Proposed Regulatory Shifts

The Environmental Protection Agency intends to eliminate federal public participation requirements within the New Source Review process, a permitting framework established in the 1970s. Under this proposal, the responsibility for notifying the public about new pollution sources would shift from Washington to state and local air agencies. EPA Administrator Lee Zeldin defended the move as an effort to cut burdensome red tape, arguing that local authorities are better positioned to manage permitting decisions than federal regulators.

Just as new data centers face growing backlash from neighboring communities, the US Environmental Protection Agency (EPA) is about to make it harder for people to weigh in on any pollution those centers create. The EPA plans to toss out a federal rule requiring public notice and an opportunity to comment when certain industrial sites apply for an air permit.

Advocates warn that the move would allow data center developers and other industries to break ground without giving nearby residents a say, or even a warning that construction is planned. “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.

Impact on AI Infrastructure

These changes specifically target 'minor' pollution sources, which the EPA describes as having limited environmental impact and low emissions. However, this category includes data centers and their supporting power plants—facilities that have recently become focal points of community opposition due to the rise of generative AI. Critics argue that removing federal mandates allows developers to accelerate construction by avoiding public hearings and resident feedback.

Nobody knows what’s happening until the bulldozers are out there.” The EPA’s proposed changes apply to a permitting process that’s been in place since the 1970s called New Source Review that applies to a wide range of facilities, from landfills and paper mills to power plant expansions. More recently with the rise of generative AI, these permits have also become a flashpoint for opposition to new data centers, as well as to power plants built to provide electricity for all those servers.

In July, the EPA announced that it would eliminate the federal public participation requirement for a large set of polluters and place that burden on states. The plan would leave it up to state and local air agencies to decide whether or not to notify the public about certain new sources of pollution — leaving advocates concerned that many of these agencies would forgo the process altogether.

Air pollution is often regulated at the federal level because it can waft across the country, affecting residents in one state even if the source is in another.

Community and Legal Concerns

Environmental groups, including the Southern Environmental Law Center (SELC), contend that 'minor' sources can still cause significant local harm. Keri Powell of the SELC suggests the rule change could allow permits to be issued behind closed doors, leaving residents unaware of projects until construction begins. Furthermore, Byron Gary of the Kentucky Resources Council notes that losing mandated public comments deprives agencies of lived-experience data essential for evaluating cumulative environmental impacts.

“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 said in a statement at the time. “We are cutting unnecessary and burdensome red tape.” The change applies to so-called “minor” sources of pollution, which the EPA says in its announcement “have relatively low emissions and limited environmental impact.” Powell’s group contends that the “minor” label is a misnomer and that the permitting process routinely covers projects that can have significant consequences for their neighbors.

Precedents in Data Permitting

Recent projects illustrate the volatility of these permits; xAI's Colossus data center in Tennessee applied for a minor source permit in 2025, triggering thousands of public comments. That specific project also faced legal threats from the NAACP and SELC over the installation of unpermitted gas turbines. In response to the EPA's current proposal, nearly 200 health and environmental organizations have formally requested that the agency withdraw the plan.