Data Center Development at Brownfields Sites

In 2024, investment in data centers exceeded $455 billion, an increase of 51% compared to 2023. Looking ahead, McKinsey projects that global investment in data centers and supporting infrastructure will approach $7 trillion by 2030, with more than 40% of that amount invested in the United States.

However, data centers are energy intensive and place strain on existing power grids. In the United States, data centers are contributing to blackout risks even as projections indicate that energy demand will increase by 16% to 25% annually. Energy access is already creating a bottleneck as developers are forced to manage the challenges of inadequate power supply and infrastructure. As a result, sites with existing access to transmission lines, as well as to other resources like cooling water, are highly valued when assessing where to build new data centers or energy facilities.

Given these pressures, brownfield sites—previously developed industrial properties that may be contaminated—present promising opportunities for potential data centers and energy facilities. Such sites often come with built-in advantages such as existing structures that can be converted at less cost than it takes for a newbuild construction, access to existing power, water, sewer and transportation infrastructure, as well as proximity to the energy grid. Moreover, redeveloping deteriorating and potentially contaminated properties may garner support from communities and local governments.

However, building new facilities on former industrial sites presents several challenges, including, for contaminated sites, environmental liabilities under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). Under CERCLA, EPA is authorized to compel responsible parties to remediate the site or pay for cleanup costs. Potentially responsible parties, including current owners and operators of a contaminated site, may be held strictly, jointly and severally liable for up to the full costs of remediation even if they did not cause the contamination or had no knowledge that hazardous waste was present.

The so-called “Brownfields Amendments” to CERCLA in 2002 were intended to alleviate the environmental risks for businesses that chose to redevelop and use former brownfields sites by making it easier to assert affirmative defenses to CERCLA liability. Additionally, over the years, the EPA and state agencies, which have their own versions of CERCLA, have made available brownfield grants to facilitate the redevelopment of former industrial sites. The groundwork appears to be laid for further incentives in connection with data center development, as both the federal government and certain states seem to be taking measures to facilitate the repurposing of brownfields sites to support the nation’s burgeoning AI infrastructure.

The Trump Administration’s Actions on the Brownfields Program 
Since taking office, President Trump and his administration have looked to amend the Brownfields Program as part of a broader effort to promote the development of AI data centers and energy facilities. In January, President Trump signed Executive Order 14179 (EO), which called for the creation of a comprehensive action plan to sustain and enhance America’s AI standing. The EO provides that statutes and regulations that stand to stymy the development of data centers would have to be amended, a concept that, on its face, would apply to federal laws that might impose (or alleviate) environmental liabilities upon data center owners and operators.

Released in July, “America’s AI Action Plan” was responsive to comments made by the Data Center Coalition (DCC), which urged the administration to overhaul permitting and “consider the use of federal land, including brownfields, for energy and data center development.” Consistent with DCC’s comments, Pillar II of the report seeks to “create streamlined permitting for data centers” and reduce barriers to project development posed by CERCLA.

The EPA is currently looking to the Brownfields Program as part of its effort to implement the EO. In September 2025, Director Lee Zeldin stated in an op-ed that the EO “promotes using remediated Brownfield and Superfund sites under EPA’s purview for data center development.” These statements are part of a larger deregulatory trend at EPA to Restore American Energy Dominance and make the United States the “artificial intelligence capital of the world.” The EPA is now in the process of developing criteria for the siting of data centers, which, upon release, will reveal more on the issue.

Congressional Action on Brownfields Policy
Concurrent with the Trump administration’s actions, Congress has also indicated support for bolstering the Brownfields Program. In January, the Brownfields Reauthorization Act was introduced to align the program with current construction costs and project sizes by doubling the maximum cleanup grants and increasing state funding. The bill unanimously passed through the Committee on Environment & Public Works, but has not progressed further.

On March 11, the Energy and Commerce Committee held a hearing where representatives expressed interest in streamlining the Brownfields Program to incentivize the development of AI data centers and energy infrastructure. Witnesses advocated for several changes to the program, including an “automatic sign-off process for certified third-party expert site assessments” to avoid prolonged delays, and a matching program for developing brownfields sites in rural areas.

However, congressional and executive interest in reforming the Brownfields Program also comes in the context of the Administration’s desire to slash the EPA’s budget. The EPA did announce $267 million dollars in brownfields grants in May, but those grants are tied to actions taken by the Biden administration. Although the Brownfields Program is constrained by congressional appropriations, EPA does have significant discretion in administering the program, particularly in the context of shaping policy priorities and selecting recipients of competitive grants.

Brownfields Policy at the State Level
Recently, several states have taken action to encourage the redevelopment of brownfields sites under their own environmental programs. For instance, Florida passed CS/HB 733 in June, which increased the flexibility for those redeveloping complex, multiparcel contaminated properties, broadened the eligibility for potential participants in the program and removed certain regulatory requirements to ease administrative burdens. In Connecticut, the legislature recently passed Senate Bill 1404 to expedite the sale and redevelopment of brownfield sites by removing certain environmental investigation obligations and introducing flexible cleanup pathways and allowances for minor contamination.

Looking Ahead
To the extent that data center project proponents look to former industrial sites, the management of potential environmental liabilities will become a priority. This may not be news to seasoned developers experienced in working with former industrial sites, applying for and securing brownfield grants, and conducting transactional due diligence in a way that optimizes the ability to assert affirmative defenses to Superfund liability. However, not all companies engaged in building data centers may have the relevant experience in-house. Although little has occurred at the federal level in the way of statutory or regulatory amendments, the Trump administration has laid the groundwork for the potential use of brownfields incentives to offset concerns related to environmental remedial liabilities, and there appears to be a trickle-down effect at the state level. In any event, the allocation and mitigation of potential environmental liabilities is something that data center developers and operators, as well as their financiers, may wish to consider. Pillsbury has experienced lawyers who can assist clients in all facets of environmental due diligence in connection with project siting, property acquisition and project development.