6 regulatory obligations data centers need to consider

1. Regulation around energy consumption

There have been several energy management regulatory changes related to the rise of carbon neutrality and zero emission goals. For instance, the European Commission has amended energy statistics regulations to include energy data reporting requirements for data centers.

Some regulations require data centers to change their operating model. Regulators are encouraging data centers to look into the sources of their energy, energy use efficiency, and conservation. In many countries, data centers have to be able to run on renewable energy. For instance, the EU Renewable Energy Directive was amended to promote the use of energy from renewable sources. This will help the EU meet its 55% emissions reduction objective. In China, the design of new data centers must factor in energy management regulations to comply with the “green energy” policies and standards. This is set out in the Three Year Plan on New Data Centers Development (2021–2023). New data centers must meet the 4A level under the Data Center Low-Carbon Rating.

2. Regulation restricting GHG emissions

Data center operations generate considerable amounts of GHGs. The server operation and cooling processes are particularly bad. This is both direct (e.g., emissions from equipment and power generators onsite) and indirect emissions (e.g., emissions from electricity suppliers). Regulatory changes mean that these emissions must now be reported under country-specific or sustainability/climate disclosure obligations (e.g., national emission trading schemes, EU CSRD, US GHGRP).

Several regions have also banned or started to phase out certain greenhouse gases. Hydrofluorocarbons (HFCs), for example, are commonly used as refrigerants for cooling systems. They have now been banned under the Kigali Amendment to the Montreal Protocol. Many countries have therefore introduced regulatory changes to prohibit the production, consumption and release of HFCs. Data centers using refrigerants containing HFCs must find alternative products.

3. Regulation on electric and electronic waste

Data centers are one of the largest e-waste generators—and regulatory changes have been introduced to address this. Data centers typically generate waste such as racks, computing equipment, monitors, circuits, and other electrical components. They also frequently need to upgrade, replace or maintain this equipment to keep up with technological demands and standards. There is growing regulation affecting data centers on disposal and recycling of e-waste to avoid any toxic substances being released into the environment.

4. Regulation on water consumption

Water consumption is also the subject of regulatory changes. Data center operations rely on cooling systems, which are water-intensive processes. Data center developers, owners and operators must consider regulations to prevent water stress and pollution. For instance, in January 2023, legislators in the U.S. state of Virginia introduced a new bill about the siting of data centers. New data centers are likely to be subject to site assessment to examine their effect on the environment, including water usage. Data center developers and owners have to develop strategies to limit their adverse impact on the environment as part of their design and development plan.

Many data center developers and owners have already used climate-conscious approaches to build water stewardship programs. This allows them to monitor water consumption and reduce water usage in cooling processes. However, there is no single one-size-fits-all solution. Different designs and operating models of data centers may require different water conservation strategies to meet regulatory requirements.

5. Regulation on noise

Noise emissions may also affect new data center development. Several sites have recently had issues with community concerns about the likely health and safety impact on the surrounding neighborhood. States and municipalities may introduce regulatory changes to place stricter noise emission limits on data centers in areas close to residential districts.

High noise levels are an even bigger issue for employees within data centers. The equipment onsite usually generates sufficient noise to have a negative impact on hearing, especially for workers working long hours. Data centers need to understand the safe noise limits and comply with standards. For example, U.S. OSHA imposes a permissible exposure limit (PEL) of 90dB(A) for workers working for 8 hour per day. A compliant data center therefore needs to provide adequate equipment and preventative measures against noise emissions. This might include limiting working hours.

6. Regulation on electrical safety

High-voltage panels and circuits and arc flash are common hazards at data centers. There is a considerable amount of electrical and electronic equipment and power generators and storage. These hazards could cause problems like burns, flying objects, and fire. Regulatory changes are therefore designed to ensure that data centers eliminate, or at least minimize, the hazards. They include specific work procedures so that workers avoid working in close proximity to electrical hazard areas, and placing warning signs to alert workers. Data center owners and operators should check the relevant health and safety regulatory agencies’ guidelines or industry best practices, such as the National Fire Prevention Standard 70 and 70E. This will allow them to manage electrical hazards appropriately.