Cloud Lobby Group CISPE Urges EU to Harmonize Water Rules, Warns Against Burdensome Regulations
In an era where digital infrastructure is as critical as traditional utilities, the environmental footprint of the technology powering our connected world is under increasing scrutiny. Among the most significant concerns is the substantial water consumption by datacenters, facilities that house the servers and networking equipment essential for cloud computing, internet services, and artificial intelligence. As Europe grapples with the escalating impacts of climate change, including more frequent and severe droughts, the spotlight on industrial water usage, particularly by energy-intensive operations like datacenters, has intensified.
Responding to this growing focus, the Cloud Infrastructure Service Providers in Europe (CISPE), a prominent trade body representing the interests of cloud providers operating within the EU, has put forward a set of recommendations for the European Union's newly unveiled Water Resilience Strategy. CISPE's submission acknowledges the critical challenge of water scarcity and positions its members as both responsible water users and potential enablers of better water management through technological innovation.
However, the recommendations come with a clear message: while the industry supports the goals of water resilience, the implementation of new regulations must be carefully considered to avoid unintended consequences. CISPE warns that overly burdensome demands or a lack of harmonization across member states could lead to increased operational costs, regulatory fragmentation, and potentially deter future investment in European digital infrastructure, risking a shift of development to other regions.
The Growing Challenge of Datacenter Water Consumption
Datacenters require significant amounts of energy, and a substantial portion of this energy is converted into heat by the computing equipment. Managing this heat is crucial for maintaining optimal performance and preventing hardware failure. Traditional and still widely used cooling methods, particularly evaporative cooling systems (like cooling towers), rely heavily on water. These systems work by evaporating water to dissipate heat, a process that can consume millions of gallons annually for even moderately sized facilities.
Studies have highlighted the scale of this consumption. For instance, research from Oxford University indicated that a relatively small 1-megawatt (MW) datacenter employing traditional cooling methods could use approximately 26 million liters (equivalent to 6.86 million gallons) of water per year. Larger facilities, especially hyperscale datacenters, can consume vastly greater volumes. Reports from the US, a region with significant datacenter concentration, show some facilities consuming anywhere from 300,000 to four million gallons of water per day, depending on size, cooling technology, and climate.
This level of water usage becomes particularly problematic in regions experiencing water stress or facing increased drought risks due to climate change. Europe, in recent years, has seen heatwaves and prolonged dry periods impacting water availability for agriculture, public supply, and ecosystems. Policymakers are increasingly recognizing the need to manage all demands on water resources more sustainably, including those from industrial sectors like digital infrastructure.
Europe's Push for Water Resilience
The European Commission's Water Resilience Strategy is part of the broader European Green Deal, an ambitious package of policy initiatives aimed at making the EU climate-neutral by 2050. The strategy seeks to ensure sustainable water management across the Union, addressing issues like water scarcity, pollution, and the impacts of climate change on water resources. It aims to build a water-smart economy and society, promoting efficiency, reuse, and equitable access to water.
For the datacenter sector, this strategy signals potential new requirements related to reporting water usage, improving efficiency, and exploring alternative water sources. The goal is to align the growth of digital infrastructure with environmental sustainability objectives, ensuring that the expansion of cloud computing and AI capabilities does not exacerbate existing water challenges.
CISPE's Recommendations: A Path Forward or a Pushback?
CISPE's submission to the European Commission outlines four key recommendations, framing them as constructive proposals to support the Water Resilience Strategy while ensuring the continued growth and competitiveness of the European cloud sector. The recommendations reflect the industry's perspective on how best to balance environmental goals with operational realities and investment considerations.
1. Formal EU Framework for Industrial Water Reuse/Return Schemes
One of CISPE's primary recommendations is the establishment of a formal, Europe-wide framework to support industrial water reuse and return schemes. The core idea is to encourage and facilitate the treatment and reuse of municipal wastewater for industrial purposes, including datacenter cooling. This would reduce the reliance of datacenters on potable (drinking quality) water sources, freeing up these precious resources for human consumption, agriculture, and ecological needs.
