The short version
- Advocates claim data center operators are dividing emission sources into multiple minor permits to avoid stricter federal review processes required for major pollution sources.
- Specific cases in North Carolina, New Mexico, and Maryland illustrate how companies may be using this strategy to reduce costs, speed up approvals, and limit public scrutiny of their environmental impact.
- Former EPA officials describe the tactic as 'lego permitting,' noting that while not unique to the industry, it has become more prevalent among data center developers in recent years.
Environmental groups are raising alarms about a growing trend in which data center developers allegedly manipulate federal air pollution permitting processes to evade stricter regulatory oversight. According to advocates, companies are structuring their projects to avoid classification as 'major' sources of emissions, thereby sidestepping comprehensive reviews that would otherwise require costly pollution controls and extensive public scrutiny. This practice, described by former regulators as a form of regulatory arbitrage, allows facilities to secure approvals more quickly while potentially exposing nearby residents to higher levels of hazardous air pollutants.
Under the Clean Air Act, facilities identified as major sources of air pollution must undergo rigorous pre-construction reviews. These evaluations ensure that new emissions do not cause or contribute to violations of national ambient air quality standards in the surrounding region. The process can be lengthy and often mandates the installation of advanced emission control technologies, such as scrubbers, if projected pollution levels exceed legal limits. By contrast, minor sources face significantly less stringent requirements, creating a financial and procedural incentive for developers to fragment their operations.
Critics argue that data center operators are exploiting this loophole by dividing single facilities into multiple smaller units, each submitting separate permit applications that fall below the threshold for major source review. Michael Koerber, a retired deputy director of the EPA’s Office of Air Quality Planning and Standards, characterized this approach as 'lego permitting.' He noted that consultants employed by these firms are adept at identifying regulatory shortcuts, allowing clients to fly under the radar and minimize attention from both regulators and local communities.
In North Carolina, Amazon and Duke Energy have come under scrutiny for installing 649 diesel generators to support a new hyperscale data center. The companies submitted two separate permits for these generators, effectively avoiding a major review despite the facility’s location in a low-income area already burdened with high levels of air pollution. Advocates contend that this fragmentation obscures the true extent of pollution exposure for residents living near the site, making it difficult to assess cumulative health impacts.
Similar tactics were observed in New Mexico, where developers of the Project Jupiter data center attempted to circumvent major review requirements by proposing two natural gas microgrids for different sections of the facility. Each grid was designed to emit just below the federal limit for hazardous air pollution, which stands at 25 tons per year for minor sources. However, combined, the grids would have released up to 44 tons of hazardous pollutants, a volume that would typically trigger a major source review.
Legal representatives for community members in New Mexico condemned the strategy as an audacious attempt to distinguish two halves of the same emission source. Maslyn Locke, an attorney involved in the case, argued that the maneuver insulted both regulators and residents by clearly seeking to avoid air pollution control mandates. The proposal faced fierce opposition from local advocates and state environmental officials, leading the developer to withdraw the application in April. New plans for the project remain stalled pending further legal and regulatory developments.
In Frederick, Maryland, regulatory documents reveal that four data centers, including one operated by Amazon, function on a single campus under a master developer while holding separate minor permits. This arrangement allows each facility to operate independently in terms of permitting, despite their physical proximity and shared infrastructure. Advocates point out that staggering permit requests over months can result in cumulative emissions equivalent to those of a major source, yet without the corresponding regulatory safeguards.
While Koerber noted that such permitting strategies are not exclusive to the data center industry, he acknowledged that their use has become more common among tech firms in recent years. Cheryl Vetter, a former EPA employee who worked alongside Koerber, indicated that this tactic was not widespread during her tenure but has gained traction since she left the agency. Amazon has defended its actions, stating through a spokesperson that it appropriately applied for and obtained necessary air permits for its projects.
The implications of these practices extend beyond individual facilities, raising broader questions about the effectiveness of current environmental regulations in addressing emerging industrial challenges. As data centers continue to expand to meet growing digital demands, the tension between rapid development and environmental protection intensifies. Regulators face increasing pressure to close loopholes that allow companies to fragment emissions sources, ensuring that public health remains a priority in the face of technological advancement.
Moving forward, advocates are calling for stricter enforcement of existing laws and greater transparency in the permitting process. They argue that without meaningful reforms, vulnerable communities will continue to bear the brunt of unchecked industrial pollution. The outcome of ongoing legal battles and regulatory reviews in states like New Mexico and North Carolina could set important precedents for how future data center projects are evaluated and permitted across the United States.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Datacenter developers accused of skirting key US pollution rules
