France is at a crossroads. The convergence of booming demand, complex regulation and new legal frameworks creates risks — but also unprecedented opportunities for investors who plan with foresight and structure their projects to anticipate these reforms.
France’s Dilemma: Urgency Meets Complexity
France faces a paradox common across Europe. Demand for digital infrastructure is accelerating at an unprecedented pace, driven by cloud adoption, artificial intelligence and the need for resilient, sovereign storage capacity. Yet despite recent evolutions, the regulatory environment remains challenging for the development of large-scale data centers.
For operators and investors, France remains an attractive market — with a favorable energy mix (notably nuclear and renewables), competitive connectivity and a skilled workforce. But navigating legal, environmental, and permitting frameworks is essential. Delays in approvals or ambiguities in regulatory interpretation can materially affect project feasibility and investor confidence.
Where Do Projects Get Stuck?
Regulatory classification: Unlike traditional industrial facilities, data centers were not previously recognized as a distinct ICPE (Installations Classées pour la Protection de l’Environnement) category under French law. Instead, their auxiliary systems — such as diesel backup generators, cooling equipment, and fuel storage tanks — typically triggered ICPE classification (Arts. L.511-1 et seq., Environmental Code (Code de l’environnement)). This indirect approach subjected projects to extensive environmental procedures, not for their core operations, but for supporting subsystems.
Under the previous framework, data centers were therefore only indirectly regulated through these auxiliary installations. However, Article L.236-1 of the French Energy Code now expressly defines and regulates data centers as such. This new provision introduces sector-specific obligations regarding energy efficiency, water consumption and environmental reporting. At the same time, ICPE rules continue to apply to ancillary technical systems, resulting in a layered regulatory framework: data centers are directly regulated under the Energy Code, while their auxiliary equipment remains subject to the Environmental Code.
Urban and environmental permitting: Data centers typically require multiple authorizations including building permits (Urban Planning Code (Code de l’urbanisme), Art. L.421-1 et seq.), ICPE authorizations, water law permits, and environmental impact assessments. The environmental authorization (“autorisation environnementale unique” (AEU) – Urban Planning Code (Code de l’urbanisme), Art. L.181-1 et seq.) was designed to streamline approvals, but in practice procedures often remain sequential and time consuming.
Grid connection: Connection is governed by the Energy Code (Code de l’Energie). Historically, capacity was allocated on a “first come, first served” basis by RTE or Enedis, a system that encouraged speculative reservations and limited visibility on available megawatts. Several projects in Île-de-France, for example, have faced significant delays awaiting grid capacity.
From 1 August 2025, the framework for connection capacity will change: capacity allocation will be governed by Articles L.342-22 to L.342-24 of the French Energy Code (Code de l’Energie), as well as CRE’s 18 December 2024 deliberation and the Ministerial Order of 14 November 2024. Despite industry lobbying for exemption, the mechanism applies to all relevant installations, including data centers. It empowers RTE to reduce reserved connection capacity if actual usage falls below the subscribed level, following the rules set by the CRE. The mechanism is similar in effect to a “use-it-or-lose-it” (UIOLI) approach.
CRE’s Deliberation n° 2024-229 (18 December 2024) sets out the modalities:
- New installations:
– Immediate connection at full capacity, subject to reassessment after five years; or
– Progressive ramp-up over up to 10 years, with at least three adjustment points. Capacity may be revised downward if usage lags behind forecasts. - Existing installations: Capacity will be recalculated based on the maximum subscribed power drawn over the past five years, plus a 25 percent buffer, ensuring reductions reflect actual consumption.
- Indemnification: Available only for connection agreements signed before 1 August 2025, capped at 60 percent of residual costs. After that date, no compensation applies. These rules override conflicting contractual terms. RTE must submit updated connection procedures to CRE by 1 June 2025, with all grid operators required to apply them from 1 August 2025.
We also note that CRE’s deliberation n° 2025-120 of 7 May 2025 introduces a dedicated fast-track procedure for connecting very large electricity consumers — in particular, hyperscale data centers — to the high-voltage transmission grid (HTB3, 400 kV). This streamlined process applies exclusively to projects located on sites designated as favorable by the State, subject to feasibility confirmation by RTE.
Key features of the fast-track procedure include:
- Accelerated timelines: Connections may be completed within three to four years, significantly shorter than under the standard regime.
- Pre-reservation of capacity: RTE may reserve capacity in advance for State-identified sites, providing developers with early visibility and avoiding speculative requests.
