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Australia Secures States' Buy-In for National AI Data Center Energy Rules

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Australian Prime Minister Anthony Albanese said Wednesday that regional leaders had agreed to move ahead with new national rules governing the energy and resource use of AI data centers.

The national cabinet agreed to establish minimum requirements governing how large data centers use electricity, water and land, with the government planning to draft the rules by the end of 2026 and legislate in early 2027.

In a press conference, Albanese said, "We have buy-in on Australia's national AI laws," including from the last hold-out state, Queensland, while noting that it was essential to have a standard nationwide system in place in order to attract investments in the sector, according to a Bloomberg report.

Queensland and the Northern Territory had initially opposed the proposals, which included requiring energy-intensive data centers to use renewable energy. Queensland officials had raised concerns that the measures could increase Canberra's control and discourage investment.

However, on Wednesday, Queensland Premier David Crisafulli said that the framework can accommodate the state's control over its electricity distribution, transmission and generation.

"We believe that we can control our data sovereignty, protect the rights of local communities and enable that energy mix to bring those data centers on," he said.

The northeastern Australian state has earmarked 700 hectares of land for a data center and technology hub, to be operated by a Singapore-based developer. The project is expected to be Australia's largest, costing an estimated A$30 billion.

Australia is currently in the midst of a rapid buildout in AI data centers, attracting significant investments supported by its abundant land and renewable energy potential. The country attracted nearly A$9 billion ($6.5 billion) in data center and server projects in the first three months of 2026.

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