NEPA Review for Data Centers: When It Applies and What Changed in 2025

The National Environmental Policy Act (NEPA) requires federal agencies to consider the environmental effects of their proposed actions before they decide.¹ It is a procedural law: it requires the agency to look and to disclose, but it does not by itself prohibit a project or set environmental standards. The substantive limits come from other laws, such as the Clean Water Act, the Endangered Species Act and the National Historic Preservation Act, which often run in parallel with the NEPA document.

For data center sites, the practical point is that NEPA attaches to a federal decision, not to the private project as such. A county rezoning, a state air permit or a utility service agreement with an investor-owned utility does not trigger NEPA on its own. What triggers it is a federal agency deciding something: issuing a permit, leasing federal land, lending money, or building federal infrastructure that serves the site. See the glossary entry for NEPA for a short definition.

Since the 2023 amendments, the statute defines a “major Federal action” as one the agency determines is subject to substantial federal control and responsibility, and it excludes certain loans and other federal credit support where the agency lacks sufficient control over how the money is used.² That narrowing matters for projects that rely on limited federal financing.

Most data center projects that go through NEPA do so because one piece of the project, often not the building, needs a federal approval. Map these early, because each one brings its own agency, schedule and procedures.

The most frequent hook is a Section 404 permit for filling wetlands or streams, covered in the wetlands guide. The Corps reissued its nationwide permits effective March 15, 2026, with final decision documents for each permit, so a project that fits a nationwide permit generally relies on that program-level analysis rather than a new site-specific document.⁸ A project that needs an individual permit gets its own environmental review, and the question of how much of the larger campus that review covers has been litigated for decades.

Utility work is the hook that surprises people. In the Tennessee Valley, for example, TVA prepares its own environmental assessments for new 500 kV and 161 kV substations and lines, such as the Hampton Station 500-kV substation, whose final EA and FONSI were issued in October 2025 and revised in January 2026 after additional wetland features were found.⁶ The data center may not be the federal action, but the power supply that serves it can be.

Once a federal action exists, the agency decides how much analysis it needs. There are three levels, and the choice drives most of the schedule.

A categorical exclusion (CE) covers classes of action that an agency has found normally do not have significant effects, listed in that agency’s NEPA procedures. An environmental assessment (EA) is a shorter analysis that ends either in a Finding of No Significant Impact (FONSI) or a decision to prepare an environmental impact statement (EIS), the most detailed level of review.¹ As a general pattern, a federal action that avoids wetlands, listed species habitat and historic properties is more likely to stay at the CE or EA level.

The 2023 amendments also let an agency adopt another agency’s categorical exclusion, which widens the menu of exclusions an agency can use.⁹ The 2025 data center executive order leans on this, directing agencies to identify existing exclusions that could cover data center work and to develop new ones.⁵

The Fiscal Responsibility Act of 2023 made the first substantial amendments to NEPA in decades.⁹ It added firm targets that used to exist only in regulation or guidance.³

The amendments also let a project sponsor petition a court if an agency misses a deadline.³ In July 2025, the One Big Beautiful Bill Act added Section 112 to NEPA, which lets a sponsor pay a fee of 125% of the anticipated cost of preparing the document in exchange for an EA completed in 180 days or an EIS in one year.¹⁰ For a schedule-driven data center, that option is worth asking about, but it only helps once the agency has defined the federal action and the scope of review.

Two cautions apply. First, the clock starts at defined points, such as the agency’s decision that an EA or EIS is needed or the issuance of a notice of intent, so the months spent assembling an application and agreeing on the federal action sit outside it.³ Second, the deadlines govern the NEPA document, not the parallel permits and consultations that ride with it, such as a Section 404 permit, Endangered Species Act consultation or a Section 106 review. Those have their own rules and can control the schedule even when the NEPA document is on time.

Three developments reshaped NEPA practice in a short span.

CEQ’s regulations were withdrawn

For decades, the Council on Environmental Quality’s regulations set common rules for all agencies. After Executive Order 14154 and a 2024 appeals court decision questioning CEQ’s authority, CEQ issued an interim final rule in February 2025 rescinding those regulations, effective April 11, 2025.⁷ CEQ finalized the rescission without change on January 8, 2026.⁴ Each agency now applies its own NEPA procedures. CEQ’s September 29, 2025 guidance and template, which are not binding, were issued to help agencies revise them, and agencies follow their existing procedures while they do.¹¹ In practice, this means the rules for a Corps permit, a DOE lease and a TVA substation can now differ more than they used to.

The Supreme Court narrowed the scope of review

In Seven County Infrastructure Coalition v. Eagle County (May 29, 2025), the Supreme Court held that courts owe agencies substantial deference on NEPA scope and that agencies need not study the effects of separate projects that the proposed action might lead to.¹² For data centers, that supports reviews focused on the federal action in front of the agency, such as a substation or a wetland fill, rather than every downstream effect.

A data center permitting executive order

Executive Order 14318 (July 23, 2025) targets “Qualifying Projects,” which include data center projects with more than 100 MW of new load or at least $500 million in committed capital expenditure.⁵ It directs agencies to identify and create categorical exclusions, to use FAST-41 coordination for qualifying projects, and to treat federal financial assistance below 50% of project cost as presumptively not a major federal action.⁵ An executive order directs agencies; it does not change the statute, so confirm how the specific agency is applying it.

Data centers on federal land are the clearest NEPA case, because the land transaction itself is a federal action. On July 24, 2025, DOE selected Idaho National Laboratory, Oak Ridge Reservation, the Paducah Gaseous Diffusion Plant and the Savannah River Site for private AI data center and energy projects.¹³ Projects on those sites should expect the land agency’s NEPA review, plus whatever other federal reviews the site’s history brings, such as cultural resources or legacy contamination.

That does not make federal land slow by definition. DOE described the sites as suited to host both data centers and new power generation, and said the 3,500-acre Paducah site could support up to 3 GW.¹³ The federal land guide covers solicitations and lease structures.

The same logic applies to smaller federal parcels inside a private site, such as a federal easement, a strip of Bureau of Land Management land along a utility corridor, or a road crossing on federal property. A small federal piece can make the federal agency’s decision a necessary step for the whole campus, so find these in the title and survey work rather than after the layout is fixed. The title and ALTA survey guide covers how they show up.

1. 01List every federal touchpoint: wetlands and streams, federal land in the site or corridors, federal funding or loans, federal utility facilities, and any FERC- or NRC-licensed facility tied to the project.
2. 02Ask whether the project can avoid the hook, for example by laying out the campus to fit a nationwide permit instead of an individual permit.
3. 03For each remaining hook, identify the lead agency and read that agency’s current NEPA procedures; they now differ more than before.⁴
4. 04Estimate the likely level of review and the parallel consultations (Section 106, ESA Section 7) that ride with it.
5. 05Map the review against the deal and power schedule, including the statutory deadlines and the Section 112 fee option where it applies.¹⁰

NEPA sits inside a wider permitting process and connects closely to endangered species review and cultural resources. If you want a read on which federal hooks a specific parcel carries, you can get a site reviewed.