Implementing such schemes requires significant coordination between municipalities, water utilities, and industrial users. It involves developing standards for water treatment quality depending on the intended reuse, building the necessary infrastructure for transport and treatment, and establishing clear regulatory pathways. CISPE argues that an EU-level framework would provide the necessary clarity, consistency, and support to accelerate the adoption of these sustainable practices across member states, avoiding a patchwork of differing local or national rules that could complicate operations for providers working across borders.
2. Incentives for Investment in Water System Modernization through PPPs
Modernizing water infrastructure – both public and private – is essential for improving efficiency, reducing losses (like leaks), and enabling advanced treatment and reuse. CISPE recommends creating incentives to drive investment in this area, specifically suggesting the use of Public-Private Partnerships (PPPs).
PPPs can combine the capital and operational expertise of the private sector with the oversight and public interest focus of government bodies. For water infrastructure, this could mean partnerships to upgrade municipal treatment plants to produce water suitable for industrial reuse, or joint ventures to build dedicated pipelines for transporting treated wastewater to industrial zones, including datacenter clusters. CISPE believes that financial incentives and supportive policy frameworks within a PPP model can unlock the significant investment required to build the water infrastructure needed for a more resilient future, benefiting both industry and the wider community.
3. Leveraging Cloud-Based Digital Water Management Solutions
Unsurprisingly, given its constituency, CISPE highlights the potential of digital technologies, particularly cloud-based solutions, in improving water management. The recommendation suggests deploying advanced tools such as digital twins, AI-powered analytics, and Internet of Things (IoT) sensors to optimize water systems.
IoT sensors can monitor water flow, pressure, quality, and temperature in real-time within datacenters and potentially across wider water networks. AI analytics can process this data to identify inefficiencies, predict potential issues like leaks or equipment failures, and optimize cooling processes to minimize water use. Digital twins – virtual replicas of physical systems – can be used to simulate different scenarios, test the impact of changes, and train operators, leading to more efficient and resilient water operations. CISPE argues that cloud infrastructure is the ideal platform for hosting and processing the vast amounts of data generated by these systems, enabling scalable and sophisticated water management solutions. This positions cloud providers not just as consumers of water, but as providers of tools that can help manage water resources more effectively across various sectors.
4. Ensuring a Coherent Water Resilience Framework Across All Industry Sectors
CISPE's final recommendation emphasizes the need for a coherent and harmonized water resilience framework that applies consistently across all relevant industry sectors, not just datacenters. The group warns against creating standalone, datacenter-specific water regulations that might duplicate or conflict with existing EU environmental frameworks or differ significantly between member states.
A fragmented regulatory landscape, CISPE argues, would increase complexity and compliance costs for businesses operating across the EU. This could disproportionately affect smaller providers and create uncertainty that deters investment. A harmonized approach, integrated with existing environmental directives (like the Water Framework Directive or the Industrial Emissions Directive), would provide greater clarity and predictability, fostering a level playing field and encouraging consistent adoption of best practices across the Union. CISPE stresses that water resilience is a challenge for many industries, and a unified approach is the most effective way to address it.
The Industry's Perspective and Potential Implications
CISPE's recommendations, while framed constructively, also carry an implicit warning. The statement that imposing new, standalone water regulations could increase costs, create fragmentation, and deter investment, potentially shifting infrastructure outside the EU, has been interpreted by some as a subtle threat. It highlights the competitive global landscape for datacenter investment and the industry's sensitivity to regulatory burdens.
Datacenter operators are indeed aware of their environmental impact, including water usage, and many have been working to improve efficiency for years. Metrics like Water Usage Effectiveness (WUE) are used alongside Power Usage Effectiveness (PUE) to measure environmental performance. Efforts have included optimizing existing cooling systems, implementing water recycling within facilities, and exploring alternative cooling technologies.
Roy Illsley, Chief Analyst at Omdia, commented on the situation, acknowledging that water use is an issue the industry is addressing. However, he suggested that the pace of change might not be as rapid as the EU desires, particularly given Europe's increasing vulnerability to drought conditions driven by climate change. This perspective implies that while the industry is moving, regulatory pressure might be seen by the EU as necessary to accelerate the transition to more water-efficient practices.
