The number of data centers in the U.S. is growing rapidly as artificial intelligence, cloud computing, and everyday internet use drive unprecedented demand for computing capacity.
As the number of data centers in the U.S. surpasses 5,000, this growth also brings a new and fast-evolving body of environmental regulation, discussed in depth at the Air & Waste Management Association's (A&WMA) Data Center Insights and Innovation Conference.
The conference was held March 2026 in the Dulles Technology Corridor of Northern Virginia, home to the largest concentration of data centers in the world. Regulators, leaders, and data center operators examined the environmental dimensions of data center development. This included topics such as air permitting and emissions modeling, noise, water use, hazardous waste management, environmental justice, and grid impacts.
Below are a few standout themes.
Why Are Data Centers Regulated Like Power Plants?
Data centers are increasingly treated by air agencies as "pseudo-utility" power plants. The reason is backup power. A single hyperscale — a very large data center designed to support massive cloud computing and AI — may host dozens of diesel-fueled emergency generators. Some facilities are adding gas turbines for prime power or grid support, due to their significant electricity needs. A hyperscale typically requires tens to hundreds of megawatts of power and the ability to rapidly expand capacity.
Even though these engines run intermittently, their combined potential to emit can approach or exceed major source thresholds under the Clean Air Act. Air permitting is frequently identified as a high-risk component of data center development, with potentially critical schedule implications. Recurring topics included the following:
- New Source Review (NSR) applicability. The permitting timeline can vary depending on whether a facility is considered a true minor source, a synthetic minor source with enforceable limits, or a major source subject to Title V Prevention of Significant Deterioration (PSD) review. Most large data centers apply for synthetic minor status and accept stringent operational limits to stay below the review threshold.
- Generator permit conditions. Engines must meet federal New Source Performance Standards (NSPS) for emergency engine certification, which requires the use of ultra-low sulfur diesel and limits operation to emergencies, testing, and maintenance. Many jurisdictions now layer on Tier 4 engine requirements, as well as initial NOx stack testing for a portion of the generator fleet, and require detailed recordkeeping on run time, load, and control technology.
- Project management. When a data center is permitted with sets of generator groups, manually demonstrating compliance becomes impractical. Operators need robust project management and are moving toward automated data systems that track hours, loads, and emissions parameters at the individual engine level.
The line between "emergency" and "non-emergency" generator operation is becoming a high-stakes question as grid constraints drive planned outages and demand response opportunities. Navigating that boundary requires a sophisticated permitting strategy.
How Does Air Dispersion Modeling Shape Data Center Permitting Strategy?
Several consulting and agency presentations focused on air dispersion modeling as both a compliance requirement and a design tool. Because emergency generators typically have short stacks located near tall server buildings, the modeled ground-level concentrations can be surprisingly high due to building downwash effects.
Presenters shared practical strategies for modeling early in design to achieve favorable outcomes. These strategies include right-sizing stack heights before equipment is ordered, orienting facilities relative to prevailing winds, consolidating generator exhausts for greater plume rise, expanding property boundaries and fence lines, and scheduling required testing during daytime hours when atmospheric dispersion is strongest.
Dispersion modeling performed during site planning, rather than after the layout is fixed, can materially reduce permitting risk and avoid costly redesign. Some minor source programs require no criteria for expanding modeling expectations specifically because of data center growth. The EPA's Office of Air and Radiation announced data center streamlining actions, including a proposed rule to clarify NSR preconstruction permitting.
Is Site Selection and Environmental Justice Part of Data Center Air Permitting?
Environmental justice, or EJ, considerations surfaced throughout the air permitting discussions. Some states now require an EJ screening score as part of the permit application itself, alongside zoning approval and noise analysis. Other states are integrating EJ screening, cumulative impact analysis, and ambient monitoring directly into permitting decisions.
Colorado-Specific Environmental Justice Considerations
Colorado offers one of the clearest examples of this trend. Under the state’s Disproportionately Impacted Community Permitting Rule (Air Quality Regulation Number 3), air permit applicants for facilities in designated communities must prepare Environmental Justice Summaries and may face enhanced modeling, source-specific monitoring, and expanded public engagement requirements.
