Earlier this year, the German government laid out an ambitious plan: By 2030, it would double the scale of the country’s data center fleet, and quadruple the amount of compute available for running artificial intelligence models. The idea was to minimize Germany’s dependence on the United States for access to AI—a point of concern across Europe—and boost its faltering economy.
However, Germany has found that its AI ambitions are butting up against its climate commitments. EU member states have committed to cutting greenhouse gas emissions by 55 percent by the end of the decade. But policies meant to help meet that target are interfering with attempts to trigger a data center building frenzy.
As part of its broader climate commitments, the previous German administration voted through the Energy Efficiency Act in 2023. Among other things, it required all new data centers to recycle a portion of the waste heat generated by their computer equipment, ideally into nearby municipal heating systems. It seemed like a no-brainer, says Patrick Graichen, who served as a senior official at Germany’s Ministry for Economic Affairs and Energy at the time, before resigning over cronyism allegations.
“We need clean heat, and data centers are a source of clean heat,” Graichen tells WIRED.
In June, a month before the rules were due to finally take effect, the German federal government walked them back. Data center firms had complained that the requirements made it almost impossible to build in the country; the German Data Center Association characterized an early version of the bill as a “data center prevention act.” Under an amended bill, which will be put to the German parliament for ratification imminently, data center operators would no longer be obligated to reuse waste heat, only to scope out the possibility.
Graichen and others have accused the German government of sacrificing climate targets for a chance to ride the AI wave. But countries across Europe find themselves pulled between these same two poles, under simultaneous pressure to cash in on rapid growth in the energy-intensive AI sector—and limit dependence on the US—and to protect the climate.
The German Ministry for Economic Affairs and Energy did not respond to a request for comment.
Among data center developers, the chief objection to the original Energy Efficiency Act was the chance it could land them in an impossible bind, obligated to reuse waste heat even when there was no available offtake—whether a municipal heating system or an industry, like greenhouse agriculture. “Some of the things they had to comply with were outside of their control,” says Barbara Smitten, associate director for critical systems at consulting firm Cundall. “It felt that [the burden] was all on the data center.”
In the last 18 months, multiple data center proposals have fallen through in Germany: Stack Infrastructure canceled a $3 billion facility in Hesse, and state-owned Komm.ONE withdrew from a project in Baden-Württemberg. Though precisely what causes a data center development to fold is rarely clear, Komm.ONE pointed directly to the burdens of the Energy Efficiency Act.
Graichen claims that the industry’s objections are groundless. He says the availability of a heat offtake should become a default criterion for any developer searching for a new site. “Stop complaining,” he says.
When an offtake is available, recycling heat produced by a data center is straightforward. “There is no technical reason why a data center cannot use its waste heat. The technologies and concepts are well known,” says John Booth, managing director at IT consultancy Carbon3IT, who helped to devise EU-wide energy efficiency targets for data centers. “There is absolutely no reason except the will of the organization to do it.”
Nevertheless, under the amended Energy Efficiency Act, data center developers are required only to assess whether recycling heat is economically and technically feasible. If not, they are exempt. “With practical rules for data centers, we are creating the conditions for digital sovereignty and economic growth,” wrote Katherina Reiche, federal minister for economic affairs and energy, when the cabinet approved the change.
The amendment may unlock pent-up demand among data center developers to build in Germany, whose geographic centrality makes it easy to route data efficiently into Western and Eastern Europe. “It lessens the risk of people not seeing the German market as attractive,” says Smitten.
But in a roundabout way, it could also undermine the aim to spark a building frenzy, inviting the type of climate-focused activism that has led to permitting freezes and data center moratoria in the US. Already, in February, the city council of a small German town voted to block the construction of a $2.5 billion data center development, partly over climate concerns.
As policymakers contend with conflicting ambitions to improve domestic AI capabilities and meet climate objectives, some say the swelling public unease about that trade-off will complicate things yet further in Europe. In the last year, the attitude toward data centers “has switched completely,” claims Graichen. “First and foremost in the US, but the same will happen in Europe.”