Victoria's datacentre rules hailed as strongest but face criticism

Labor claims new regulations are toughest in Australia, but they won't apply to dozens of projects already in the pipeline.

Sep 21, 2026

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Victoria's datacentre rules hailed as strongest but face criticism

Labor claims new regulations are toughest in Australia, but they won't apply to dozens of projects already in the pipeline.

In brief

Labor claims new regulations are toughest in Australia, but they won't apply to dozens of projects already in the pipeline. Victoria's government released datacentre rules banning them from residential areas and requiring renewable energy, but exempted existing centres and projects already seeking approval. Originally…

Victoria announces datacentre rules

Victoria announces datacentre rules

On Tuesday, premier Ben Carroll and artificial intelligence minister Anthony Carbines released the government's sustainable datacentre action plan.

New rules ban datacentres from homes

Datacentres will be banned in residential areas, near schools and childcare centres, and in rural areas that cannot support them. A 150-metre buffer zone must separate new developments from homes.

Renewable energy and water requirements

New datacentres must source their own renewable energy and pay for connection costs and network upgrades. They must use recycled or non-drinking water for cooling or offset their usage.

Community benefits and employment

Community benefits and employment

Datacentres must give back to communities via a local investment guarantee, which could include jobs, TAFEs and parks. They must employ Victorians during construction and train people for long-term roles.

Carroll claims strongest rules in nation

Premier Carroll said these are the strongest, clearest rules for datacentres in the nation. But he admitted the rules would not affect the more than 50 existing datacentres or those currently seeking planning approval.

“These are the strongest, clearest rules for datacentres in the nation.”

Pipeline projects seek massive water volumes

Nineteen datacentre applications in the pipeline seek a combined 19,714 megalitres of water per year, or 4% of Melbourne's current supply. Existing datacentres use less than 1% of drinking water in Melbourne and Geelong.

Greens say exemptions create huge loophole

Greens say exemptions create huge loophole

Victorian Greens spokesperson Sarah Mansfield said the lack of retrospectivity created a huge loophole. She said if Labor genuinely believed these protections were necessary, they should apply to every datacentre in the pipeline.

“If Labor genuinely believes these protections are necessary, they should apply to every datacentre in the pipeline.”

NextDC expansion exempt from new rules

NextDC has lodged an application to expand its Footscray datacentre, known as M3, to cover 10 hectares, drawing 225MW of power and running 24/7. Some residential homes are within 15 metres of the datacentre's boundary. The new rules will not apply to this project.

Coalition promises its own datacentre policy

Shadow attorney general James Newbury said Carroll's plan was irrelevant because datacentres are currently being built in the wrong spots. He said the Coalition would release its own policy prior to the November election.

The short version

Victoria's government released datacentre rules banning them from residential areas and requiring renewable energy, but exempted existing centres and projects already seeking approval.

Read the original on the Guardian

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