Brief comments on the deregulation of data centers in Latin America: the case of Chile
By Paz Peña, coordinator of the Latin American Institute of Terraforming.
Arrive and operate. Or, as the Minister of Science says, data centers in Chile are ready to “plug and play.” Days ago, I attended a virtual meeting in Spain, where we discussed regulatory trends related to data centers. They asked me about the situation in Latin America and Chile. I replied – to the surprise of some foreigners- that trends here are toward deregulation. There are many examples, but let's talk about Chile in light of LaBot news.
The government (famous for calling itself ecologist) approved a regulatory change that means that new data centers built in Chile will not have to undergo any environmental impact assessment; they will only have to comply with sector-specific procedures, such as obtaining building permits. A change in the thresholds for diesel storage gives rise to this new scenario. As journalist Francisca Skoknic says in LaBot:
Curiously, data centers are not environmentally assessed for their energy impact or water consumption, but because they store large volumes of diesel to run backup power equipment in case of outages. The SEIA regulation in point ñ3 establishes that the storage threshold for flammable substances is 80,000 liters. With the change made by the Council of Ministers, that limit rises to 1,000 tons, or 1 million liters, which is what the Ministry of Health's sectoral regulation requires for the storage of hazardous substances.
For the government, the changes to the thresholds only affect projects that do not have a significant environmental impact. In other words, despite scientific evidence, such as that contained in the 2024 UNCTAD reports, data centers in Chile do not have a significant environmental impact: they are ready to “plug and play.”
We have been aware of this trend toward deregulation for some time. The Minister of Science said in the press when announcing the National Data Center Plan that “it aims to identify and make available land that has internet connectivity, access to renewable energy, pre-approved permits for the installation of these data centers, and where companies can invest and set up quickly. Plug and play.” These are the sectoral permits that the government intends to grant as replacements for the current environmental restrictions, which environmental organizations have denounced as an attempt to deregulate rather than enhance environmental permits – a phenomenon that the industry and the government refer to as “permisología” (permit culture). In addition, the national plan establishes a “Clean Production Agreement,” a voluntary agreement between the productive sector and the State that sets specific sustainability goals to reduce the environmental impact of industrial activities. Furthermore, we cannot deny that the data center industry lobby is, as they have said publicly, in favor of deregulation.
I've heard government representatives publicly state that the plan is not about deregulation but rather an attempt to bring order, ensure sustainability, and prevent the uncontrolled growth of data centers in municipalities such as Quilicura. The truth is that we are witnessing public policies that are not only based on science but have also failed to incorporate the concerns of sectors other than a specific industry.