The lawsuits emerging around data centres are no longer about servers or buildings. They are about water, electricity, carbon budgets and ultimately, who bears the environmental cost of the digital economy. Courts in Chile and Ireland are now redefining the legal limits of AI infrastructure, setting precedents that could reshape how nations allocate critical resources to the digital economy.
Large hyperscale data centres require enormous quantities of electricity, substantial cooling infrastructure and, in many jurisdictions, significant amounts of land and water. Unsurprisingly, these facilities have begun attracting legal challenges that would have been unimaginable five years ago. The question is whether these disputes constitute merely another category of environmental permitting cases or whether they represent the emergence of a distinct field of environmental litigation.
One school of thought argues that data centre litigation is simply an application of established environmental law principles to a new industrial sector. Environmental impact assessment, precaution, cumulative effects analysis and public participation remain the legal foundations; only the regulated activity has changed. This view echoes the position of scholars such as Daniel A. Farber, who has long argued that environmental law evolves primarily by adapting existing doctrines to new technologies.
A more expansive interpretation has emerged from climate litigation scholars. According to Joana Setzer and Catherine Higham of the London School of Economics' Grantham Research Institute, climate litigation increasingly targets the infrastructure enabling carbon-intensive economic systems rather than only direct emitters. Data centres, although not major emitters themselves, induce significant electricity demand, influence grid investment decisions and increasingly shape national decarbonisation pathways. In this view, they represent the next frontier of climate accountability.
An even stronger position is emerging: data centre litigation differs from conventional environmental disputes because courts are no longer assessing merely the environmental impacts of a single project. Instead, they are being asked to evaluate whether digital infrastructure is compatible with broader societal objectives, including national climate targets, electricity system resilience and long-term water security. This reflects the fact that data centres are not only technological facilities but also complex socio-economic-environmental systems embedded in wider questions of digitalisation and sustainability.
Two legal strategies: Chile and Ireland
The Chilean litigation surrounding Google's proposed Cerrillos data centre has become one of the world's most influential examples of climate-conscious environmental review. Originally authorised in 2020, the project encountered opposition because of its planned groundwater extraction for cooling in the water-stressed Santiago aquifer. Google modified the project, proposing air cooling instead of water cooling, leading most claimants to withdraw. One resident continued the litigation.
In September 2024, Chile's Second Environmental Court delivered a decision with implications extending well beyond this individual project. Rather than permanently blocking the development, the court ordered environmental authorities to reconsider the project's assessment by explicitly incorporating the effects of climate change on water availability. Climate change itself became a legally relevant variable in environmental impact assessment rather than merely a contextual background. The judgment required regulators to evaluate future hydrological conditions instead of relying solely on historical data.
Ireland presents a markedly different legal context. Here, litigation focuses less on water and more on electricity. Data centres already account for more than one-fifth of national electricity demand, placing increasing pressure on grid capacity and Ireland's legally binding carbon budgets. Environmental organisations including Friends of the Irish Environment and ClientEarth have challenged regulatory and planning decisions, arguing that further expansion risks locking the country into prolonged fossil fuel dependence while undermining both domestic climate legislation and EU climate obligations.
The legal reasoning is fundamentally different from Chile's. Rather than asking whether a specific facility adequately protects local environmental resources, Irish litigation asks whether the cumulative growth of an entire economic sector is compatible with national climate governance. This distinction illustrates two complementary models: the Chilean approach emphasises local environmental resilience, particularly water security under climate change, while the Irish approach treats data centres as systemic energy consumers whose cumulative electricity demand must be assessed within national decarbonisation strategies.
Both approaches point towards the same conclusion: courts increasingly reject the assumption that digital infrastructure deserves exceptional regulatory treatment simply because it supports technological innovation.
Why Central Europe should pay attention
The most important lesson from Chile and Ireland is not that data centres consume electricity or water. That has never been in doubt. What is changing is who ultimately decides whether those resources may be allocated to digital infrastructure. Traditionally, these choices belonged to governments, regulators and transmission system operators. Courts reviewed whether procedures had been followed correctly but rarely questioned broader policy assumptions. The emerging wave of data centre litigation suggests that this division of responsibilities is beginning to shift.
In both Chile and Ireland, judges were effectively asked to answer questions that are only partly legal. Should scarce groundwater be reserved for digital infrastructure during a changing climate? Can a country's electricity system accommodate another hyperscale data centre while remaining consistent with its decarbonisation commitments? These are resource-allocation decisions with profound economic consequences. For Central Europe, actively competing for hyperscale investment while simultaneously pursuing electrification of industry, transport and heating, such litigation may evolve into a mechanism through which courts indirectly influence national infrastructure priorities.
Future permitting cannot rely solely on project-level environmental impact assessments. Authorities will increasingly need to demonstrate how individual developments fit within wider energy system planning, climate objectives and resource allocation strategies. Otherwise, these strategic choices may gradually migrate from ministries to courtrooms.
Why this matters for legal professionals
Environmental law practitioners must now advise clients on a rapidly expanding set of legal risks. Data centre litigation is no longer about simple permitting compliance; it now involves cumulative impact assessments, climate-conscious environmental review, and the compatibility of individual projects with national carbon budgets. Lawyers working with energy, infrastructure, or technology clients will face growing demands to integrate climate law principles into project planning and due diligence. For legal professionals, keeping pace with how AI infrastructure intersects with environmental law is increasingly necessary. The AI for Legal section on this site covers related developments in the legal field.
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