EPA moves to reduce air pollution oversight for data centers

New guidance and proposed rule changes from the Environmental Protection Agency (EPA) are reducing federal oversight and public participation requirements for industrial air permits, specifically impacting the rapid expansion of data centers.

Under new guidance, the Clean Air Act’s Acid Rain Program will not apply to “islanded” power plants—facilities built to serve a single site rather than the broader electricity grid. This shift follows a trend where state leaders, such as Pennsylvania Governor Josh Shapiro and Texas Governor Greg Abbott, have moved to require or mandate that data centers provide their own power to protect utility ratepayers.

Additionally, the EPA plans to eliminate federal requirements for public notice and comment periods under the New Source Review process. This change would shift the responsibility of public notification to state and local agencies. Environmental advocates, including the Southern Environmental Law Center, warn that this could allow developers to secure permits and begin construction without notifying nearby residents of potential pollution impacts.