactly, as the name says, really minimum performance standards. They would ultimately, you know, go after the oldest, the smallest data centers. However, and the study is about to run for two years. So it's only going, the study work will only be finished in early 2028 and then there is supposedly a long phase out going to take place until certain data centers would not hypothetically be allowed to operate anymore that have like very old technology. But now we saw recently already the industry trying to go against this. I was wondering why they are doing this because a new data center would not fall under this. But I think we really see them being extremely mindful and trying to fight off any kind of enforcement, any kind of meaningful regulation, even in the earliest stages. Because I think part of the fear is that once you've established something, you could always then slowly rise the threshold until potentially it will also target bigger companies and bigger and newer data centers.
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The bigger picture is that until quite recently, the development of digital infrastructure in Europe, in large part by non European Commission companies, as Nick already said, has been welcomed by the EU and by EU governments. So as recently in a meeting where a government official said like for years the policy here was the industry asks and we deliver. And that has been the paradigm for regulatory efforts in Europe on digital infrastructure. So given that context, I'm skeptical that things will changed just overnight. But what did change recently, of course, as we all know, is that there's now a significant geopolitical tension between the EU and its former close allies. And given the fact that many of the biggest companies in the digital infrastructure sector are not European and those political sentiments in Europe right now, the political calculus around digital infrastructure and being critical about it is also changing. But still, even something as relatively benign as calling for transparency done by the head of the EEA has become a political hot potato because of those geopolitical tensions. Which is why policymakers are still so careful on this front, I think. So what is needed for civil society organizations, for grassroots activists at the local level, for media as well, is to just keep highlighting the worrying research on the impact of digital infrastructure on energy consumption, on meeting our climate goals. And we need to keep focusing on showing those facts to policymakers and politicians so they cannot ignore those facts and take them into account. Because if you are genuine about wanting to undertake rational and evidence based politics and policymaking, you need to take those facts into account. And I think final thing to say is that ignoring those facts on the impact of this industry is just lunacy. And I'm sure there are lots of European policymakers that would agree with me on that.
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Nico and Tristan, thank you so much for putting those facts out in the world and for the work you're doing and also continuing to partner with us. Just thank you so much for your work and your time today.
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Thanks so much for inviting us. Ramsha.
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Yeah, thank you so much Ramsha.
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That's it for this episode.
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I hope you'll send your feedback. You can write to me at justinettechpolicy Press. Thanks to Ramsha and her guests, thanks to my co founder Brian Jones and thank you for listening.
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Tech policy press.