The Spanish Ministry for Ecologic Transition and Demographic Challenge (“MITECO”) has launched a public consultation on a Draft Royal Decree (“Draft Royal Decree”) that would impose strict energy efficiency and sustainability requirements on data centers in Spain.  The proposed requirements of the Draft Royal Decree are broader and stricter than the requirements on data centers set out in the EU’s Directive (EU) 2023/1791 (the “Energy Efficiency Directive” or “EED”) that the Draft Royal Decree aims to transpose.  Among other things, the Draft Royal Decree imposes requirements to report on the socio-economic impact of data centers; and to comply with the European Code of Conduct on Data Centre Energy Efficiency (“EU CoC”), and with industry best practices.  The Draft Royal Decree is subject to an ongoing public consultation and interested parties may submit their comments until September 15, 2025.

In this blog post we outline the requirements of the Draft Royal Decree that are stricter than those of the EED.

The EED and the European Commission’s Delegated Regulation on Data Centers

The Draft Royal Decree is intended to transpose the EED’s sustainability requirements on data centers.  The EED imposes disclosure and waste heat reuse (“WHR”) requirements on operators and owners of data centers, and also requires Member States to encourage data centers to take into account the best practices of the EU CoC.

  • Reporting Requirements:  Article 12 of the EED requires operators and owners of data centers with a power demand of the installed information technology (“IT”) of at least 500kW to make specific sustainability information publicly available, except for information subject to EU and national laws protecting trade and business secrets and confidentiality. Article 12 of the EED also requires the European Commission to establish a European database on data centers (“EU Database”) that includes the information reported by the operators and owners of the data centers.  The EED also empowers the Commission to adopt a delegated regulation that sets out a common scheme for rating the sustainability of data centers, establishes the definition of data center sustainability indicators, and lists the key performance indicators (“KPIs”) and the methodology to measure them. On that basis, the Commission adopted Delegated Regulation (EU) 2024/1364 (“Delegated Regulation”) that sets out, in its Annexes I and II, the KPIs that must be reported to the EU Database.  Member States can decide whether operators and owners of data centers should report the KPIs directly to the EU Database or via the national competent authority.  In July 2025, the European Commission published its First Technical Report on an “Assessment of the energy performance and sustainability of data centres in EU” providing an overview of how and what operators of data across the EU reported in 2024.
  • WHR Requirements: Article 26 of the EED requires data centers with a total rated energy input exceeding 1 MW to utilize the waste heat or other waste heat recovery applications unless they can show that this is not technically or economically feasible on the basis of a cost-benefit analysis (“CBA”). 
  • EU CoC: Article 12 of the EED also mandates Member States to encourage owners and operators of data centers in their territory with a power demand of installed IT equal to or greater than 1 MW to take into account the best practices set out in the most recent version of the EU CoC.

For more information on the EED requirements on data centers, please download Covington’s comprehensive guide on the EED here.

The Spanish Draft Royal Decree

The Draft Royal Decree imposes obligations on reporting, WHR and compliance with the EU CoC that clearly go beyond those of the EED.

Reporting Obligations

In line with the Commission’s Delegated Regulation, by May 15 of each year, operators of data centers witha power demand of the IT equipment of at least 500kW must report to the MITECO the KPIs set out in Annexes I and II to the Delegated Regulation.  The information must be reported to the Spanish MITECO rather than directly to the EU Database.  In addition to the EED’s and Delegated Regulation’s reporting requirements, the Draft Royal Decree would require the operators to provide the MITECO with:

  • a strategy to reduce total energy use, electricity supply needs, water consumption (including potable water), and increase waste heat reuse, along with a report on how this strategy was applied in previous years.
  • information on direct and indirect employment, including the type of employment generated.
  • an analysis of the impact of the data on the territory where it is located.  Among other things, this impact analysis would have to include the localization of potential clients, as well as the origin and destination of data to be stored and processed, broken down per country.

The MITECO would be required to make the reported information publicly available on its website and to inform the competent authorities of the Autonomous Community where the data center is located.

WHR and CBA Requirements

Similarly to the EED, the Draft Royal Decree would require newly built and substantially refurbished data centers with a total rated energy input exceeding 1 MW to reuse waste heat to provide cooling services or other heat applications.  As in the EED, data centers must determine whether this is technically and economically feasible on the basis of a CBA that must comply with the specifications of Annex I to the Draft Royal Decree.

Entities that intend to build or substantially refurbish a data center with a total rated energy input exceeding 1 MW would be required to perform a CBA when they plan the construction or renovation of a data center.  In addition, owners of data centers with a total rated energy input exceeding 1 MW that are not subject to substantial refurbishment would be required to carry out a CBA within three years from the entry into force of the Royal Decree.  All CBAs would have to be updated every five years.

The Draft Royal Decree would also require the publication of the available heat supply quantities and heat parameters, the annual number of planned operating hours and the geographical location of the facilities that are specified in the CBA.

Applications for construction or refurbishment permits and for permits to connect the data center facilities to the electric energy transport and distribution network would have to include a favorable opinion of the relevant Autonomous Community.  This application would need to include the proposed plan on WHR, including the underlying CBA. 

If the Autonomous Community ratifies the positive result of the CBA and the municipality does not oppose it, the owners of the data center would have to implement the WHR system.  Such implementation may voluntarily take place within three years, in which case it may benefit from different support mechanisms, or obligatorily within two years after the end of the three-year voluntary period.

Compliance with the EU CoC and “Industry Best Practices”

The Draft Royal Decree would require entities that intend to build data centers with a total rated energy input exceeding 1 MW and owners and operators of such data centers to report to the MITECO how they take into account the best practices included in the latest version of the EU CoC.

Moreover, entities that intend to build data centers with a power greater than 100 MW and owners and operators of such data centers would be required to demonstrate compliance with “industry best practices” (“mejores prácticas del sector”).  This means that they would be required to demonstrate that their data center is within the top 15% of facilities in terms of performance for particularly relevant indicators, including, among others, the Power Usage Effectiveness (“PUE”), Water Usage Effectiveness (“WUE”), Energy Reuse Factor (“ERF”), and the Renewable Energy Factor (“REF”).

Next Steps

The public consultation on the Draft Royal Decree will be open for inputs from stakeholders until September 15, 2025.  Following that date, the MITECO will review the comments received and decide whether to amend the Royal Decree or proceed with the final adoption.  The final adoption of the Royal Decree does not require approval from the Spanish Parliament.  The Draft Royal Decree also empowers the MITECO to adopt implementing rules specifying the Royal Decree’s requirements.

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Covington advises clients on the EED and helps owners and operators of data centers and providers of data center services navigate the national transposition of the EED’s requirements in the different EU Member States.  Please feel free to reach out to the members of our team for further insights or support.

Tags: Data Centers Sustainability, EED, Energy Efficiency Directive, EU Coc, Industry Best Practices, MITECO, Public Consultation, September 15 Deadline, Spanish Draft Royal Decree, Sustainability Reporting, waste heat reuse
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Photo of Max Jerman Max Jerman

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