EPA Proposes Scrapping Rule Allowing Data Centers to Avoid Public Scrutiny on Pollution

The Trump administration intends to eliminate another federal air pollution regulation, a decision critics argue will shield data center developers from public oversight.

Just as new data centers face increasing backlash from local communities, the U.S. Environmental Protection Agency (EPA) is preparing to make it more difficult for residents to evaluate the environmental impact of these facilities.

The EPA plans to repeal a federal mandate that mandates public notification and comment periods for specific industrial sites applying for air permits, raising alarms that developers could begin construction without community input or prior warning.

“You can see why that would be so interesting to an administration that wants to rush through the construction of data centers,” says Keri Powell, senior attorney and air program leader at the Southern Environmental Law Center (SELC). “What EPA would be allowing would be all of those facilities to go through and just not have to deal with the public, issue the permits in secret behind closed doors. Nobody knows what’s happening until the bulldozers are out there.”

This proposed shift targets the New Source Review program, a permitting framework established in the 1970s that covers various industrial operations, including landfills and power plants. With the rapid expansion of generative AI, these permits have become a focal point of opposition to new hyperscale data centers and the power plants required to support them.

In July, the EPA announced its intention to remove the federal public participation requirement for a broad category of polluters and transfer that responsibility to state and local agencies. This change leaves it up to states to decide whether to notify the public, a move advocates fear will result in many agencies opting out of the process entirely, despite the cross-border nature of air pollution.

“The state and local authorities closest to the issues and the public should be making the decisions on the permitting process as much as possible, not Washington,” EPA administrator Lee Zeldin stated in a declaration at the time. “We are cutting unnecessary and burdensome red tape.”

The regulation would affect “minor” sources of pollution, which the EPA claims have “relatively low emissions and limited environmental impact.” However, the Southern Environmental Law Center argues this classification is misleading, noting that the permitting process frequently encompasses projects with significant consequences for neighboring populations.

For instance, xAI’s massive Colossus 1 data center in Tennessee, billed as the “most powerful AI training system yet,” applied for a minor source permit in 2025. This application prompted a hearing and generated thousands of comments from the public, as reported by Inside Climate News. Additionally, the SELC and NAACP threatened legal action against xAI for installing unpermitted gas turbines at the site that same year.

SELC spearheaded a coalition of nearly 200 health and environmental organizations that filed comments last Friday urging the EPA to withdraw its New Source Review proposal. They contend that public comment periods allow residents to provide essential insights regarding the impacts of new industrial facilities.

“[The EPA’s proposal] could deprive the agencies making decisions about these [pollution] sources the necessary lived experience data of those communities. Without that information, it is impossible for permitting agencies to evaluate the full, cumulative impact of these facilities,” said Kentucky Resources Council Senior Attorney Byron Gary in a press release.

The public comment period for the EPA’s proposal concluded last week, with EPA spokesperson Carolyn Holran noting that the agency is currently reviewing the more than 4,900 submissions received before any final rulemaking can occur.