Andrew Buss, Senior Research Director EMEA at IDC, echoed the importance of addressing datacenter water consumption. He welcomed recommendations that encourage minimizing water use, emphasizing that potable or irrigation-quality water is a precious resource that should not be wasted. Buss highlighted the value of using non-potable sources such as gray water, captured rainwater, or even treated seawater where feasible, as well as maximizing water reuse and recycling within facilities.
The increasing power density of modern servers, particularly those optimized for AI workloads, presents a significant challenge for cooling. These high-density racks generate more heat in a smaller space, pushing the limits of traditional air cooling and even standard evaporative cooling methods. This trend is driving interest in more advanced techniques like direct-to-chip liquid cooling or immersion cooling.
Analysts agree that a shift towards liquid cooling technologies could significantly reduce the reliance on water-intensive evaporative cooling methods. While liquid cooling introduces its own complexities and infrastructure requirements, it offers the potential for much higher cooling efficiency and a lower water footprint, aligning well with future sustainability goals.
Balancing Sustainability and Digital Growth
The dialogue between CISPE and the European Commission reflects the broader challenge of balancing the rapid growth of the digital economy with urgent environmental sustainability imperatives. Datacenters are foundational to this economy, enabling everything from remote work and streaming services to scientific research and advanced AI applications. Their continued expansion is seen by many as vital for Europe's economic competitiveness and digital sovereignty.
However, this growth must occur within planetary boundaries. Water scarcity is not just an environmental issue; it's an economic and social one, impacting multiple sectors and potentially leading to conflict. Therefore, finding ways for datacenters to operate more sustainably, particularly concerning water use, is not optional but essential for long-term viability.
CISPE's recommendations offer a glimpse into the industry's preferred approach: collaborative solutions, technological innovation, and harmonized regulations that support investment rather than hindering it. The emphasis on water reuse, PPPs for infrastructure, and digital tools aligns with broader trends in sustainable resource management.
The EU Commission, in turn, must weigh these industry perspectives against the pressing need to build resilience to climate change impacts. The Water Resilience Strategy is likely to introduce measures that require greater transparency on water usage and encourage or mandate more efficient practices. The key will be designing these measures in a way that is effective in achieving environmental goals while providing a clear and predictable framework for businesses.
The potential for infrastructure flight is a real concern in a global market. However, Europe also offers significant advantages, including a large market, skilled workforce, and a strong commitment to the digital economy. Effective policy can leverage these strengths while driving sustainability, creating a competitive advantage for European datacenters that are leaders in environmental performance.
Moving Towards a Water-Smart Digital Future
Achieving water resilience in the datacenter sector will require a multi-pronged approach involving technology, policy, and collaboration. Technological advancements in cooling, particularly the move towards liquid cooling, offer significant potential for reducing water consumption. Innovation in water treatment and reuse technologies can turn wastewater from a disposal problem into a valuable resource for industrial cooling.
Policy plays a crucial role in setting standards, providing incentives, and ensuring a level playing field. A harmonized EU framework, as advocated by CISPE, could streamline compliance and encourage investment in sustainable practices. Public-private partnerships can accelerate the development of the necessary infrastructure for water reuse and efficient supply.
Finally, collaboration between datacenter operators, water utilities, policymakers, and local communities is essential. Open dialogue can help address concerns, share best practices, and develop tailored solutions that fit local water availability and infrastructure. Some regions are already pioneering innovative approaches, such as using waste heat from datacenters for district heating or partnering with municipalities for water reuse projects.
The conversation between CISPE and the EU Commission is a vital part of this ongoing process. It highlights the tensions and opportunities inherent in building a sustainable digital future. While datacenters are significant water users, they also have the potential, through technological innovation and responsible practices, to be part of the solution for broader water management challenges. The path forward lies in developing policies that are ambitious enough to meet the environmental imperative while being pragmatic enough to support the continued growth of the digital infrastructure that Europe relies upon.
As climate change continues to impact water resources, the pressure on industries with high water demands will only increase. The datacenter sector's proactive engagement, coupled with clear and supportive regulatory frameworks from the EU, will be crucial in navigating these challenges and ensuring that Europe's digital backbone is built on a foundation of environmental resilience.