- Financial commitments: Developers must provide a 10 percent bank guarantee upon engagement, pay 30 percent of the estimated connection costs at contract signing, and 60 percent upon execution of the final convention de raccordement.
- Capacity availability: A new component reflecting RTE’s cost of making firm capacity available before network reinforcements. The precise calculation will be detailed in forthcoming contractual models.
- Permit requirement: The building permit must be obtained within 16 months of engagement signing; otherwise, reserved capacity is released.
It is important to note that this fast-track regime is not a general reform of connection procedures but a targeted measure for projects with exceptional power demand. Standard HTB2 and HTB1 projects will continue to follow the ordinary framework. Nevertheless, for eligible projects, this procedure could materially reduce timelines and enhance planning certainty.
Heat collection and reuse: In accordance with Directive (EU) 2023/1791 on energy efficiency (Article 26(6)), Member States must ensure that data centers with a total rated power of 1 MW or more utilize their waste heat through recovery applications — unless they can demonstrate that doing so is technically or economically unfeasible. This obligation has been transposed into French law by Article L. 236-2 of the French Energy Code, introduced by Law No. 2025-391 of 30 April 2025, which requires such data centers — as defined by Article L. 236-1[1] — to valorize the waste heat they generate. The specific conditions, modalities, and exemptions — including those referred to in the Directive’s Article 26(6) — are to be defined by decree of the Conseil d’État.
Community acceptance: While generally less controversial than wind farms, data centers can still face opposition over land use, visual impact, water consumption or generator noise (Public Health Code, Art. R.1334-30 et seq.). Early and transparent engagement, coupled with highlighting benefits such as waste-heat reuse, is crucial to reducing litigation risks, including third-party claims (recours des tiers) or claims for abuse of power (recours pour excès de pouvoir).
Four Practical Solutions for Efficient and Responsible Expansion
- Acceleration Zones for Digital Infrastructure. Inspired by renewable energy acceleration zones under Law n° 2023-175 of 10 March 2023 (Loi APER, Art. L.141-5-3, Energy Code (Code de l’énergie)), municipalities could designate areas pre-vetted for data centers. Such zones, assessed under Directive 2001/42/EC (Environmental Code (Code de l’environnement), Art. L.122-4), would provide legal clarity on land use, grid access and environmental impact, reducing uncertainty while ensuring ecological safeguards.
- Transparent Grid Capacity and Reserved Slots. Regional grid capacity maps and transparent allocation rules could deter speculative bookings and provide investors with reliable timelines. The “use-it-or-lose-it” (UIOLI) approach makes such visibility critical: developers must anticipate ramp-up obligations and plan for potential capacity reductions if usage does not match projections.
- Standardized ICPE Requirements for Auxiliary Equipment. Since data centers fall under ICPE rules because of auxiliary systems, standardization is essential. Models issued by the Ministry for Ecological Transition could harmonize thresholds for emissions, noise, and testing of backup generators and cooling systems. This would improve predictability for investors and consistency across the country.
- Early Planning and Regulatory Clarity. Anticipating obligations under the Energy Code (Code de l’énergie) (Arts. L.236-1 and L.236-2) — including annual energy reporting for facilities above 500 kW and mandatory heat recovery above 1 MW — will be key. Designing projects with compliance in mind reduces retrofit costs and demonstrates regulatory alignment.
Conclusion: A Window of Opportunity
With AI and cloud demand surging, France cannot afford to be sidelined in the race for digital infrastructure. At the same time, regulators and communities demand robust safeguards for land, water and energy use.
The Bill on the Simplification of Economic Life (Projet de loi de simplification de la vie économique), adopted on 17 June 2025 by the National Assembly (Assemblée Nationale), introduces simplifications for the development of data centers in France. Article 15 creates the possibility for certain data centers to be designated as projets d’intérêt national majeur (PINM), granting access to accelerated administrative procedures, including:
- State-led building permits (Urban Planning Code, Art. L.422-2);
- Streamlined alignment with local urban plans;
- Expedited grid connection procedures; and
- Facilitated derogations for protected species (Environmental Code, Art. L.411-2).
Further to the reconciliation of the text by the Parliament in a joint committee (commission mixte paritaire), the Bill must then be promulgated, and forthcoming implementing decrees will need to establish the eligibility criteria. Nonetheless, the PINM designation — when combined with the autorisation environnementale unique (AEU) and the evolution of the grid connection process —could materially reduce legal uncertainty and accelerate project delivery timelines.
[1] A data center is defined as a structure or group of structures used to host, connect, and operate computer systems or servers and related equipment for the storage, processing, or distribution of data, as well as for related activities.
