UK councils are pushing for a pause on data center development amid significant environmental and energy concerns.

Australia's federal and state governments should enact moratoriums on data centre development until Canberra implements national standards for digital infrastructure, according to testimony from Sydney and Melbourne councils at a Senate committee hearing on Tuesday.

Rochelle Flood, deputy mayor of Lane Cove Council in Sydney's north, cited "significant concerns" about accelerating data centre development and stated that the current planning system is "ill-equipped" to ensure hyperscale infrastructure is built away from residential and environmental areas. Lane Cove Council has formally objected to a Goodman Group proposal known as Project Mars, which would place an electrical substation approximately 16 metres from low-density residential housing and 160 metres from a local primary school. The facility would also back onto bushland, adjoin Lane Cove River, and overshadow a local community nursery. Flood said Goodman had "refused to engage with the community in any meaningful way."

"Without a moratorium, communities and our environment will be left dealing with the impact of poorly planned data centres for years to come," Flood said.

While some councils acknowledged data centres' economic potential, most expressed concerns about energy and water consumption, noise generation, workforce impacts, environmental effects, and inadequate community consultation from developers.

Ben McGilp, Goodman's general manager of development, claimed the company had undertaken "informative" and "intensive" discussions with local residents, though he conceded the facility would be "very close" to nearby homes—stating the distance as 20 metres, compared to Goodman's prior public claim of around 50 metres. Liberal Senator Sarah Henderson responded sharply, calling the proposal "wholly unreasonable and frankly grossly irresponsible" and requesting Goodman formally withdraw it. McGilp said Goodman expects to make "some form of design change" and will decide by year-end what to do with the development.

Heather Champion from Wingecarribee Shire Council in the NSW Southern Highlands warned that without action, "Ten years from now, we don't want to look back and realise that we got this wrong because governments failed to act with the urgency that this moment demands." On Wednesday, Victoria's Maribyrnong City Council, Hume City Council, Brimbank City Council, and Melton City Council all called for moratoriums until federal regulations are in place. Maribyrnong's mayor, Mohamed Semra, said: "The technology is moving quickly – our planning framework needs to catch up. We can support Australia's digital future without asking the same communities to continually absorb the cost of that growth."

Several councils recommended that the federal government mandate significant buffer zones between data centres and residential housing. Last week's government consultation paper raised the possibility of a "mandatory minimum distance" from homes and schools, with national data centre rules expected in 2027. Tom MacKellar, vice president of origination and market expansion at AirTrunk, told the committee that Victoria's proposed 150-metre buffer requirement "feels appropriate" to his company, noting that all of AirTrunk's existing and planned Australian data centres are more than 500 metres from residential areas.

Councils also urged the government to make its national rules retrospective, applying to both planned and existing developments. Tanya Taylor, mayor of Willoughby Council and president of the Northern Sydney Regional Organisation of Councils, said, "We're worried about the approvals that have been given already, and they're not going to need to abide by any of the new rules." The parliamentary inquiry is scheduled to table its final report on 16 November.