| STATE POLICY TOOLKITS FOR DATA CENTER REGULATION | Greenhouse Gas Emissions |
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About This Toolkit
Published: September 2, 2026
As data centers rapidly expand across the country, they are driving significant demand for fossil-fired generation and the associated greenhouse gas emissions. State governments are looking for new tools to ensure data center growth doesn’t undermine their climate goals. This toolkit draws on Climate XChange’s review of over 400 data center bills introduced in 2025 and 2026 legislative sessions.
This resource, co-authored with experts from the World Resources Institute’s Polsky Center for the Global Energy Transition, represents one of five installments in Climate XChange’s State Policy Toolkits for Data Center Regulation, which will be released throughout 2026. This document tackles the tools that states can use to address and mitigate the impacts that data centers have on greenhouse gas emissions. It should be considered alongside other toolkits describing state policies addressing data center impacts on water resources, electricity affordability and reliability, tax and employment justice, and transparency concerns.
The Issue
Data centers are the leading driver of electric load growth in the United States, and without smart policy interventions, are on track to drive a corresponding increase in greenhouse gas emissions (GHGs). National estimates of data center load suggest that it could increase sixfold from 2025 levels by 2035, hitting 194 gigawatts (GW), and carbon emissions from U.S. data centers could see a proportionate rise. These emissions impacts will only be felt if data centers are powered by polluting generators. Current trends suggest that this is likely to be the case without intervention: more new natural gas plants have been proposed just to serve data centers today than existed in the entire nationwide natural gas queue only two years ago.
The Toolkit
States have direct jurisdiction over the retail energy system, and a variety of siting and permitting tools that can require or incentivize data centers to support clean energy. This includes reducing demand for new fossil fired generation, locating projects where there are opportunities for efficiency or renewable investment, minimizing emissions from on-site generators, and simply imposing requirements to run on renewable energy.
Legislative Highlights
- Oregon HB 3546 (2025, enacted): Requires that when regulators approve tariffs for data customers, they must consider whether the tariff will “impede the electric company’s ability to meet the clean energy targets set forth in ORS 469A.410 or reduce the emissions of greenhouse gases consistent with state policy.”
- Illinois SB 4016 (2026, proposed): Would require all hyperscale data centers to demonstrate plans to power themselves using new, grid-deliverable clean energy capacity developed or contracted for by the data center company. If the data center does not provide all of its own energy from clean sources, it must make the remaining energy demand available for curtailment in cases of emergency.
- Colorado SB 26-102 (2026, proposed): Would have required large-load data centers to maximize reliance on renewable and storage resources “to the extent technically and economically feasible” for on-site backup power, and only rely on combustion-based backup generation after evaluating and deploying alternatives to the maximum extent.
Further Reading
For more information on data centers’ greenhouse gas impacts and policy tools to address them, explore the below resources from other organizations:
- Rewiring America | Homegrown Energy: Household upgrades could offset all new projected data center energy demand
- Rhodium Group | The Potential for Geothermal Energy to Meet Growing Data Center Electricity Demand
- RMI | How “Power Couples” Can Help the United States Win the Global AI Race
- David Gardiner and Associates | Data Center Heat Reuse: The Opportunity for States
Note: With the rapid buildout of data centers across the country, states must have strong policies to prevent their negative impacts on the environment, climate, energy systems, and local communities. Climate XChange’s policy toolkits, educational programming, and technical assistance are solely focused on addressing these impacts. Our organization is not involved in advocacy, nor does it have the expertise to assess the broader societal and economic effects of widespread artificial intelligence adoption in the United States.