AGORIA

What the Commission proposes

The European Commission proposes the Cloud and AI Development Act to establish a framework of measures aimed at strengthening Europe's cloud and artificial intelligence ecosystem. The initiative focuses on three pillars, which include research and innovation for greening infrastructure, industrial investments to triple EU data processing capacity, and actions to increase secure data processing capacities for cloud providers in the EU. Ultimately, the proposal seeks to address infrastructure gaps, reduce critical dependencies on non-European providers, and enhance the Union's digital sovereignty and competitiveness.

• Addresses the EU gap in cloud and AI infrastructure capacity through three distinct pillars.
• Promotes research and innovation to accelerate sustainable cloud and AI computing technologies.
• Aims to triple the EU data processing capacity over the next 5 to 7 years via industrial investments.
• Introduces measures to increase secure data processing capacities for high-critical use cases.
• Establishes common criteria for sovereign cloud computing services to reduce extraterritorial dependencies.
• Promotes open-source solutions and joint public procurement activities across the public sector.

Summary written by AI from the Commission's document.

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1. The use, reuse and promotion of open source in public administrations, will accelerate innovation allowing EU companies to compete in terms of performance, energy efficiency, and novel offers (PM20). All measures under this initiative are conceived to be in line with the EU’s international trade obligations. The initiative looks to incentivise local investment and aggregate demand by anchor customers, ensuring that competitive advantage is grounded in trust and operational excellence rather than on market power. Finally, the initiative seeks to enable European providers to gain market share at EU and international level, by equipping them with the necessary mechanisms to enhance the scale and scope of their service offering. In the mid to long term, the levers proposed in this initiative (e.g.

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2. Diverging public procurement practices for cloud and AI computing services and diverging sovereignty criteria may prevent providers from fully benefitting of the internal market. If EU intervention takes the form of a legislative proposal, it can be based on Article 114 TFEU. Article 173(3) TFEU is the basis for enhancing the EU’s competitiveness and innovation capacity. It enables measures to accelerate industry’s adaptation to structural changes; encourage an environment favourable to initiatives and to the development of undertakings throughout the EU, particularly small and medium-sized undertakings and favourable to cooperation between undertakings; and foster better exploitation of the industrial potential of policies of innovation, research and technological development.

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3. fast-permitting, national facilitator, funding mechanisms, joint procurement, federation) to solve very clear challenges of today (e.g. sustainability, skills, leverage of open source, aggregation of demand, sovereignty) will allow European providers to expand their market presence, in the EU and beyond. Capacity to innovate CADA goes directly at the heart of improving the capacity to innovate (PM8, PM9) and the improvement of skills (PM23). The funding mechanisms (PM8, PM9), complemented with the cloud and AI adoption scheme targeted towards SMEs and the skills certification (PM23) will boost the capacity to innovate at product, service and process level. The spillover effects of research funds, where a myriad of EU stakeholders can participate (e.g.

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What the Commission proposes

The European Commission is preparing an initiative to establish common Union minimum performance standards for data centres located in its territory. Building on existing reporting and rating schemes under the Energy Efficiency Directive, the proposed regulation aims to phase out unsustainable practices and technologies in new or retrofitted facilities. The initiative seeks to address rising energy and water consumption, limited waste heat reuse, and regulatory fragmentation across Member States. An impact assessment is planned for late 2026, with a legislative proposal anticipated in the second quarter of 2027.

• Establish common EU minimum performance standards for data centres regarding energy efficiency, water use, waste-heat reuse, and grid services.
• Form the third step in the EU sustainability framework for data centres, following the 2024 reporting scheme and the 2026 rating scheme.
• Prevent divergent national approaches and reduce regulatory fragmentation across Member States.
• Improve sector competitiveness and reduce operational costs by cutting energy and water waste.
• Support energy system integration by aligning data centre operations with power grid and heat network needs.
• Prepare an impact assessment in Q4 2026 to support the drafting of the legislative proposal for Q2 2027.

What is asked: The consultation aims to collect in-depth evidence, information, data and feedback from stakeholders on the need for and feasibility of minimum performance standards for data centres in the EU, the most appropriate way to establish them, which indicators should have standards, and what thresholds should be set.

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1. Problem the initiative aims to tackle As highlighted by the Draghi report and the AI Continent Action Plan, expanding data centre capacity in the EU is essential for fostering AI innovation, accelerating digitalisation, boosting EU competitiveness across industries and supporting a mature data economy. To ensure this, several sustainability challenges need to be tackled: 1. rising energy and water consumption 2. limited waste heat reuse and energy system integration 3. the lack of a framework guiding data centres’ sustainability efforts 4. the lack of regulatory convergence between countries 5. competitiveness and affordability concerns 6. barriers to innovation and uptake of clean technologies Basis for EU action (legal basis and subsidiarity check) Legal basis The legal basis for this initiative is Article 194(2) of the Treaty on the Functioning of the European Union.

