Governments tighten data centre construction rules as AI infrastructure demand grows

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Data centre construction rules

Highlights

New York enacts a one-year moratorium on new data centres over 50 MW, halting permits as officials assess environmental impact standards.
Netherlands extends Amsterdam's ban on new or expanded data centres in the municipality until at least 2030, while hyperscale facilities remain restricted to two national locations.
Denmark proposes draft legislation granting new data centres the lowest grid connection priority due to power shortages, prioritising essential infrastructure and renewable energy projects.

Restrictions spread across major markets

As reported by Reuters, a widening set of authorities is using moratoriums, executive orders and planning restrictions to slow or reshape data centre expansion tied to rising AI demand.

In Pennsylvania, Governor Josh Shapiro signs an executive order requiring companies building AI data centres to meet environmental and transparency safeguards and secure local community approval. The order takes effect immediately, removes all data centres from the state's Fast Track permit program and bars offices or agencies under Shapiro's jurisdiction from signing non-disclosure agreements with developers.

In New York, Governor Kathy Hochul imposes a one-year construction moratorium on data centres using 50 megawatts or more of power, making it the first U.S. state with a full moratorium. During that period, the Department of Environmental Conservation does not issue new discretionary permits while officials develop standards to assess environmental effects.

Maine does not enact a similar freeze after Governor Janet Mills vetoes bipartisan legislation for an 18-month moratorium on new data centres using more than 20 MW of power. Mills says she supports a moratorium in principle but objects to the bill because it lacks an exception for a specific project in the Town of Jay.

At the local level, residents in Monterey Park, California, vote in June 2026 to permanently ban data centres, becoming the first U.S. city to do so through a ballot measure after backlash over a planned facility.

Power, land and water concerns reshape policy

European authorities are also tightening rules as capacity pressures grow. Amsterdam imposed a one-year moratorium in 2019, and in April 2025 bars new data centres or expansions in the municipality until at least 2030.

More broadly in the Netherlands, the national government's 2022 hyperscale ban limits large facilities to two designated locations. Microsoft still wins approval in January 2026 for a project split into three towers, each individually below the size threshold.

In Ireland, the grid operator effectively blocks new data centre connections around Dublin from 2021 after warning that the facilities are straining the grid. That freeze ends in December 2025, but new connections now need their own on-site power generation.

Australia is preparing rules rather than imposing an immediate ban. Prime Minister Anthony Albanese says the government will create an Office of AI to oversee AI standards, including rules for large data centres covering location, power use and water use, with legislation due early next year.

Denmark's government introduces a draft bill that would give new data centres the lowest priority for power grid connections amid shortages in available capacity. The proposal, backed by a broad cross-party agreement representing 80% of parliament, instead prioritises households, healthcare, industry, transport and renewable energy projects.

Our earlier coverage of Pennsylvania’s new AI data center rules explained how Governor Josh Shapiro’s executive order tightened oversight by requiring environmental and transparency safeguards, local community approval, and banning NDAs between state agencies and developers. We also noted that the move pulls data centers out of the Fast Track permit program and reflects broader public resistance tied to electricity, water use, and other local impacts, even as major investment interest in the state remains strong.

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