Why PFAS Is Entering the Data Center Development Debate
Public opposition to data center development has been building, with residents, local advocacy groups and national environmental organizations raising concerns about electricity prices, strained power grids, and water resources. As the 2026 midterms approach, opponents have introduced another risk into the debate: per- and polyfluoroalkyl substances (PFAS), often called forever chemicals.[1]
PFAS and data center development are each flashpoints for public concern. Together, they drive heightened scrutiny. Data center developers, operators, and investors should prepare now for project opponents, regulators, and legislators to use PFAS concerns to influence how projects are permitted, litigated and investigated.
What Are PFAS and Where Are They Used in AI Infrastructure
PFAS are a family of thousands of man-made chemicals built on strong carbon-fluorine bonds. These bonds make PFAS useful across industries, but also allow the chemicals to persist in the environment. PFAS remain the subject of nationwide tort and product liability litigation, expanded remediation efforts under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and significant regulatory enforcement activity.
Among their many commercial applications, PFAS are present in technology that supports artificial intelligence infrastructure. Semiconductor manufacturing, which produces chips that power AI servers, relies on PFAS compounds at multiple stages because of their chemical stability and resistance to heat and corrosion. The push to reduce data center water use also has accelerated the adoption of closed-loop and immersion cooling systems, many of which are designed to use PFAS-based fluids and gases for cooling. A growing number of environmental advocates and data center opponents contend that rising demand for computing capacity will increase PFAS production and releases into air, water, and soil. One advocacy group summarized that view succinctly: “More Data Centers = More Toxic PFAS.”[2]
What Data Center Developers Need to Know About PFAS-Driven Legal Risks
The emerging intersection of PFAS concerns and data center opposition adds fuel to the growing use of environmental laws in an effort to constrain the buildout of digital infrastructure. In several states, environmental and civil rights groups already have brought citizen-suit enforcement actions under the federal Clean Air Act and Clean Water Act. State agencies are also increasing environmental compliance oversight,[3] and several states have adopted or are considering “responsible” data center development frameworks, including new environmental review and permitting requirements.
Adding PFAS to this mix is likely to shift some attention from water use to alleged water pollution, implicating entirely separate state regulatory regimes designed to address PFAS and protect public drinking water supplies. In fact, some states that are most active in data center development also are among the most advanced in regulating PFAS, including Virginia, Illinois and North Carolina. Virginia, for example, has adopted a law requiring increased monitoring and disclosure of PFAS discharges across a range of industrial sectors. The Virginia Department of Environmental Quality also recently acknowledged public concerns about potential PFAS discharges from a data center by including a unique reopener that would allow the permit to be revised to incorporate future PFAS-related terms.
The practical question for developers is what are the legal risks if PFAS is detected at, or alleged to be associated with, a project? Potential consequences include citizen-suit enforcement actions alleging unpermitted PFAS discharges, investigations by state regulatory agencies, and the imposition of permit conditions requiring ongoing PFAS monitoring.
Developers also should prepare for heightened congressional scrutiny, particularly if Democrats retake control of the House after the midterm elections. Rep. Frank Pallone, D-N.J., ranking member of the House Energy and Commerce Committee, is active on both PFAS and data center issues. In June 2026, he supported a nationwide moratorium on data center development, citing in part concerns about PFAS components used in data centers. In July 2026, he stated that, if he becomes committee chair, he will pursue “federal guardrails” on data center development through tools that include environmental regulation. Rep. Pallone already has launched inquiries as ranking member. In July, he requested information from xAI Chief Executive Officer Elon Musk about air emissions and monitoring, water use, and water contamination.[4]
Congressional interest is not limited to oversight letters. A bipartisan transparency bill, H.R. 6984, would require public disclosure of, among other metrics, “the type and amount of pollutants . . . discharged into water by data centers. . ." The bill has gained bipartisan cosponsors, and a bipartisan Senate companion bill, S. 5640, also has been introduced.
As PFAS scrutiny expands, data center developers, operators and investors should assess potential PFAS uses and releases early, evaluate permitting and monitoring exposure, and prepare for increased regulatory, legislative and citizen-suit attention. Sheppard will continue to monitor these developments.
FOOTNOTES
[1] See, e.g., Tom Cassauwers, Data Centers Have a PFAS Problem, Sierra Club (May 5, 2026), https://www.sierraclub.org/sierra/data-centers-have-pfas-problem; Rachel Frazin, Data Centers, Drawing Concerns Over Water and Power, May Have Another Surprise Impact: Forever Chemicals, The Hill (Sept. 18, 2026, 12:43 PM), https://thehill.com/policy/energy-environment/6098173-ai-data-centers-forever-chemicals-pfas-water-power/; Joshua Hong, Data Centers Are Swapping Water for Forever Chemicals to Keep AI Cool, Fortune (Sept. 18, 2026, 3:00 AM), https://fortune.com/2026/09/18/data-centers-ai-compute-pfas-forever-chemicals-water.
[2] Oakley Shelton-Thomas, More Data Centers = More Toxic PFAS, Food & Water Watch (Aug. 4, 2026), https://www.foodandwaterwatch.org/news/2026/08/04/more-data-centers-more-toxic-pfas/.
[3] See, e.g., New Jersey Department of Environmental Protection’s imposition of a “record” $1 million fine due to Air Pollution Control Act violations associated with installing and operating natural-gas power generators without required permits: https://dep.nj.gov/newsrel/26_0044/.
[4] Pallone plots data center crackdown - E&E News by POLITICO