Colorado's 2024 Cumulative Impacts and Environmental Justice Act extended these authorities, and state legislators have since introduced data-center-specific legislation addressing energy use, utility costs, and protections for disproportionately impacted communities. The state is one of the fastest-emerging data center markets in the west, and developers evaluating Colorado sites recognize that EJ screening is no longer a late-stage compliance exercise, now playing a critical role in a project’s feasibility.
Presenters emphasized that community concerns are now influencing physical project decisions including site selection, generator layout, stack placement, and operational restrictions. Public health researchers also presented emerging data on the health implications of dense data center clusters, particularly diesel particulate matter exposure, reinforcing why agencies and communities are scrutinizing these facilities more closely.
How Do Data Center Regulations Vary by State?
State-by-state inconsistencies were a universal frustration voiced by both developers and consultants. Routine requirements in one jurisdiction (such as Tier 4 engines, dispersion modeling, noise studies, and EJ screening) may be absent or entirely different in the next. Supply chain constraints further compound the challenge; for instance, acquiring Tier 4 engines and selective catalytic reduction (SCR) systems can carry lead times of up to two years as the entire industry competes for the same equipment.
Curtailment and grid reliability were also a recurring theme. As transmission infrastructure is expanded to serve new loads, planned outages raise difficult questions about when emergency generators may legally operate. For developers, understanding how a state defines "emergency" operation has become a genuine due diligence question.
Community Acceptance: The New Siting Criterion for Data Centers
Perhaps the most telling perspective came from Loudoun County, Virginia, home to more than 250 data centers and the epicenter of "Data Center Alley.” For years, data centers and the community coexisted productively. The facilities generated enormous tax revenue that lowered residents' tax burden while demanding little in public services.
But as the facilities multiplied and grew, public sentiment shifted. Concerns about visual impacts, noise, transmission line expansion, and electrical grid strain have accumulated, and the county that built the world's largest data center cluster has since eliminated by-right data center development, requiring every new project to undergo legislative review and public hearings.
The lesson for the industry is not subtle: if community acceptance can erode in the jurisdiction with the longest and most economically beneficial data center track record in the country, it can erode anywhere. Indeed, localities across the U.S. have increasingly paused, restricted, or rejected data center proposals over the past two years.
Community Considerations on the Front End
Community protections are frequently put in place, including gas-insulated substations with smaller footprints; partially below-grade and more compact building designs; berms, landscaping, and acoustic buffers; closed-loop cooling systems to reduce water consumption; and even a growing server recycling industry that deconstructs and rebuilds retired hardware. But design improvements alone are not enough — site selection has become a singularly critical component of due diligence.
Power availability, air pollution attainment status, air permitting feasibility, and noise compatibility remain the technical foundation. However, projects also need a credible sustainability commitment and tangible community benefits to earn what several speakers called the “social license to operate.”
For developers, this means environmental strategy can no longer be sequenced after site control. The projects that succeed will be those that integrate community considerations into site selection and site design from day one.
An Integrated Approach to Data Center Environmental Services
The themes from the conference tie directly to how FirstCarbon Solutions (FCS), Cameron-Cole and our ADEC Innovations affiliates support data center and large-scale development projects nationwide:
- Air quality analysis and permitting — NSR/synthetic minor permitting strategy, Title V, dispersion modeling for backup generator fleets and/or gas turbine energy generation.
- Site selection and site design — environmental due diligence screening potential sites and integrating air quality, noise modeling, and mitigation design integrated into facility layout from the outset.
- Biodiversity-informed development — biological resources assessments and site designs that support native flora and fauna, a growing emphasis in data center sustainability commitments.
- Sustainability consulting — greenhouse gas accounting, renewable energy strategy, and ESG reporting through our affiliate ADEC ESG, supporting the sustainability commitments that communities increasingly expect.
- Project management and oversight — permitting coordination, mitigation monitoring, and construction compliance oversight from entitlement through operation.
