Data center boom meets fast-tracked chemicals, regulators rush while critics warn of looming pollution, hidden risks, and shocking new consequences…

The Environmental Protection Agency has begun fast-tracking the reviews of new chemicals tied to data center projects, a change that critics warn could speed the arrival of new kinds of “forever chemicals” on the market with less scrutiny than usual.

The policy is one part of a broader deregulatory push by the Trump administration aimed at accelerating the construction of computing infrastructure. In recent months that push has included rolling back certain clean-water protections and opening federal lands to coal extraction. Now chemical regulation is receiving similar attention: in September the EPA announced it would prioritize the regulatory review of new chemicals intended for use in data centers or related projects. That move followed several executive orders on artificial intelligence and the release in July of a White House AI Action Plan that drew more than 10,000 public comments, including hundreds from industry stakeholders, and promised what the White House called “a golden age for American manufacturing and technological dominance.”

“I think they want to impose as few restrictions as possible on chemicals,” says Greg Schweer, who led the EPA’s new chemicals management branch from 2008 to 2020. “In previous administrations, political people stayed out of [chemical regulation]—they tried to let science win. Here, the industry has a willing set of ears that wants to listen to their opinions.”

The September guidance is part of a wider effort inside the EPA to clear a backlog of new-chemical applications that built up after a major reform of the federal review process in 2016. Industry and some lawmakers have complained for years about the queue, and clearing it has become a priority for the Trump administration’s second-term EPA. Senior roles on the initiative have gone to several officials who previously worked as chemical-industry executives, lobbyists, and lawyers.

“We inherited a massive backlog of new chemical reviews from the Biden Administration which is getting in the way of projects as it pertains to data center and artificial intelligence projects,” EPA administrator Lee Zeldin said in a statement. “The Trump EPA wants to get out of the way and help speed up progress on these critical developments, as opposed to gumming up the works.”

Under the new guidance, companies seeking accelerated review must submit paperwork demonstrating that the substance at issue is part of a “qualifying project.” Applications will be prioritized if a company can show the chemical will be used in data centers or in “covered component projects,” a category that includes projects that add at least 100 megawatts to the electric grid or projects that “[protect] national security,” as well as any endeavors deemed relevant by the secretary of defense, the secretary of the interior, the secretary of commerce, or the secretary of energy.

In response to questions about the program, the EPA emphasized that the technical steps of review would remain in place. “No part of the new chemicals review process will be skipped or bypassed for chemicals that meet the criteria for data center or covered component projects,” agency press secretary Brigit Hirsch said in an email. “The new chemical review process will be the same for these chemicals as it is for all other new chemical submissions, upholding the same high level of scientific integrity and maintaining the same thresholds for risk determinations.”

Even so, former agency reviewers and outside experts argue the policy creates back doors industry could exploit. “There are some really big loopholes in here to get chemicals through,” Schweer says. “If you’ve got some friend at the Department of Defense or the Department of Commerce, all you have to do is get that person to send a letter saying, ‘This is a qualifying project.’ There’s no proof involved.” He also warns that political pressure to accelerate approvals can encourage sloppy review. “If you have to do things quickly, you look for shortcuts, and you don’t always have time to look at all the data very well.”

People who design and run data centers say the facilities themselves are not necessarily a hotbed for novel chemical use. Walter Leclerc, an independent health and safety consultant who works with the data center industry, notes that most compounds found in these facilities—lubricants, fire suppressants, and water-treatment chemicals—are common to many industrial settings. Those materials, Leclerc says, “are no different from [what’s used in] Suzie and John’s industrial business.”

Yet there is one area where newer chemistries are likely to be important: cooling. Keeping servers and other equipment cool is a major operational cost for data centers, and immersion cooling—submerging hardware in a nonconductive liquid—is gaining attention as a way to reduce power consumption. A variant called two-phase immersion cooling relies on a fluid that boils into gas when heated, then condenses on a coil and returns to liquid form, enabling heat removal without as many fans or pumps.

These systems can dramatically cut the energy needed for cooling, and demand for specialized cooling fluids has surged as operators look for savings. Big oil and chemical firms such as Exxon and Shell have entered the market for specialty cooling liquids.

“Immersion cooling is the best,” Leclerc says. “The problem is it’s got all the environmental effects.”

The fluids used in some two-phase immersion formulations are rich in fluorine and carbon, which is the backbone of many per- and polyfluoroalkyl substances, or PFAS. Often called “forever chemicals” because they persist in the environment, PFAS have been associated with a range of health concerns, including increased risk of certain cancers, reproductive problems, and immune-system suppression. Regulators abroad and in several U.S. states have been moving to curb or ban broad classes of PFAS; the European Union has signaled it may pursue a particularly stringent restriction. The Trump administration has declared PFAS regulation a priority even as it has rolled back several Biden-era rules affecting some of these compounds.

Corporate experience has shown the legal and financial risks tied to PFAS. Producers such as 3M have faced costly litigation and settlements; 3M has pledged to discontinue manufacturing and using PFAS this year. That history has made large tech companies and chemical suppliers cautious about embracing PFAS-based cooling systems.

