EPA Moving to Regulate Data Center Turbines as “Mobile Sources”

Recent statements and rulemakings suggest that the United States Environmental Protection Agency (“the EPA”) is exploring pathways to reduce permitting burdens associated with temporary power sources, such as combustion turbines and diesel generators, which are frequently used during data center construction and early operations.

Most notably, the EPA is considering whether certain portable or truck-mounted units could be classified as “mobile sources” under the Clean Air Act, rather than “stationary sources.”

If adopted, this approach could allow developers to avoid more stringent permitting regimes, including New Source Review (NSR) requirements applicable to major stationary sources, which would likely result in shorter timelines and reduced costs.

Potential Reclassification of Temporary Power Sources

The EPA previewed this concept in its recent updates to the New Source Performance Standards (NSPS) for combustion turbines. The rule introduces a less stringent nitrogen oxides (NOx) standard for “temporary” units and outlines a potential conditional exclusion from the definition of “stationary combustion turbine.”

Under this framework, turbines that meet the definition of “nonroad engines” and comply with Title II mobile source standards could be excluded from stationary source regulation—pending the EPA’s anticipated development of emission standards and certification requirements for portable turbines.

For developers, such a reclassification would represent a significant shift, effectively allowing certain temporary generation assets to bypass NSR permitting and associated control requirements, such as Best Available Control Technology (BACT).

NSR Reform and Construction Flexibility

In parallel, the EPA has submitted a proposed rule for White House review that would clarify the meaning of “begin actual construction” under NSR. The proposal is expected to allow developers to undertake limited pre-construction activities—such as building foundations or structural components—prior to obtaining a permit, provided that no emissions units are installed. This approach, if finalized, would codify prior EPA guidance and could help accelerate project timelines.

Ongoing Challenges: Major Source Thresholds and Aggregation

Despite these potential reforms, developers continue to face challenges under existing NSR frameworks:

• Major Source Determinations: Large clusters of backup generators—common at hyperscale data centers—may collectively trigger major source thresholds, particularly in areas subject to Prevention of Significant Deterioration (PSD) or nonattainment NSR.
• Aggregation Risks: Regulators may aggregate multiple units based on factors such as common ownership, proximity, and operational interdependence, increasing the likelihood of major source classification.
• Synthetic Minor Strategies: Many developers continue to pursue “synthetic minor” status by voluntarily limiting potential emissions to avoid more stringent permitting requirements.

Increased Scrutiny and Policy Divergence

At the same time, data center projects are drawing heightened scrutiny from regulators and policymakers:

• State-level initiatives, such as New York’s ongoing rulemaking, are exploring more comprehensive environmental requirements for data centers.
• Federal lawmakers have raised concerns regarding air emissions, energy consumption, and broader environmental impacts of AI-related infrastructure.
• Local opposition and enforcement risks are increasing, particularly where temporary power sources are deployed without clear permitting pathways.

Recent disputes involving large-scale data center projects underscore the legal and reputational risks associated with reliance on temporary generation assets.

Looking Ahead

The EPA’s anticipated actions regarding mobile source classification and NSR reforms could provide meaningful regulatory relief for data center developers. However, uncertainty remains as to the scope and timing of these changes, as well as how they will be implemented at the state and local level.

In the interim, developers should carefully evaluate permitting strategies for temporary and backup power systems, with particular attention to aggregation risks, emissions limits, and evolving federal and state policy signals.

We will continue to monitor these developments and provide updates as the EPA’s rulemaking progresses.

If you have questions regarding these developments or would like assistance in evaluating how these changes might affect your current or planned data center projects, please contact a member of Frantz Ward’s Environmental or Construction Practice Groups.