In June, a month before the requirement was due to take effect, the federal government amended the 2023 Energy Efficiency Act so that operators would only have to assess whether reusing heat, for example by feeding it into municipal heating systems, is technically and economically feasible.
The amended bill is due to go to the German parliament for ratification imminently.
The change follows complaints from industry, with the German Data Center Association calling an early version of the bill a "data center prevention act."
Germany has said it wants to double its data center fleet and quadruple the compute available for running AI models by 2030, partly to reduce dependence on the United States and to lift a faltering economy.
EU member states, meanwhile, have pledged to cut greenhouse gas emissions 55 percent by the end of the decade.
Former senior energy ministry official Patrick Graichen accuses the government of sacrificing climate targets to ride the AI wave, while Economy and Energy Minister Katherina Reiche said practical rules would create conditions for digital sovereignty and economic growth.
Developers argued the original law could oblige them to reuse heat even when no one nearby could take it, such as a district heating network or greenhouse farms. Consultant Barbara Smitten of Cundall said some requirements were outside operators' control. Over the past 18 months, Stack Infrastructure canceled a $3 billion facility in Hesse and state-owned Komm.ONE withdrew from a Baden-Württemberg project, with Komm.ONE citing the law's burdens. Graichen counters that heat reuse is technically straightforward when a buyer exists, a view shared by John Booth of Carbon3IT. Smitten says the change makes Germany more attractive to builders, but critics warn it could invite the climate-driven opposition that has produced permitting freezes and moratoria in the US. In February, a small German town's council voted to block a $2.5 billion data center, partly over climate concerns.