Academic research has also flagged regulatory uncertainty as a potential obstacle. A study released in April coauthored by Microsoft researchers on the life-cycle impacts of different data center cooling approaches noted that “emerging PFAS regulations in the European Union and the United States” could “restrict” the use of two-phase immersion cooling. Although Microsoft has previously explored two-phase immersion technology and ran a pilot project at a data center in Washington, the company told reporters that it “is not currently using immersion cooling technologies in [its] data center operations.” Firms that market alternate cooling liquids often advertise them as “PFAS-free.”

Still, some chemical manufacturers have been moving ahead with products designed for two-phase systems. Chemours, a large fluorochemical company spun off from DuPont in 2015, has developed fluids containing fluoride, hydrogen, and carbon that can fall within the PFAS family. The company worked with Samsung to test one of these liquids and in August said that “testing for subsequent generations will begin in the months ahead.” Chemours highlights in sustainability materials that these fluids could help reduce the energy needed to cool data centers by up to 90 percent.

Chemours has also lobbied for regulatory changes that would speed adoption of new technologies. In public comments on the AI Action Plan, the company urged reforms to the EPA’s new-chemicals program so the country could “swiftly adopt new technologies that can drive [the US’s] competitiveness globally.” In a 2023 press release the company said the two-phase cooling liquids were on track to hit the market this year, “pending appropriate regulatory approvals.”

The company has a checkered legal history related to PFAS. Chemours, DuPont, and other firms have paid hundreds of millions of dollars in settlements over PFAS pollution and remain defendants in numerous suits brought by cities, counties, and states. When asked whether Chemours planned to seek fast-tracked review for its cooling fluids under the EPA’s new data center policy, Chemours spokesperson Cassie Olszewski said the company is “in the process of commercializing our two-phase immersion cooling fluid, which will require relevant regulatory approvals.”

“Our work in this area has been focused on developing more sustainable and efficient cooling solutions that would allow data centers to consume less energy, water, and footprint while effectively managing the increasing amount of heat generated by the next generation of chips with higher processing power,” Olszewski said.

Chips themselves could open another pathway for new chemical approvals. Both Schweer and Jonathan Kalmuss-Katz, a lawyer at environmental nonprofit Earthjustice, say the semiconductor industry—which makes the processors used in data centers—relies on specialized chemistries at several stages of manufacturing. Photolithography, a step that uses light to etch microscopic patterns onto silicon wafers, is one point where PFAS and related compounds are commonly used.

Schweer says that in the final years of his EPA tenure the semiconductor sector filed a high volume of applications for new substances. Jonathan Kalmuss-Katz, who tracks pollution and chemical policy, adds that semiconductor manufacturers “are a main driver of new chemicals.”

“The administration has this kind of AI-at-all-costs mindset, where you’re rushing to build more and more data centers and chip fabs without any meaningful plan for dealing with their climate impacts, their natural resource impacts, and the toxic substances that are being used and released from these new facilities,” he says.

Lobbying activity underscores that industry is closely watching the new-chemicals program. In March Nancy Beck, who previously served as a policy director for a chemical-industry lobbying group and now heads the Office of Chemical Safety and Pollution Prevention at the EPA, met with representatives from SEMI, a global semiconductor industry organization, to discuss what the emails describe as the “EPA’s approach to regulations on PFAS and other chemicals that are essential to semiconductor manufacturing.” Those emails, obtained under the Freedom of Information Act, also show Beck suggesting the group follow up with a public comment in support of changes to the review process. “The Trump EPA encourages stakeholders to submit and document their comments on proposed rules so that we get a diverse array of perspectives,” says Hirsch, the EPA spokesperson.

In its follow-up letter SEMI framed the issue as strategic for national competitiveness. “Making the United States the global capital of artificial intelligence (Al) … will depend on the country’s ability to significantly expand domestic production of semiconductors and reshore large portions of the semiconductor manufacturing supply chain,” the letter reads. “This can only be realized through a regulatory approach that effectively balances risk-based controls with ensuring access to chemicals that are vital to the production of semiconductors.” SEMI declined to comment for this reporting.

Critics warn the data-center priority could be used to push many kinds of new chemicals to the front of the queue, not just those that will actually be deployed inside server rooms. The AI executive orders and the EPA guidance tie expedited reviews to a broad category of projects and components, and experts say companies could link proposed substances to qualifying projects to gain faster consideration.

“If [a company has] planned a data center, they’re not gonna be waiting around for a new chemical to be approved by the agency,” Schweer says. “They should have everything they need ready to go. That doesn’t mean that somebody won’t use [the new policy] as an excuse to try to get some chemical through.”

Both Leclerc and Schweer say they support modernizing the new-chemicals review system and clearing the backlog that has slowed approvals for years. But they also say the new data-center priority raises red flags about long-term safety oversight.

Making it quicker and easier for chemicals to go through the EPA is “a pro-growth move,” Leclerc says. “But there’s definitely long-term safety implications.”