Brownfield Cleanup Programs and Liability Protections for Data Center Sites

Former power plants, mills and industrial parks attract data center developers because they often come with high-voltage service, water, heavy roads and industrial zoning. A 2024 Pacific Northwest National Laboratory pamphlet on converting coal sites to data centers notes that many states run voluntary cleanup programs with flexible cleanup standards to speed remediation for brownfield purchasers.¹⁰ The trade-offs are covered in our greenfield vs. brownfield comparison and our guide to repurposing retired power plant and industrial sites.

The legal starting point is that the federal Superfund law, CERCLA, can make a current owner or operator liable for cleanup costs at a contaminated property even if it did not cause the contamination. The protections in this guide exist to break that link for buyers and tenants who investigate first and behave responsibly afterward. EPA describes the BFPP provision as allowing a party to purchase property with knowledge of contamination after performing All Appropriate Inquiries, and still be protected, if it meets the statutory criteria.⁶

The protections are layered and not interchangeable. The BFPP defense addresses federal CERCLA owner liability. State programs address state cleanup liability. Neither covers everything: EPA’s guidance is an exercise of its enforcement discretion and does not address liability under state law, claims by other federal agencies, or private-party claims.¹ A deal on brownfield land needs all three questions answered before the due diligence period ends.

Congress created the BFPP defense in the 2002 Brownfields Amendments, and EPA’s 2019 “Common Elements” guidance explains how EPA reads the criteria shared by BFPPs, contiguous property owners and innocent landowners.¹ The criteria split into threshold requirements, which must be met at closing, and continuing obligations, which last as long as the party owns or operates the property.

Two features catch buyers off guard. First, a BFPP can still face a windfall lien where EPA has spent unrecovered money cleaning up the site; the lien is capped at the lesser of EPA’s unrecovered costs or the increase in fair market value attributable to the cleanup.¹ Second, the continuing obligations apply during construction. A data hall program that cuts into capped soil, dewaters contaminated groundwater or relocates fill without a plan can undermine the defense the buyer worked to establish.

The 2018 BUILD Act amended the BFPP definition to cover tenants directly. EPA describes three paths: the owner is a BFPP; the owner was a BFPP but lost that status through no fault of the tenant; or the tenant independently meets the BFPP criteria.⁶ Developers that prefer to lease rather than buy should still confirm that the lease terms and their own inquiries satisfy the statute.

All Appropriate Inquiries (AAI) is EPA’s rule at 40 CFR Part 312 defining what pre-acquisition investigation is needed. EPA recognized ASTM E1527-21 as satisfying AAI effective February 13, 2023, and stopped recognizing the older E1527-13 standard a year later.⁷ In practice, AAI means a Phase I environmental site assessment completed close to closing.

Timing is where otherwise sound diligence fails. EPA’s fact sheet explains that some parts of the inquiry must be conducted or updated within 180 days before acquisition and the rest within one year.⁸ The 180-day items include interviews, government records review, the site visit and the lien search. Data center land deals often run long option periods while power is studied, so a Phase I commissioned at signing may be stale at closing.

AAI also governs grant-funded work: recipients of EPA brownfield grants must comply with the AAI rule when they use grant funds to assess properties.⁸ When the Phase I identifies recognized environmental conditions, the next step is usually a Phase II environmental site assessment, which turns suspicion into data a cleanup program can act on.

Every state runs some form of voluntary cleanup or brownfield program. The details differ, but the bargain is similar: the applicant investigates and cleans up to standards the state approves, often risk-based standards tied to the planned use, and the state issues a no further action letter, certificate of completion or covenant not to sue.

Federal law gives these programs weight. Under CERCLA section 128(b), EPA’s enforcement under sections 106(a) and 107(a) is generally limited at eligible response sites addressed in compliance with a state response program, subject to specific exceptions, and the state must maintain a public record of sites and their use restrictions.²

Two examples show the range. In Texas, a party enters the program with a $1,000 application fee and at least a Phase I, and once the certificate of completion issues, non-responsible parties, including future lenders and landowners, are released from liability to the state for cleanup of the covered area.³ In Indiana, a certificate of completion is paired with a covenant not to sue from the governor, which by statute does not release liability to the federal government under federal law.¹¹ Check the program in your state for fees, standards, review times and how use restrictions are recorded.

EPA’s program offers multipurpose, assessment, revolving loan fund and cleanup grants.⁴ Cleanup grants require a 20 percent cost share, and the applicant must own the site.¹² A private data center developer is therefore rarely the direct applicant. The usual route is a partnership in which a county, city, redevelopment authority or nonprofit holds the grant, or a loan from a revolving loan fund.

The 2021 infrastructure law temporarily enlarged the program. Haley & Aldrich reported that the FY 2026 competition offered up to 26 large cleanup grants of up to $4 million each, likely the last round of such large awards, with infrastructure law funds required to be obligated by September 30, 2026.¹³

The National Association of Counties warned that, without congressional action, the program would run out of funding on September 30, 2026.⁹ In a July 2026 report, the Congressional Research Service counted three reauthorization bills in the 119th Congress: H.R. 6432, H.R. 8739 and S. 347.⁵ Smart Growth America described the effort as highly partisan, with H.R. 8739 proposing $123.5 million a year, below the current $200 million authorization.¹⁴ A House Energy and Commerce subcommittee advanced H.R. 8739 by voice vote as a compromise that would fund the grants through fiscal 2031.¹⁶ Haley & Aldrich noted that regular appropriations averaged about $160 million a year over the prior decade.¹³ With the September 30, 2026 deadline now past, confirm the program’s current funding status with EPA’s regional brownfields office before counting on a grant.

Retired power plant sites show how the pieces fit. The former Cheswick Generating Station in Springdale, Pennsylvania, retired in 2022, was remediated by its owner before a data center developer bought the 47.2-acre site for $14.3 million in November 2025.¹⁵ When the seller finishes cleanup before closing, the buyer’s questions shift from “how much will cleanup cost” to “what controls remain and what do they allow.”

Where cleanup is not finished, the structure matters more. Common approaches include:

• Seller completes cleanup and obtains the state certificate before closing, with the price reflecting the delay.
• Buyer enters the state program itself, using its own Phase II data, and takes the cost into the price.
• Seller retains liability through an indemnity backed by escrow, insurance or a creditworthy parent.
• A public partner holds an EPA grant for assessment or cleanup on land it owns or controls, then transfers or leases it.

Federal and state incentives can also help. PNNL notes that brownfields in Opportunity Zones or similar state-designated areas may qualify for financial incentives.¹⁰ Brownfield tax credits are state-specific, so confirm them with the state agency and a tax adviser, and see our guide to data center tax incentives.

1. 01Pull the state regulatory file: prior investigations, orders, certificates and recorded controls.
2. 02Commission a Phase I under ASTM E1527-21 and plan to update it within 180 days of closing.⁸⁷
3. 03Confirm you are not affiliated with any liable party, including through financing or the seller’s affiliates.¹
4. 04Scope a Phase II for each recognized environmental condition before price and layout are final.
5. 05Decide who enters the state program and who holds the certificate.
6. 06Write a soil and groundwater management plan for construction so that grading does not breach continuing obligations.

Our due diligence checklist places these steps among power, water and zoning work, and our methodology explains how we weigh them in a screen. If you are weighing a former industrial parcel, you can get a site reviewed before committing to environmental fieldwork. Confirm the liability structure with environmental counsel.