How Data Centers Are Weakening the Clean Air Act and Increasing Pollution

Across the United States, the rapid expansion of data centers is straining the nation’s power grid and raising concerns about environmental impacts, costs, and regulatory oversight. Governors, consumer advocates, and environmental groups are increasingly calling for data centers to generate their own electricity, arguing this could shield ratepayers from rising costs and prevent utilities from shouldering the financial burden of these energy-intensive facilities.

Pennsylvania Governor Josh Shapiro recently announced a moratorium on artificial intelligence data centers that do not develop and pay for their own power, citing concerns over electricity costs. Similarly, Texas Governor Greg Abbott has blocked new data centers from connecting to the state’s power grid. These moves reflect growing unease among policymakers and the public about the environmental and economic costs of data center growth.

However, new guidance from the Environmental Protection Agency (EPA) suggests that exempting data center power plants from certain Clean Air Act regulations could weaken environmental protections. The EPA’s recent clarification states that the Acid Rain Program—which regulates sulfur dioxide and nitrogen oxide emissions—does not apply to power plants that operate independently from the electrical grid. This exemption removes one layer of oversight for these facilities, even though some legal experts argue they were never covered by the program in the first place.

The Acid Rain Program, established in 1990 under the Clean Air Act, primarily targets large utility power plants that supply electricity to the public. It has been effective in reducing harmful emissions, with sulfur dioxide and nitrogen oxide levels dropping significantly since its implementation. But the EPA’s guidance now exempts islanded power plants—such as those built exclusively for data centers—from these monitoring and reporting requirements.

Legal experts, including Mindy Goldstein of Emory Law School’s environmental law program, warn that this exemption removes a key tool for state regulators to track emissions. Joe Goffman, a former EPA official now with the Environmental Protection Network, emphasizes that local regulators will need to take additional steps to ensure transparency and accountability for these facilities.

The surge in data center construction has also accelerated the demand for new power generation, particularly natural gas plants. Companies like OpenAI, Amazon, and Nexus are planning massive gas-powered plants to meet the energy needs of data centers, with some projects exceeding 7 gigawatts in capacity. These developments mark a shift in the utility sector, which had been moving away from fossil fuels toward renewable energy.

While the EPA argues that its guidance provides flexibility for businesses while protecting the environment, critics say it weakens oversight. The agency has also proposed rule changes that would streamline permitting for minor pollution sources, reducing public notice and comment requirements. Environmental advocates, including Goldstein, see this as part of a broader effort to facilitate data center expansion with minimal regulatory hurdles.

Some data center operators are also bypassing local permitting processes. In Georgia, VoltaGrid and Serverfarm were cited for beginning construction before securing permits, while the NAACP has filed a lawsuit alleging that xAI failed to obtain permits for a 495-megawatt plant in Mississippi.

Energy law expert David Spence suggests that the current political climate makes aggressive regulation unlikely. He notes that if AI had emerged decades earlier, when environmental regulations were stricter, the growth of data centers might have faced greater scrutiny.

As the debate over data center energy use continues, state regulators and environmental groups will play a critical role in ensuring that new facilities comply with existing laws while protecting communities from pollution and rising costs.

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