The European Union is preparing to significantly weaken proposed climate regulations for data centers, allowing companies to use cheaper carbon offsets instead of requiring local renewable energy certificates. Draft rules obtained by the Financial Times show the bloc is dropping strict requirements that would have mandated clean energy investments tied to specific time and location of energy use.

Tech giants including Amazon Web Services and Microsoft successfully lobbied for the changes, arguing that stricter standards would increase operational costs. The revised proposal permits data centers to offset fossil fuel emissions through renewable certificates from anywhere in Europe, including nuclear energy projects. This creates a situation where a German data center powered by coal can claim carbon neutrality by purchasing solar certificates from Spain.

Climate experts criticize the approach as ineffective for reducing actual emissions. Killian Daly of Energy Tag warns that such offsets may drive demand for imported gas rather than encouraging genuine renewable investments. Meanwhile, Amazon reported a 34% increase in electricity-related emissions between 2024 and 2025, despite claiming 100% renewable energy matching.

The policy shift comes as Europe aims to triple data center capacity within five to seven years while facing record heat waves. European Commission officials will discuss the draft Thursday, though it remains subject to revision. The move represents a significant victory for Big Tech in their efforts to maintain operational flexibility while meeting climate commitments.