Australia should 'roll out red carpet' for data centres

Australia should be "rolling out the red carpet" to tech giants looking to build data centres in the country and removing "green tape" to ensure their multibillion dollar investments do not go elsewhere.

Climate Change Authority chair Matt Kean issued the comments at a Sydney event on Friday, while also warning that Australia needed clear rules to address community concerns about data centres and their environmental impact.

The call comes as a parliamentary inquiry examines the potential benefits and risks of establishing artificial intelligence hubs in Australia, and as the federal government considers submissions about data centre regulations.

Addressing the Chartered Accountants Sustainability Conference, Mr Kean said data centres represented an enormous opportunity for Australia to attract large international investment.

Technology firms, including AI providers, wanted to build data centres in stable democracies with access to reliable, cheap energy, he said, and Australia could provide both.

"We should be rolling out the red carpet to them — this is one of the biggest investment opportunities that our nation has ever seen," he told attendees.

"They can be out of the cities and they don't have to be in the US, so countries like Australia, the Middle East, Europe, they're competing for this wall of capital that is looking to flow into data centres."

Australia already had $120 billion of data centre investment in the pipeline, Mr Kean said, but regulations were not keeping up with demand and could deter some companies.

The federal government needed to introduce clear rules to give investors the confidence to invest in Australia, he said, while also addressing their water use and outlining renewable energy requirements.

"It means getting rid of red tape, green tape, unnecessary compliance costs and facilitating approvals, whether it may be environmental approvals, planning approvals," he said.

"Let's make sure that regulatory environment is keeping up with where the market's at on this stuff — and I fear that it's not at the moment, and that's providing a barrier to that investment flowing into Australia and us realising those opportunities."

Mr Kean's call comes one week after public consultation closed on proposed AI infrastructure rules that would set mandatory requirements for large data centres, including how they manage energy, water, location and community engagement.

The consultation is expected to inform a national standard for data centre development, while preserving state and territory government authority.

Queensland and the Northern Territory governments have previously rejected proposals to mandate the use of additional renewable energy in data centres.