Australia’s backdown on data centres allows them to use energy from coal and gas.

Enforcement is key

However, these carve-outs must not compromise the government's goals of lowering climate emissions and ensuring that energy remains affordable.

That is why enforcement matters. Consider New South Wales, for example, whose new policy framework is built on six key principles. These include strong environmental and efficiency standards and no net costs to consumers and communities.

Developers wanting to build data centres that meet these requirements can get a faster 75-day assessment of their planning application. Non-compliant proposals are not automatically rejected, but do lose access to this fast-tracked process and can be modified, approved with conditions, or simply refused.

To properly enforce our new standards, Australia must learn from other regions.

The European Union requires major data centres to report their energy and water use. It is also developing a ratings system to compare how efficient each centre is, alongside minimum standards for energy consumption and water use.

In Ireland, the government considers various factors – including grid demand and broader renewable energy goals – when assessing new data centre proposals.

Ensuring communities benefit

Australia, like many countries, is racing to regulate its rapidly expanding data centre sector.

To do so, we can draw on international approaches that mandate clear approval processes and public reporting.

We must also engage communities throughout the development process, starting with early consultation. This will ensure data centre projects offer concrete benefits, such as shared energy infrastructure and structured apprenticeships, not just increased capacity.

We need more research about how data centres affect water supplies, peak power prices, noise levels and emissions. Importantly, studies must use real operating data, not just estimates provided by developers.

The federal government has given states and territories more say in how they power data centres. But strong enforcement is key to ensuring every project keeps energy costs low, protects the environment, and offers lasting benefits for local communities.