WASHINGTON, D.C. — Environmental groups filed a lawsuit against the Environmental Protection Agency over the approval of two new chemicals for use in datacenters. The EPA approved two photoacid generator compounds for import and immediate use in facilities across the U.S.

The lawsuit, identified as Sierra Club v. Environmental Protection Agency, Civil Action No. 25-1112, was filed in the United States District Court for the District of Columbia. The plaintiffs argue that the agency violated federal law by allowing the chemicals into commerce despite acknowledging health risks and a lack of sufficient hazard data.

In its consent orders for the approvals, the EPA stated that exposure to the chemicals can result in acute lethality, genetic toxicity, systemic effects, reproductive and developmental effects, eye corrosion, skin photosensitization, and respiratory irritation. The agency also stated in those same orders that it lacked sufficient information to quantify the risks or estimate the environmental hazard of the approved chemicals.

"You have a situation where the EPA has failed at its most fundamental obligation when it comes to new chemicals, and that is to protect the public from unreasonable risk," Jonathan Kalmuss-Katz, an attorney with Earthjustice, said. He added that the agency's actions represented a reversal of standard regulatory protocol. "This is turning the new chemical review process on its head," Kalmuss-Katz said.

The Toxic Substances Control Act requires the EPA to prohibit or limit activities involving a substance if it may present an unreasonable risk. Despite this statutory mandate, the EPA imposed restrictions limiting only the size of containers for importing the chemicals but did not limit the total volume. The agency states that the approved chemicals should be incinerated, a process that does not fully destroy many chemicals.

Photoacid generators are used in semiconductor production to imprint circuit patterns onto wafers using ultraviolet light. Most chemicals used in semiconductor photolithography are discharged in wastewater or disposed of rather than remaining on the chip. Lenny Siegel, executive director of the Center of Public Environmental Oversight, said there are likely no requirements for semiconductor plants in the U.S. to limit discharges of photoacid generators.

"The EPA should not approve any new photoacid generators, even on a temporary basis, until there is enforceable assurance that there will be zero discharge of such chemicals," Siegel said. Historical data illustrates the potential scale of such discharges. Testing data from 2022 from one U.S. semiconductor production plant showed as much as 78,000 parts per trillion of PFAS in wastewater samples. The EPA legal limit for several common PFAS compounds in drinking water is 4 parts per trillion.

Industry documents from 2024 stated that finding safer alternatives to these chemicals is impossible in some instances and would require stepping back decades in technological advancement. Carolyn Holran, an EPA spokesperson, said the proposal is intended to responsibly speed up permitting and support American economic development and energy dominance. "Our proposal does not alter emission standards or weaken environmental protections," Holran said.

The legal challenge occurs against a backdrop of broader regulatory changes and state-level responses to data center expansion. In March 2025, EPA Administrator Lee Zeldin declared that making the United States the artificial intelligence capital of the world was a top priority. Lee Zeldin has served as the administrator of the Environmental Protection Agency since January 2025.

Zeldin said the state and local authorities closest to the issues and the public should be making the decisions on the permitting process as much as possible, not Washington. "We are cutting unnecessary and burdensome red tape," Zeldin said.

Nearly 200 advocacy groups and more than a dozen states voiced opposition to the EPA's proposed rule change. Democratic attorneys general from 14 states voiced opposition to the EPA proposal in a joint letter. The EPA received more than 4,900 comments on the proposed rule change. Powell, a senior attorney at the Southern Environmental Law Center, said people need to have a chance to have a say before they see bulldozers.

Joe Goffman, a former assistant administrator for the EPA’s office of air and radiation, said the move is likely intended to curb criticism and public oversight of datacenters. "The administration is basically saying: ‘You all may have thought this was an ironclad promise, but it no longer is,’" Goffman said. Jessica O’Donnell, a senior attorney at the Environmental Law and Policy Center, said the term 'minor source' is a misnomer because such facilities can emit large amounts of hazardous pollutants.

Mike Koerber, a former deputy director of the EPA’s office of air quality planning and standards, said the proposal continues efforts by the current administration to turn its back on the fundamental EPA principle of transparency. "This proposal continues efforts by the current administration to turn its back on the fundamental EPA principle of transparency," Koerber said.

Why It Matters

The lawsuit shows a conflict between federal efforts to accelerate artificial intelligence infrastructure and statutory obligations to assess chemical safety. The EPA admitted it lacked sufficient information to quantify the hazards of the approved photoacid generators, yet allowed their immediate import and use. This decision contrasts with the Toxic Substances Control Act requirement to prevent unreasonable risks, raising questions about the adequacy of current review processes for chemicals essential to semiconductor manufacturing.

The case fits into a wider pattern of regulatory adjustments affecting data center permitting and environmental oversight. With nearly 200 advocacy groups and multiple state attorneys general opposing recent EPA proposals, the litigation reflects growing scrutiny of how federal and state agencies balance technological advancement with public health protections. The outcome may influence future approvals of industrial chemicals and the extent of public participation in permitting decisions for large-scale technology facilities.

Timeline

On May 25, 1982, the Environmental Protection Agency approved a State Implementation Plan revision submitted by the Connecticut Department of Energy and Environmental Protection to remove a state order issued to Dow Chemical USA.

The Environmental Protection Agency published a rule titled "Perchloroethylene (PCE) and Carbon Tetrachloride (CTC); Regulation under the Toxic Substances Control Act (TSCA); Compliance Date Extensions" on 2026-07-28.

What's New

Additional reporting identifies the lawsuit filed by environmental groups against the EPA as Sierra Club v. Environmental Protection Agency, Civil Action No. 25-1112, in the United States District Court for the District of Columbia.

An EPA spokesperson stated, "Our proposal does not alter emission standards or weaken environmental protections." Amazon holds enough minor source permits in Data Center Alley, Virginia, to allow its backup generators to emit 4,200 tons of nitrogen oxides annually.