On July 23, 2025, President Trump signed an Executive Order entitled "Accelerating Federal Permitting of Data Center Infrastructure" ("Order"), announcing an Administration priority to "facilitate the rapid and efficient buildout" of data centers and associated infrastructure. The Order indicates that the Administration "will utilize federally owned land and resources for the expeditious and orderly development of data centers" by providing streamlined and expedited environmental review, identifying suitable sites for new data centers, and providing financial support such as loan guarantees and tax incentives. The Order applies to new data centers exceeding 100 megawatts ("MW") of load dedicated to artificial intelligence ("AI") training and related components needed to power the facilities, such as energy infrastructure for baseload and backup power supply.
The Order should significantly reduce federal permitting timelines for data center projects, but its effect on projects requiring state and local approvals in California is uncertain. For example, while it may be possible to site individual data centers on federal land and expedite federal permits, associated infrastructure such as transmission lines or pipelines likely will cross non-federal land, requiring additional approvals and, in many cases, environmental review under the California Environmental Quality Act (CEQA). In addition, the California Energy Commission has broad jurisdiction over thermal powerplants (e.g., natural gas plants), including backup energy sources required for data centers, and is expected to continue to assert that jurisdiction over new sources of non-renewable energy in the state. Nonetheless, the Order signals the Administration's goal of promoting AI development and likely will have an impact on new data center development throughout the nation, including in California.
Below is a summary of the core elements of the Order.
Project Eligibility
The Order provides benefits to "Qualifying Projects," including "Data Center Projects" that require "greater than 100 MW of new load dedicated to AI inference, training, simulation, or synthetic data generation," as well as "Covered Component Projects," defined as "materials, products, and infrastructure that are required to build Data Center Projects," including components such as transmission lines, natural gas pipelines, substations, switchyards, natural gas turbines, coal, nuclear, or geothermal power equipment, and infrastructure including backup power supply. To qualify, a Data Center Project or Covered Component must either:
- Commit at least $500 million in capital expenditures;
- Involve an incremental electric load addition of greater than 100 MW;
- Protect national security; or
- Have otherwise been designated by the Secretary of Defense, the Secretary of the Interior, the Secretary of Commerce, or the Secretary of Energy as a "Qualifying Project."
Consistent with the Administration's energy policies, the Order excludes energy-related infrastructure from renewable energy sources and revokes a Biden Administration Order that, among other things, sought to promote data center development combined with new renewable energy facilities.
Environmental Review and Permit Streamlining
Qualifying Projects may benefit from several provisions aimed at streamlining or even eliminating federal environmental review under core federal environmental statutes.
For example, the Order requires federal agencies to identify existing categorical exclusions under the National Environmental Policy Act ("NEPA") that could "facilitate the construction of Qualifying Projects," and directs the Council on Environmental Quality ("CEQ") to coordinate with federal agencies to establish new categorical exclusions for "Qualifying Projects that normally do not have a significant effect on the human environment."
Upon identification of sites by the Secretary of the Interior and the Secretary of Energy (as described below), the Order further directs federal agencies to initiate programmatic consultation under section 7 of the Endangered Species Act with respect to common construction activities for Qualifying Projects that will occur over the next 10 years. The Secretary of the Army also must review the nationwide permits issued under section 404 of the Clean Water Act and section 10 of the Rivers and Harbors Appropriation Act to determine whether an activity-specific nationwide permit is needed to facilitate the efficient permitting of activities related to Qualifying Projects. These directives are designed to streamline review for projects that may impact protected species or waters of the United States.
Finally, the Order directs the U.S. EPA Administrator to assist in expediting permitting for Qualifying Projects on federal and non-federal lands by developing or modifying existing regulations that implement federal environmental statutes (e.g., Clean Air Act, Clean Water Act, CERCLA, TOSCA, and others) and provides that Data Center Projects may qualify under FAST-41, which provides for coordinated federal review designed to speed up the federal permitting process.
Financial Support and Identification of Suitable Sites
In addition to streamlined permitting, the Order seeks to increase data center development by providing financial support and identifying suitable land for development.
The Order directs the Secretary of Commerce to launch an initiative to provide financial support for Qualifying Projects, which could include loans and loan guarantees, grants, tax incentives, and offtake agreements. The Order also declares that federal financial assistance representing less than 50 percent of total project costs shall be presumed not to constitute a "major Federal action," potentially eliminating the requirement for NEPA review for agencies offering only limited financial assistance to Data Center Projects.
The Order also instructs the Department of Interior and the Department of Energy to offer appropriate authorizations for sites identified by these agencies as suitable for Qualifying Projects. One day after issuance of the Order, the Department of Energy announced its selection of four sites "to move forward with plans to invite private sector partners to develop cutting edge AI data center and energy generation projects." The Order further directs the U.S. EPA Administrator and Secretary of Defense to "expeditiously" identify Brownfield Sites, Superfund Sites, and military installations for Data Center Projects and Covered Component infrastructure.
Consistent with the Administration's priorities, the order should facilitate development of AI data centers by streamlining the federal approval process and investing federal financial and real estate resources in data center development. The impact of the Order in California remains unclear, however, given the likelihood that State permitting processes will remain applicable to some components of data center developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
