Navigating the future of data centres in Sweden II: AI workloads, liquid cooling and the emerging legal challenges

Sweden’s role as a premier destination for data centres continues to grow. As outlined in the previous article, this is fuelled by its abundant renewable energy, cutting-edge digital infrastructure, and supportive regulatory environment. However, as AI-driven workloads push the boundaries of computing power, new regulatory and sustainability challenges are emerging. Stricter energy efficiency requirements, evolving environmental regulations, and the increasing need for advanced cooling solutions – such as liquid cooling – necessitate a forward-thinking legal approach.

Why is liquid cooling needed?

As AI workloads become more complex and intensive, traditional air-based cooling methods in data centres are increasingly struggling to handle the high heat densities generated by modern high-performance computing (HPC) systems. AI-driven data centres require advanced cooling solutions to maintain efficiency, prevent hardware degradation, and support long-term operational sustainability. Liquid cooling is emerging as the most viable solution to meet these demands due to several key factors:

• Greater energy efficiency – Liquid cooling is significantly more effective at dissipating heat than traditional air cooling, leading to lower energy consumption.
• Higher computing density – AI workloads require high-density server racks, which generate more heat. Liquid cooling enables more compact, powerful data centre setups.
• Sustainability benefits – With increasing regulatory pressure on sustainability, liquid cooling helps data centres reduce their carbon footprint by lowering overall power usage and reliance on conventional HVAC systems.

Legal and regulatory challenges

While liquid cooling offers clear benefits, it introduces new regulatory considerations that operators must address:

Environmental regulations and water usage

• Liquid cooling requires careful management of water sourcing, usage, and disposal. Companies must comply with Sweden’s environmental regulations, including those governing water conservation and chemical additives used in cooling fluids.
• Environmental permits may be required for certain liquid cooling systems, particularly those involving direct water discharge.

Health and safety compliance

• Liquid-cooled data centres must adhere to Sweden’s strict workplace health and safety standards. This includes ensuring proper handling of cooling liquids and minimising risks of leaks or system failures that could impact staff or equipment.
• Some cooling fluids may be subject to hazardous substance regulations, requiring compliance with Regulation (EC) No 1907/2006 - Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH).

Infrastructure and retrofitting considerations

• Existing data centres transitioning to liquid cooling may require modifications to their infrastructure, which could trigger additional building permit requirements under Sweden’s construction laws.
• Operators must also consider contractual adjustments in colocation agreements, as traditional data centre leases – designed for air cooling – may not account for the specialised infrastructure required for liquid cooling.

Future-proofing AI data centres

As AI technology continues to evolve, data centre operators must adopt forward-thinking legal and regulatory strategies to ensure long-term compliance, operational efficiency, and sustainability. The increasing demand for high-performance computing (HPC) and AI-driven workloads is accelerating the shift towards liquid cooling solutions, which offer significant advantages in energy efficiency, computing density, and environmental impact reduction. However, integrating such technologies requires careful navigation of regulatory approvals, infrastructure planning, and sustainability compliance.

Operators must anticipate emerging EU and Swedish regulations related to energy efficiency, environmental impact assessments, and water usage in liquid cooling systems. Additionally, evolving cybersecurity frameworks, workplace safety laws, and ESG (Environmental, Social, and Governance) reporting obligations will play a crucial role in shaping the future of AI-ready data centres.

A proactive approach – one that aligns technological advancements with legal certainty and compliance – will be essential for future-proofing investments and maintaining competitiveness in Sweden’s expanding data centre market. By integrating liquid cooling solutions with robust regulatory strategies, operators can drive innovation, reduce operational risks, and position themselves as leaders in the next generation of AI-driven infrastructure.

This article was co-authored by Simon Rosén, Business Development Coordinator, CMS Wistrand