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2. This sector touches upon two important EU objectives, namely the Union’s technological sovereignty and the Union’s energy resilience and security. Expanding computing capacities and increasing the number of data centres on the Union’s territory is essential, but it also poses challenges, not only in terms of increasing energy consumption but also for electricity grids, carbon emissions and environmental resources such as water. In response, the EU’s digital strategy emphasises the need for highly energy-efficient and sustainable data centres. As highlighted by the Draghi report on EU competitiveness, using energy more efficiently makes it possible to cut costs, which is vital for the competitiveness of European industries. The Energy Efficiency Directive (EU) 2023/1791 (EED) requires to promote energy efficiency and sustainability in data centres.

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3. CALL FOR EVIDENCE FOR AN INITIATIVE WITH AN IMPACT ASSESSMENT TITLE OF THE INITIATIVE Data centres in the EU - Minimum performance standards LEAD DG (RESPONSIBLE UNIT) Directorate-General for Energy - Unit B2 on Energy efficiency (Policy and Financing) LIKELY TYPE OF INITIATIVE Proposal for a Regulation of the European Parliament and of the Council INDICATIVE TIMETABLE Q2 2027 ADDITIONAL INFORMATION Energy performance of data centres This document is for information purposes only. It does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content. All elements of the initiative described, including its timing, are subject to change. A. Political context, problem definition and subsidiarity check Political context The information and communication technology (ICT) sector is one of the fastest-growing sectors in Europe and globally.

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What the Commission proposes

The European Commission proposes a revision of EU public procurement rules through a new regulation that repeals the existing 2014 directives on public procurement, utilities, and concessions. The initiative aims to modernize and simplify rules, reduce administrative burdens, and enable preferences for European products in strategic sectors to secure supply chains and add EU value. It also amends multiple sector-specific regulations and directives containing procurement provisions to improve coherence and transparency. Furthermore, the proposal addresses high administrative burdens and legal uncertainty identified in previous evaluations regarding public buyers and businesses.

• Revises and replaces Directives 2014/23/EU, 2014/24/EU, and 2014/25/EU with a single Public Procurement Act regulation.
• Enables preference for European products in strategic sectors to ensure security of supply and EU added value.
• Aims to modernize and simplify rules, specifically considering EU start-ups and innovators.
• Amends various sector-specific regulations and directives that contain public procurement provisions.
• Addresses administrative burdens and legal uncertainty that currently affect public buyers and businesses, including SMEs.

Summary written by AI from the Commission's document.

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1. industries and jobs • The need for certification and traceability tools to ensure the credibility of Made in Europe requirements • The importance of considering the impact of Made in Europe criteria on small and medium-sized enterprises (SMEs) and ensuring that they do not create unnecessary barriers to entry or disproportionately affect certain industries or sectors. Some respondents also suggested that Made in Europe criteria should be applied in a way that takes into account the entire life cycle of a product or service, including its production, use, and disposal, and that they should be linked to EU environmental and

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2. • Strategic sectors, without specifying particular ones • Personal protective equipment and healthcare • Steel, energy infrastructure, and construction, where demand certainty can accelerate decarbonisation and the circular economy • Key technologies such as AI, cloud, quantum, semiconductors, digital infrastructure and platforms, cybersecurity, defence, and space These respondents generally emphasized the importance of focusing on sectors that are critical to the EU's economic and technological development, as well as those that are essential for ensuring the EU's security and resilience. Overall, the comments suggest that the scope of Made in Europe provisions should be targeted and strategic, with a focus on promoting the EU's competitive advantages and protecting its critical interests.

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3. EN 24 EN procurements should be assessed based on an appreciation of all relevant interests taken as a whole, in particular economic, geopolitical and societal interests of the Union, its Member States and its citizens. The relevance of such Union interest is illustrated by sectors such as railways and shipbuilding which, as manufacturing sectors of a dual-use nature, rely on infrastructure, mobile assets and information and communication technology (ICT) and traffic management systems that must be resilient and are critical to military mobility, security, and the Union's strategic autonomy objectives. Their strategic importance has been underlined by recent Union initiatives including the EU Economic Security Strategy, the EU High-Speed Rail Plan, and the EU Maritime Industrial Strategy.

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What the Commission proposes

The European Commission is conducting a review of the scope, functioning, and efficiency of Regulation (EU) 2022/1031 on the International Procurement Instrument (IPI). The review evaluates the implementation of the regulation, including investigation processes, consultations, thresholds, exceptions, and the first adopted IPI measure regarding medical devices from China. It aims to assess the instrument's effectiveness in tackling procurement barriers in non-EU countries and ensuring a level playing field for EU operators. The findings will be presented in a report to the European Parliament and the Council by August 2027.

• Review of the scope, functioning, and efficiency of the IPI Regulation pursuant to Article 14.
• Assessment of investigation procedures, third-country consultations, thresholds, and types of measures.
• Evaluation of the application and implementation of the first IPI measure concerning Chinese medical devices.
• Analysis of the efficiency of online complaint tools and rules for determining origin.
• Execution of a 12-week online public consultation through the Have your say portal.
• Publication of a factual summary of consultation results and an implementation report to the European Parliament and the Council.

