Germany plans to double its data centre capacity and quadruple its artificial intelligence computing power by 2030. The government aims to reduce reliance on the United States for AI access while stabilising the economy. These ambitions now clash with the country’s climate targets.
EU nations have pledged to cut greenhouse gas emissions by 55 per cent by the end of the decade. Policies designed to meet this goal are currently obstructing efforts to trigger a construction boom for data centres.
The heat exchange problem
The former administration passed the Energy Efficiency Act in 2023. The rule required new facilities to recycle waste heat from computer equipment, ideally feeding it into nearby municipal heating systems. Patrick Graichen, who served as a senior official at the Ministry for Economic Affairs and Energy before resigning over cronyism allegations, called it a no-brainer.
“We need clean heat, and data centers are a source of clean heat,” Graichen told WIRED.
In June, a month before the rules were due to take effect, the federal government walked them back. Firms complained that the requirements made building in the country almost impossible. The German Data Center Association described an early version of the bill as a “data center prevention act.”
Under the amended legislation, which will go to parliament for ratification soon, operators must only assess the possibility of reusing waste heat. They are no longer obligated to do it.
Graichen and others accuse the government of sacrificing climate targets to ride the AI wave. Countries across Europe face similar pressure to capitalise on the energy-intensive sector and limit dependence on the US, all while protecting the climate.
The Ministry for Economic Affairs and Energy did not respond to a request for comment.
Why developers objected
The main objection from data centre developers was the risk of being forced to reuse heat when no buyer existed. There might be no municipal heating system or local industry, such as greenhouse agriculture, to take the energy. Barbara Smitten, associate director for critical systems at consulting firm Cundall, noted that some compliance requirements were outside their control.
“It felt that [the burden] was all on the data center,” Smitten said.
In the last 18 months, multiple proposals have failed in Germany. Stack Infrastructure cancelled a $3 billion facility in Hesse. State-owned Komm.ONE withdrew from a project in Baden-Württemberg. Komm.ONE cited the burdens of the Energy Efficiency Act as a direct cause.
Graichen claims the industry’s objections are groundless. He argues that checking for a heat offtake should be a default criterion for any developer looking for a new site.
“Stop complaining,” he said.
When a buyer exists, recycling heat is straightforward. John Booth, managing director at IT consultancy Carbon3IT, helped devise EU-wide energy efficiency targets for data centres. He stated there is no technical reason why a facility cannot use its waste heat.
“The technologies and concepts are well known,” Booth said. “There is absolutely no reason except the will of the organization to do it.”
A compromise with consequences
Under the amended act, developers must only assess if recycling heat is economically and technically feasible. If not, they are exempt. Katherina Reiche, federal minister for economic affairs and energy, wrote that practical rules create conditions for digital sovereignty and economic growth when the cabinet approved the change.
The amendment may release pent-up demand among developers to build in Germany. Its geographic centrality makes it easy to route data efficiently into Western and Eastern Europe. Smitten said this lessens the risk of people viewing the German market as unattractive.
However, it could also undermine the aim to spark a building frenzy. It invites climate-focused activism that has led to permitting freezes and moratoria in the US. In February, the city council of a small German town voted to block a $2.5 billion development, partly over climate concerns.
As policymakers struggle with conflicting ambitions to improve domestic AI capabilities and meet climate objectives, some say public unease about the trade-off will complicate matters further. The attitude toward data centres has switched completely in the last year, Graichen claims. He believes this shift began in the US but will happen in Europe too.
What it means
Germany is choosing speed over strict climate rules for now. Developers can proceed without guaranteeing they will sell their waste heat, provided they prove it is not feasible. This lowers the barrier to entry for new projects. But it risks normalising a model where energy-intensive computing is prioritised over local heating needs. If public anger grows, local councils may block sites again, regardless of the national government’s stance.
