Federal regulators allow on-site generators at data centers to operate with fewer emissions checks, raising health and environmental-compliance concerns.

Federal regulatory changes affecting enforcement of on-site backup generator emissions are contributing to increased data center health risks, according to a new report.

Air pollution from data centers could increase healthcare costs by almost $21 billion by 2028, driving roughly 600,000 asthma cases and 1,300 premature deaths, according to the Environmental Protection Network, a nonprofit whose members are former public officials focused on environmental policy. While much of this health burden stems from broader regulatory shifts that help utilities meet data center energy demand—such as expanding coal use and delaying plant retirements—a significant portion traces to regulatory changes permitting on-site backup power generation.

"These engines and turbines can emit nitrogen oxides, smog-forming volatile organic compounds, and soot pollution," the report states. "The combined generating capacity of a large generator or turbine fleet can rival that of a conventional power plant."

Virginia provides a cautionary example. If on-site generators emit just 10 percent of their permitted air-pollution levels, the state would see approximately 14,000 asthma symptom cases annually, 13 to 19 premature deaths, and $220 million to $300 million in public-health costs.

Three regulatory actions are particularly enabling this risk. The EPA finalized a rule creating a category of small and medium temporary turbines that can remain on-site for up to two years with substantially reduced monitoring, recordkeeping and reporting requirements. This change is expected to release 89 percent more nitrogen oxide annually than a more restrictive 2024 version. An EPA interpretive letter released last year permits operators to use on-site emergency backup generators in utility demand-response programs. Additionally, the Department of Energy issued an emergency order in May authorizing the PJM Interconnection to deploy backup generation at data centers and other facilities during grid stress. The report notes that such use during heat waves and peak demand adds smog-forming pollution precisely when extreme heat already places populations at greater risk.

The xAI data center in Southaven, Mississippi illustrates the permitting ambiguity: a lawsuit is contesting whether appropriate permits were obtained for temporary or mobile on-site turbines providing backup power.

Overall, the Environmental Protection Network identified 30 federal regulatory actions that risk increasing pollution from data centers, many easing rules on utilities and non-utility power plants alike. The report concludes that before 2025, stronger pollution safeguards and planned fossil-plant retirements were on track to constrain additional emissions, but current federal policies are making it easier to keep more-polluting power sources online while weakening many protections.