What is asked: Respondents are asked to provide views and evidence on the implementation, scope, functioning, and efficiency of the IPI Regulation in tackling non-EU procurement barriers, achieving market openness, and ensuring a level playing field, as well as the application of specific measures adopted under the Regulation.

Summary written by AI from the Commission's document.

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1. 4 We are consulting stakeholders to assess the implementation of the IPI Regulation in terms of: - the scope, functioning and efficiency of the Regulation in tackling non-EU countries procurement barriers, achieving openness of non-EU countries public procurement markets and ensuring a level playing field for EU businesses, goods, services and works; - implementation of specific measures adopted under the IPI Regulation. Target audience The target audience is composed of, in particular, interested parties affected by measures or practices in non-EU counties (e.g. businesses, business associations and cross-industry organisations), EU contracting authorities and EU contracting entities.

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2. CALL FOR EVIDENCE FOR AN INITIATIVE This document aims to inform the public and stakeholders about the Commission’s work, so they can provide feedback and participate effectively in consultation activities. We ask these groups to provide views on the Commission’s understanding of the problem and possible solutions, and to give us any relevant information they may have. TITLE OF THE INITIATIVE International Procurement Instrument review LEAD DG - RESPONSIBLE UNIT Directorate-General for Trade & Economic Security - Unit B.3, Digital Trade, Intellectual Property and Public Procurement

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3. B. What does the initiative aim to achieve and how The IPI is designed to promote market openness and ensure a level playing field for EU businesses, goods, services and works in third-country public procurement markets. The IPI Regulation requires continuous monitoring to: (i) ensure that the instrument remains coherent and efficient in tackling evolving public procurement market barriers in non-EU countries; (ii) provide the EU adequate leverage and the appropriate tools to create a level playing field for EU businesses, goods, services and works; and (iii) ensure a smooth application of measures adopted under the IPI. The Commission report will review the scope, functioning and efficiency of the IPI Regulation based on its implementation, in particular with regard to: (i) the scope of application of IPI; (ii) the rules of determination of origin;

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What the Commission proposes

The European Commission has published an impact assessment and legislative review concerning Directive 2003/87/EC and Decision (EU) 2015/1814 on the EU Emissions Trading System (EU ETS) and the Market Stability Reserve. This initiative serves as the first part of a broad post-2030 framework package aimed at driving competitiveness and cost-effective decarbonisation. It evaluates how stationary installations, aviation, and maritime sectors can deliver necessary emission reductions while ensuring carbon leakage protection and orderly market functioning. The review addresses the shrinking supply of allowances and adapts the system to align with intermediate 2040 targets and 2050 climate neutrality goals.

• Reviews the EU ETS and the Market Stability Reserve to prepare for post-2030 climate targets.
• Assesses pathways toward the 2050 climate neutrality goal and the intermediate 2040 target.
• Focuses on industrial sectors, maritime transport, and aviation to ensure cost-effective decarbonisation.
• Examines carbon leakage protection, free allocation benchmarks, and the funding transition through EU revenues.
• Analyzes market functioning and allowance supply adjustments to prevent trading frictions and price volatility.
• Accompanies related proposals simplifying monitoring, reporting, and verification regulations.

Summary written by AI from the Commission's document.

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1. directing EU- funding to the most cost-effective projects (typically low-risk, mature ones, located in the optimal locations of the EU); and, supporting industry decarbonisation across all Member States to ensure that all MS decarbonise their industrial base, benefit from spillover effects and, in the long-term no opportunities are missed (countries/regions that are not successful in the EU-level competition might be hampered by lack of administrative capacity/lack of innovation ecosystem rather than structural factors of their industry/economy). . The Clean Industrial Deal highlights a fair geographical distribution of support needs to be ensured. Several options to achieve this balance: Table 14:

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2. EN 10 EN contracts for difference, as part of a broader objective to mobilise EUR 100 billion for industrial decarbonisation. This proposal also extends the Innovation Fund and the Modernisation Fund. Endowed with 200 million allowances, the Innovation Fund will support innovative industrial technologies for industry and clean-tech manufacturing. The Modernisation Fund will channel the revenues resulting from the auctioning of 2,5% of the Art. 9 cap to lower-income Member States to modernise energy infrastructure, expand renewables, strengthen grids, improve energy efficiency, and support technologies such as carbon capture and storage (CCS). 2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY • Legal basis Articles 191, 192 and 193 of the Treaty on the Functioning of the European Union empower the EU to act to preserve, protect and improve the quality of the environment;

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3. Over the coming decade and to achieve climate neutrality by 2050, industry has to go through a significant transformation to modernise, decarbonise and switch to cleaner and more energy-efficient technologies, for example by electrifying, using hydrogen from renewable sources, deploying carbon capture, utilisation and storage (CCUS), and generating carbon removals. At the same time, EU industry needs to remain competitive in a global market and ensure quality jobs, in line with the objectives of the Clean Industrial Deal. This transformation requires stepping up investments substantially. This includes a skilled workforce capable of deploying the technologies needed in relevant ETS sectors. For this, a predictable ETS price signal and targeted use of its revenues are essential. The EU ETS is a key financing mechanism for the green transition.

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