EUDCA launches its inaugural State of European Data Centres Report

Europe’s data centre industry is the backbone of European economic growth and digital sovereignty. It is critical that timely, insightful annual data with informed analysis provides a basis for industry assessment and performance into the future.

The perception of data centres has undergone significant changes, particularly given their role in driving digital innovation and the digitalisation of our society, fuelled by advancements in artificial intelligence (AI).

This year marks a significant milestone for the industry, as it underwent the first reporting cycle and, more recently, the second in May 2025 under the Energy Efficiency Directive (EED), emphasising the transparency and sustainability of our operations.

The European Data Centre Association’s (EUDCA) first State of European Data Centres report, in collaboration with European National Trade Associations (NTAs) provides an in-depth understanding of the market, identifying its fundamentals, exploring its opportunities, and acknowledging its challenges.

The report provides valuable insights to achieve the sustainable development of the data centre industry in Europe. Building on this baseline, further annual reports will gather additional data for analysis, tracking development and progress.

This moment in history is pivotal, where rapid technological advancements often outpace regulatory responses. This industry’s commitment to powering the digitalisation of Europe remains unwavering, but requires policymakers to provide stronger support and clearer signals to encourage investment in Europe.

Continuing the journey toward sustainability is now more crucial than ever. The goal is to foster a fully sustainable and digital Europe, providing the necessary knowledge and expertise to achieve this vision for the industry.

Beyond the technological significance, the industry profoundly impacts Europe’s socioeconomic fabric. Colocation data centres alone contributed €30 billion to GDP in 2023, with projections soaring to €83.8 billion by 2030.

In tandem with the economic contribution, the sector fosters job creation, directly and indirectly, while annual investments in construction and operations inject billions of euros into local economies, spurring innovation.

As Europe contends with global competition, the data centre industry remains an indispensable force in upholding digital sovereignty and mitigating geopolitical risks.

The data centre industry also faces significant challenges, including power supply constraints, permitting delays, and a growing skills gap in technical fields.

More than 75% of survey respondents consider access to power as the biggest challenge for the sector in the next three years, despite a willingness to invest in alternative solutions to access power. Energy costs are also a concern, as rising wholesale prices impact operators.

The additional responsibility of regulatory compliance was also significant, with more than a third (36%) citing it as a major challenge in the near future.

There are significant concerns that duplication and redundancy in reporting frameworks will deter compliance, reducing effectiveness and frustrating regulatory goals. The EUDCA reaffirms its Manifesto commitment to achieving consistent and transparent reporting by working with regulators and European policymakers to ensure that regulations are fair, efficient, and encourage positive behaviour.

The EED, for example, while important in establishing a baseline for transparency in performance, does not cover a significant proportion of the data centre infrastructure in Europe.

As Figure 1 shows, there are significant numbers of small and enterprise-owned data centres that do not fall under the directive, meaning a true picture of data centre efficiency is not possible with the current regulation.

The data centre industry already employs thousands of people and contributes significantly to the GDP growth of Europe, and yet it still struggles to be considered an attractive career option. More than 50% of survey respondents considered the lack of data centre-oriented studies as the main cause for shortage of people in the industry.

Addressing these issues will require coordinated efforts in grid infrastructure improvements, streamlining regulatory processes, and investing in education and diversity initiatives to develop a skilled workforce.

Even with these challenges there is significant cause for optimism. The European data centre market is experiencing significant growth, driven by the increasing demand for cloud services, AI-driven applications, and edge computing technologies.

Data centres are essential to Europe’s digital infrastructure, supporting a wide range of services. In addition, the industry’s growth also contributes to Europe’s GDP, employment, and overall economic development.

With a direct GDP contribution of €30 billion in 2023 and a forecasted annual growth rate of 15.8%, the colocation sector’s economic importance will continue to grow, reaching an estimated €83.8 billion by 2030.

The report identified almost 9,000 enterprise data centres with a capacity of 50 kW or more, though most are relatively small. When considering large data centres with a capacity of 5 MW or more, colocation data centres dominate.

While enterprise data centres remain the most common in terms of numbers, scale colocation and hyperscale data centres have outgrown the enterprise market in terms of IT power, which varies strongly by country.

Outside of Frankfurt, London, Amsterdam, Dublin (FLAPD) and Nordic countries, the enterprise market generally still represents more than 50% of IT power. There is also strong growth in areas such as Madrid and Milan, but also emerging centres such as Barcelona, Rome, and Athens.

Colocation and hyperscale facilities are typically more modern and provide higher power (kW) per rack compared to enterprise data centres. Between now and 2030, there will be very strong growth in all commercial segments, but most strongly in the scale colocation and hyperscale markets.

Sustainability will remain a key focus for the European data centre industry. Although data centres consume significant amounts of electricity and water, they are leading in the adoption of renewable energy sources and innovative efficiency solutions.

More than a quarter (28%) of operators have invested in on-site renewable energy generation capability, and 41% plan to do so. In support of these efforts, 28% are planning on installing battery energy storage systems (BESS) within the next two years.

Currently, nearly a quarter (22%) of data centre operators provide grid stabilisation or energy trading capacity to energy grids, greatly facilitating further utilisation of RES for users. This will almost triple (59%) in the next two years.

Another bright spot is the improvement of water usage. Of those operators who reported water usage effectiveness (WUE), the average was 0.31 litre per kWh for 2023, well below the Climate Neutral Data Centre Pact (CNDCP) target of 0.4 l/kWh for water-stressed areas.

The industry is also advancing technologies such as liquid cooling and heat reuse to improve efficiency and reduce its environmental footprint. Currently, half of operators have residual heat coupling capability, with a further 38% expected in two years. Already, three quarters of operators have energy or environmental management systems in place.

These efforts align not just with regulatory initiatives such as the EED, but also the voluntary CNDCP that focuses on improving energy efficiency, transitioning to 100% renewable energy, reducing water consumption, promoting a circular economy by reusing and recycling equipment, and reducing greenhouse gas emissions overall.

Data centre operators are also aware of their position and impact in communities. Many large operators have made significant investments in STEM skills, bringing them to schools and attracting future talent.

Some data centres allow staff to spend work time on charity and community projects. Others have funds for community projects that are available for diversity initiatives. Typically, there is a strong focus on sustainability and green projects, including biodiversity and habitat renewal.

The data centre industry is undergoing vast change even as it experiences unprecedented demand and growth. Its relentless focus on efficiency has meant that it is adapting well to sustainability demands, supporting efforts for compute sovereignty and data protection, as economies become increasingly digital.

The State of European Data Centres Report 2025 is a first, important step in documenting and recording the state of the industry to allow greater analysis and insights, tracking progress and development.

The report faithfully reflects a vibrant industry that is experiencing challenges but also growing potential to be at the heart of a digital Europe.

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