Data center developers are increasingly utilizing regulatory loopholes to bypass rigorous air pollution oversight, according to environmental advocates and former federal regulators. By fracturing large-scale emission sources into smaller, individual permit applications, these companies are allegedly avoiding the stringent “major source” reviews required under the Clean Air Act, effectively shielding their projects from public scrutiny and expensive pollution control requirements.
Under the Clean Air Act, facilities that cross specific emission thresholds for pollutants—such as nitrogen oxides, particulate matter, and hazardous air pollutants—are subject to comprehensive federal review. This process ensures that new projects do not push local air quality past safety limits. However, advocates contend that “lego permitting”—the practice of dividing a single large facility into multiple “minor” sources—allows developers to circumvent these safeguards.
Michael Koerber, a retired deputy director of the EPA’s Office of Air Quality Planning and Standards, describes the strategy as a deliberate effort to evade regulatory attention. “They want to fly under the radar,” said Koerber, who now volunteers with the Environmental Protection Network. “They have consultants who are very good and know where the shortcuts are.”
The pattern has surfaced in multiple states. In New Mexico, the proposed Project Jupiter data center sought to categorize two natural gas microgrids as separate minor sources. Had the grids been permitted as a single facility, the combined emission levels would have triggered a mandatory major source review. Attorneys with the New Mexico Environmental Law Center characterized the attempt as “preposterous,” noting that the project would have released nearly double the federal threshold for hazardous air pollutants. The developer ultimately withdrew the application following intense community pushback and opposition from state regulators.
A similar dynamic is playing out in North Carolina, where Amazon and utility provider Duke Energy have proposed installing 649 diesel generators to support a new hyperscale data center. Despite the massive cumulative output of pollutants—including approximately 250 tons per year of nitrogen oxides and significant amounts of benzene and formaldehyde—the companies submitted two separate permit applications.
Kathleen Sullivan, an attorney with the Southern Environmental Law Center, argues that this bifurcation allows the companies to avoid a major review, despite evidence suggesting that Amazon exerts centralized control over the entire generator array. “North Carolina regulators failed to protect people’s health and the air we all breathe by blindly accepting the companies’ self-interested statements instead of doing their job to investigate the key facts,” Sullivan said.
The industrial region surrounding the North Carolina site is already burdened by pollution from existing power plants and manufacturing facilities. Residents in the area face higher rates of heart disease, cancer, and respiratory issues, which local advocates warn will be exacerbated by the additional emissions from the data center’s backup power systems.
The trend has reached as far as Frederick, Maryland, where regulatory documents show four separate data centers—at least one operated by Amazon—functioning on a single campus under a master developer, yet maintaining distinct minor permits.
In response to these allegations, an Amazon spokesperson stated that the company “appropriately applied for and obtained an air permit” and that the separate permitting reflects “the actual ownership and operational structure” of the projects.
For critics, the practice highlights a fundamental failure in regulatory enforcement. Experts note that while the law allows for separate permitting in specific instances—such as when multiple independent companies operate at the same site—it does not permit such divisions when activities are under common control. As the demand for data centers continues to surge, environmental groups are calling for stricter, more holistic oversight that evaluates the true, cumulative environmental impact of these massive, energy-intensive facilities rather than allowing developers to dissect them to meet convenient regulatory labels.
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