EPA Proposes Rule Shift to Streamline Air Permits for AI Data Centres

The US Environmental Protection Agency (EPA) has proposed a rule change that would delegate authority to individual states to determine the level of public participation required for minor air pollution permits. The proposal, which was the subject of a public hearing on Wednesday, aims to streamline the permitting process for facilities such as gas plants and diesel generators. These facilities are increasingly being utilised to power data centres, a sector that is seeing unprecedented capital inflows as the artificial intelligence industry expands.

Under the Clean Air Act, polluting sources must obtain permits, with major sources undergoing rigorous federal and state review. However, the scope of minor source permits is broad, covering everything from dry cleaners to diesel and gas engines. Companies including xAI and Meta are currently using these minor source permitting processes to build behind-the-meter gas plants for their data centres. The proposed rule would allow state and local agencies to decide whether, when, and for how long to provide opportunities for public participation for these new or modified minor sources.

Critics argue the move facilitates the expansion of artificial intelligence infrastructure by reducing community oversight and notice periods. Keri Powell, an attorney with the Southern Environmental Law Center, noted that groups often rely on public air permit applications to alert utilities about construction issues. In states like Georgia, which has a more robust public notification process, the removal of federal requirements could leave community and legal groups with little to no heads-up about upcoming projects.

The impact of the rule will vary significantly depending on state-level enforcement. Georgia and Kentucky currently have stronger public participation laws for minor source permits compared to states like Texas, where lower enforcement levels have allowed a massive buildout of private gas plants with limited community notice. Byron Gary of the Kentucky Resources Council stated that while state agencies have made an informal commitment to keep rules the same, this could shift depending on future administrations.

The regulatory shift coincides with a broader push by the Trump administration to make the US the AI capital of the world. Spending on data centre construction outpaced spending on public transportation infrastructure for the first time in June. With public opposition increasingly becoming a bottleneck for development, critics view the timing of the rule revision as part of a package of measures designed to accelerate AI infrastructure buildout.