Germany aims to double its data center fleet by 2030 and quadruple the computing power available to run AI models. The goal is to reduce dependence on the United States for AI access and boost the economy. But the plan runs into the country's climate commitments, and the European Union's target of cutting greenhouse gas emissions by 55% by the end of the decade.
A key obstacle is a 2023 law, the Energy Efficiency Act. Among other things, it required all new data centers to recycle part of the waste heat from their equipment, ideally feeding municipal heating systems. Patrick Graichen, a former senior official at the economy and energy ministry, called it an obvious choice: "We need clean heat, and data centers are a source of clean heat."
The rollback
In June, a month before the rules were due to take effect, the federal government proposed an amendment. Data center companies had argued the requirements made building almost impossible, and the German Data Center Association had described an early version of the bill as a serious obstacle. Under the amended bill, operators would no longer have to reuse waste heat, only assess whether doing so is feasible. The bill will soon go to parliament for ratification.
The practical problem is well known. Heat can only be reused if a buyer is available, such as a heating network or an industry like greenhouse agriculture. Barbara Smitten, associate director for critical systems at consultancy Cundall, said some obligations were "outside of their control", placing the burden entirely on data centers.
In the last 18 months several projects have fallen through in Germany. Stack Infrastructure dropped a $3 billion facility in Hesse, and state-owned Komm.ONE withdrew from a project in Baden-Württemberg, citing the law's burdens among its reasons.
Recovering heat is technically possible
When a buyer exists, recovering heat is straightforward. John Booth of IT consultancy Carbon3IT says there is no technical barrier: "The technologies and concepts are well known. There is absolutely no reason except the will of the organization to do it." Graichen goes further, arguing the industry's objections are groundless and that the availability of a heat buyer should become a default criterion for any new site.
Under the amendment, operators need only check whether heat recovery is economically and technically feasible, and are exempt if it is not. Economy minister Katherina Reiche defended the change as creating conditions for "digital sovereignty and economic growth".
The risk of a public backlash
The change could unlock pent-up demand, given Germany's central position for routing data into Western and Eastern Europe. But it could also fuel the kind of local opposition that has led to permit freezes and moratoria in the US. In February, a German town council already blocked a $2.5 billion data center project, partly over climate concerns.
Graichen believes public attitudes are shifting: "In the last year, the attitude toward data centers has switched completely. First and foremost in the US, but the same will happen in Europe."
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