On July 23, 2025, President Trump issued Executive Order “Accelerating Federal Permitting of Data Center Infrastructure,” intended to facilitate federal financing and fast-track federal approvals for large-scale AI-focused data centers and related infrastructure. The executive order (EO) is a key component of the administration’s America’s AI Action Plan and significantly reshapes federal environmental and permitting policy for qualifying projects.
The EO has immediate implications for developers, sponsors, lenders, and energy providers involved in data center and related infrastructure development.
Key provisions in data center EO
Targeted scope
The EO applies to “Qualifying Projects,” defined as a data center project or a covered component project (discussed below):
- Where the project sponsor has committed at least $500 million in capital expenditures;
- Involving electric load addition of greater than 100 MW;
- That protects national security; or
- That has been designated as a “qualifying project” by the secretary of defense, the secretary of the interior, the secretary of commerce, or the secretary of energy.
“Covered Component Projects” include power generation (natural gas, coal, nuclear, geothermal), high-voltage transmission, water systems, semiconductor facilities, networking equipment, and data storage equipment.
Financial support
The secretary of commerce, in consultation with other relevant departments and agencies, is instructed to “launch an initiative to provide financial support for Qualifying Projects, which could include loans and loan guarantees, grants, tax incentives, and offtake agreements.” Relevant agencies are directed to identify and submit to the Director of Office of Science and Technology Policy “any such relevant existing financial support that can be used to assist Qualifying Projects, consistent with the protection of national security.”
Regulatory streamlining
The EO also directs applicable federal agencies to:
- Create or expand categorical exclusions (CEs) under the National Environmental Policy Act (NEPA)
- Modify permitting regulations under the Clean Water Act, Clean Air Act, CERCLA, and TSCA
- Explore a new nationwide Clean Water Act Section 404 general permit for qualifying projects.
The executive director of the Federal Permitting Improvement Steering Council (FPISC) is empowered to designate a qualifying project as a “transparency project” under the Fixing America’s Surface Transportation Act (FAST-41) and expedite its transition from a transparency project to a “covered project” under FAST-41. The EO goes as far as to direct the FPISC to consider “all other available options to designate the project a covered project,” even where the qualifying project may not be eligible.
These changes aim to significantly reduce federal permitting timelines and limit discretionary agency delays.
Use of federal lands
The Department of the Interior and the Department of Energy shall, after consultation with industry and the Department of Commerce, are directed to offer appropriate authorizations for use of federal sites for development of qualifying projects, consistent with applicable laws.
The secretary of defense is similarly directed, as and when the secretary deems it necessary or desirable, to identify suitable sites on military installations for covered component infrastructure uses and competitively lease available lands for qualifying projects to support the Department of Defense’s needs.
Energy eligibility restrictions
Only dispatchable energy sources (natural gas, coal, nuclear, and geothermal) are eligible for inclusion in a covered component project under the EO. Wind, solar, and battery storage are excluded.
The EO’s impact on data center projects
The EO potentially has far-reaching consequences for qualifying projects. It is the latest in a series of steps taken by the US administration with the goal of encouraging data center development in the US. It builds on the “Winning the Race: America’s AI Action Plan,” released by the White House on July 23, 2025, which set forth more than 90 federal policy actions and outlined the administration’s approach to securing US “dominance in artificial intelligence.”
Access to federal loans (traditionally at much lower rates than those available in the private market) and grants will no doubt be welcomed by project sponsors, although there is no shortage of data center financing from the private sector.
The streamlined review and permitting processes described in the EO could make a significant contribution to reducing project timelines and the cost of some regulatory compliance. Ultimately, the success of this streamlining initiative will be largely driven by the ability and capacity of the impacted federal agencies to implement these significant changes, while also meeting the other articulated priorities of the administration.