White House Aims To Accelerate Environmental Permitting For Data Centers

On July 23, 2025, the White House issued an Executive Order titled “Accelerating Federal Permitting of Data Center Infrastructure.” Released alongside “America’s Artificial Intelligence (AI) Action Plan,” the Order reflects a broader federal goal to reduce permitting delays for large-scale data center projects supporting AI workloads and national infrastructure. The reforms focus on streamlining federal environmental review and permitting processes, thereby aiming to address longstanding regulatory hurdles that have historically contributed to project delays and cost overruns.

“Qualifying Projects” Expressly Defined

The Order defines “Data Center Project” as a facility requiring more than 100 megawatts (MW) of new load “dedicated to AI inference, training, simulation, or synthetic data generation.” It also speaks to “Covered Components” as those “materials, products, and infrastructure” necessary to build Data Center Projects or upon which they depend.

Data Center Projects and Covered Component Projects are deemed to be “Qualifying Projects” under the Order, so long as they involve a total capital investment exceeding $500 million, require at least 100 megawatts of new electrical load, protect national security, or are a project otherwise designated by the Secretary of Defense, the Secretary of the Interior, the Secretary of Commerce, or the Secretary of Energy. The scope of environmental permitting reform efforts is limited to these categories, and early-stage screening will be necessary to confirm eligibility.

Siting Data Centers on Brownfields and Federal Land May Facilitate Faster Development

The Order emphasizes the siting of data center development on previously disturbed land, particularly brownfield and Superfund sites, as well as on federally controlled land. Specifically, it directs the U.S. Environmental Protection Agency (EPA) to identify eligible sites and to develop guidance to expedite environmental reviews, enabling project sponsors to leverage existing cleanup certifications and site infrastructure to streamline permitting and minimize potential controversy.

In addition, the Order directs the Departments of the Interior, Energy, and Defense to authorize data center construction on suitable federal lands. Projects on federal land typically require only federal permits and approvals, which avoids the need for additional lengthy state and local review processes.

New Federal Efforts to Expedite Environmental Review and Permitting

• National Environmental Policy Act (NEPA) Review: To reduce NEPA statutory review timelines, the Order directs the Council on Environmental Quality (CEQ) to coordinate with agencies in identifying or establishing new categorical exclusions for data center-related construction activities that customarily result in less than significant environmental effects. Categorical exclusions are a procedural mechanism that, when applicable, can exempt a project from needing to prepare lengthy environmental assessments or environmental impact statements, thereby facilitating a quicker project approvals process.
  
  In addition, in a potentially significant move for project structuring, the Executive Order establishes a presumption that projects receiving less than 50% of their total capital costs from federal financial support do not constitute “major Federal actions” under NEPA. As a result, many data center projects with limited federal funding may be exempt from NEPA’s environmental review requirements. This federal-funding threshold could materially reduce the number of projects subject to NEPA altogether, though its ultimate impact will depend on how federal agencies interpret and implement the Order’s guidance.

• Clean Water Act (CWA) Permitting: With respect to waters and wetlands permitting, the Order directs the U.S. Army Corps of Engineers to identify opportunities to apply or develop a data center-specific nationwide permit under Section 404 of the CWA and Section 10 of the Rivers and Harbors Appropriation Act of 1899. If finalized, such a permit could streamline the approval process for routine site preparation activities that currently require individual permits and interagency consultation.
• Clean Air Act (CAA) Permitting: The Order directs the EPA to develop or modify regulations under the CAA to expedite permitting for large-scale data center infrastructure. Data centers frequently utilize emergency backup generators to maintain uninterrupted operations. These generators are typically subject to air permitting requirements under the CAA, which can contribute to regulatory delays. The Order instructs the EPA to pursue streamlined permitting processes to shorten review periods for these facilities where possible, while ensuring compliance with the Act.
• Endangered Species Act (ESA) & Programmatic Consultation: The Order mandates programmatic consultation between the Secretary of the Interior, the Secretary of Commerce, or both, under Section 7 of the ESA for common construction activities for Qualifying Projects that will occur over the next 10 years at a programmatic level. Programmatic consultations may help avoid repetitive project-specific reviews or the need for project-specific biological opinions.

State and Local Environmental Review Still Applies

The Order and Action Plan do not preempt state environmental laws and permitting requirements. Many states maintain parallel statutes that mirror key aspects of NEPA, the CWA, the CAA, and the ESA. For instance, states such as California (through the California Environmental Quality Act (CEQA)) may require independent, project-specific environmental review for discretionary projects even when a federal NEPA categorical exclusion applies. Likewise, state air and water boards and natural resource agencies retain independent authority to evaluate emissions, discharges, and biological and wetlands impacts. Additionally, local jurisdictions often impose land use regulatory requirements as part of the project approval process. As a result, state and local permitting requirements may still extend project permitting timelines despite the Order’s federal streamlining directives.

Looking Ahead

The July 2025 Executive Order and AI Action Plan signal a potentially meaningful shift in federal environmental permitting policy for qualifying data center projects. Nevertheless, most data center projects will continue to require a mix of federal, state, and local permits. The practical impact of these new federal streamlining measures will depend on a range of factors, including project location, ownership structure, environmental conditions, and the extent to which states choose to align their own permitting processes with federal reforms.

Allen Matkins will continue to monitor forthcoming federal agency implementation and guidance over the coming months to better determine how much permitting relief these federal reforms may ultimately provide for AI data centers. For further information on how these federal reforms might affect your project, please contact a member of our Land Use, Environmental & Natural Resources team.