In the last few years, the rapid expansion of AI tools and cloud technologies has fundamentally reshaped the digital space and every day life, while also introducing new risks, particularly in terms of rising energy demand and environmental pressure. At the centre of this shift are data centres, which have become essential infrastructure for modern digital systems – but are also increasingly resource-intensive. This raises a key regulatory question: how are these developments being governed to ensure they remain aligned with energy efficiency and environmental protection objectives?
Rapid Expansion of Data Centres and Growing Demand for Energy
Data centre could be defined as a facility that houses and runs large computer systems. A data center typically contains multiple computer servers, data storage devices, and network equipment that can provide IT infrastructure service for organizations to store, manage, process, and transmit large amounts of data.
Data centres are highly energy-intensive because they run thousands of power-hungry servers and AI processors continuously while also requiring massive cooling systems to prevent overheating and maintain stable performance. In 2023, it is estimated that the energy consumption of data centers accounted for approximately 4.4% of U.S. annual electricity consumption that year. Energy consumption of data centers grows annualy, and in 2024 it is estimated that data centres were responsible for about 1.5% of the world’s total yearly electricity consumption. This demand for energy grew by 17% in 2025.
Data centres may have considerable environmental impacts due to their intensive electricity consumption, significant water demand for cooling systems, associated greenhouse gas emissions where energy is sourced from fossil fuels, and increasing pressure on local infrastructure and natural resources.
On the other hand, the relationship between data centres and the energy transition is becoming increasingly important. As electricity demand from digital infrastructure continues to grow, ensuring that data centres are powered by renewable energy, supported by energy-efficient technologies, and better integrated into electricity systems is emerging as a key challenge.
This development requires clear regulatory standards to ensure that data centres evolve in line with net zero objectives, are effectively integrated into the broader energy transition, and minimize their negative environmental impact.
The Increasing Regulation of Data Centre Sustainability in EU
In several European Union Member States, serious debates are already taking place regarding where and under what conditions new data centres may be built, particularly in light of growing pressure on electricity systems and local resources. As highlighted by POLITICO Europe, the development of data centres is becoming one of the key infrastructure and energy challenges facing the European Union. For this reason, the EU regulates data centres through a combination of existing legislation, soft-law instruments, and new policy initiatives aimed at improving energy efficiency and environmental sustainability in line with the Green Deal objectives.
The Energy Efficiency Directive requires Member States to oblige owners and operators of data centres with an installed IT power demand of at least 500 kW to annually disclose key information on their energy performance, including data on energy use, efficiency, cooling systems, and environmental impact, which is then collected into a publicly accessible EU-level database in aggregated form. In addition, Member States are encouraged to promote the adoption of best practices from the EU Code of Conduct on Data Centre Energy Efficiency for facilities above 1 MW, while the European Commission is tasked with assessing the collected data and, where appropriate, proposing further binding measures such as minimum energy performance standards and pathways toward a net-zero emissions data centre sector.
Key binding instruments also include the Ecodesign Regulation for servers and data storage products, which sets energy efficiency requirements for hardware. These measures are complemented by the EU Taxonomy Regulation, which guides sustainable investment by defining environmentally sustainable economic activities, including criteria relevant to data centres. In addition to binding rules, the EU uses non-binding instruments such as the EU Code of Conduct on Data Centre Energy Efficiency and Green Public Procurement criteria, which encourage operators and public authorities to adopt best practices in energy efficiency and sustainability.
At the same time, the expansion of data centres raises questions about their potential role in the green transition. Increasingly, discussions focus on the development of “green data centres” through: the use of renewable energy sources, corporate Power Purchase Agreements (PPAs), investments in energy efficiency, more efficient cooling systems, energy demand management, and better integration with electricity systems.
Within European regulatory and expert debates, an increasingly important question is whether data centres can become part of the solution to the energy transition, rather than an additional burden on electricity systems.
What Does This Mean for Serbia?
Serbia is already developing digital infrastructure capacities, including existing data centres and the continued growth of cloud and digital services. A particularly important example are the State Data Centres in Belgrade and Kragujevac, alongside many announced data centre projects, such is the one that will be constructed in Pančevo. At the same time, rising demand for AI systems, cloud services, and data storage is expected to further increase the investments in data centres in the coming years.
The development of this infrastructure may present a major opportunity to strengthen technological capacities, while simultaneously raising important questions regarding:
- the availability of energy capacity,
- connection to the electricity grid,
- the development of renewable energy sources,
- management of rising electricity demand,
- water use and cooling systems,
- as well as future ESG and sustainability requirements increasingly expected by markets, investors, and the European regulatory framework.
In Serbia, data centres are not directly regulated by a specific dedicated legal framework, but are instead governed indirectly through a combination of energy, construction, electronic communications, and environmental protection legislation depending on the relevant aspect of their operation.
Given Serbia’s EU accession process and the obligations it undertakes through the Energy Community, it is reasonable to expect that European regulatory trends in energy, energy efficiency, and sustainability will increasingly shape the domestic market as well. In this sense, the question is no longer whether data centres will continue to develop, but rather how to develop them in a sustainable way and in line with long-term energy and climate goals. In the coming years, the development of data centres will increasingly become an issue of energy and environmental law. For this reason, it will be important to foster expert debate on how to align the expansion of digital infrastructure with the principles of sustainability, energy transition, and environmental protection – both in the European Union and in Serbia. The development of digital infrastructure and sustainable energy can no longer be viewed separately.