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In its new draft rules on vehicles, EPA signals it might let California finally regulate rail.

Buried at the bottom of the Environmental Protection Agency’s draft rules on greenhouse gas limits for cars and trucks was a proposal related to another highly polluting form of transit: trains.
The EPA said Wednesday it was considering giving states more authority to regulate locomotives, specifically citing concern that its current policy could impede California’s “exploration of regulations” for trains and train engines. The Golden State has been lobbying the EPA to tighten its standards for locomotives, or to allow it to do so, for years. However, a 1998 rule limits states' ability to regulate emissions for a range of nonroad vehicles, including trains.
I’m not going to pretend this could be a huge deal for climate change. Trains are responsible for just 2% of transportation emissions in the U.S. This is, however, a huge deal for public health and environmental justice. Exposure to diesel exhaust causes lung cancer. Trains also emit nitrogen oxides and particulate matter, which irritate the lungs, exacerbate respiratory diseases including asthma, and contribute to premature deaths. Rail yards are often located near densely populated areas and disproportionately neighbor low-income communities that suffer from a combination of economic, health, and environmental burdens.
But while public health is the most urgent reason to cut pollution from trains, the most promising solutions to address that pollution — batteries and hydrogen fuel cells — will also pretty much eliminate the climate impacts of trains, as a treat.
California petitioned the EPA to tighten its standards for trains back in 2017. “We cannot deliver on our collective responsibility to improve conditions on the ground for overburdened communities without new action by U.S. EPA to require a transition to zero and near-zero emission locomotives,” wrote Mary Nichols, then-chair of the California Air Resources Board, or CARB, the state agency that regulates emissions.
CARB’s concern isn’t just public health, but federal compliance. The state is not on track to meet federal air quality standards. California’s rail yards are already a major source of pollution, and rail operators are planning expansions. The state expects freight rail to increase 50% in the next seven years.
“Locomotives are so dirty that state regulators identified reducing their pollution as the biggest single strategy in their plan to reduce smog to federal health standards by 2037 — responsible for more than 30% of the emissions cuts needed, more than any other sector, including all cars and trucks on the road,” the Los Angeles Times’ editorial board wrote in a recent piece on the need to clean up the rail industry.
“California is a leader on climate,” said Chris Chavez, deputy policy director for the Coalition for Clean Air, a statewide organization working on air quality issues. “The problem is that we still have the dirtiest air in the nation.”
Part of the challenge is that trains are incredibly durable. They are typically “remanufactured,” or repaired and restored, every seven to 10 years, but can otherwise stick around for decades. EPA tightened its emissions standards for locomotives in 2008, but “remanufactured” trains aren’t required to upgrade to the highest standards. Chavez said that in the South Coast Air Quality Management District, a region that encompasses Orange County and much of Los Angeles, some 30% to 50% of the trains still only meet the dirtiest, lowest-level EPA standards. “Those are the most polluting engines that are available and they’re in the dirtiest air basin in the country.”
Under the Trump administration, California’s petition went unanswered. But late last year, Biden’s EPA finally responded. Though it didn’t commit to tightening standards for trains at the federal level, the agency said it had assembled a “rail study team” to evaluate technologies to reduce train emissions, as well as policy options to get the industry to turn over its fleet to trains with newer, cleaner technologies more quickly. It also hinted that it was planning to clarify its policy on state-promulgated regulations.
California hasn’t been idly standing by. State regulators determined that although they had no authority to regulate the manufacture of locomotives, they could issue rules for railroad operators and the types of equipment they use. Next month, CARB is expected to vote on a set of new rules designed to force the industry to begin retiring its oldest trains and replacing them with newer, cleaner models, and by 2035, with zero- or near zero-emission trains that are powered by batteries, overhead electric lines, or hydrogen fuel cells. While the regulations would pertain to trains that are “in-use” in California, it would have implications for the whole of North America, since the rail system is interconnected, and trains frequently travel far beyond their owners’ tracks.
The Inflation Reduction Act could help. The legislation included $3 billion for grants and rebates to reduce air pollution from ports and $60 million for the Diesel Emissions Reduction Act program, which funds pollution reduction projects related to transportation in low-income and disadvantaged communities.
CARB’s rules are sure to face litigation from the rail industry, which claims that the “entire proposed regulation is preempted by federal laws and regulations.” The Association of American Railroads says the industry is already working toward zero-emission rail, with major railroads like BNSF and Union Pacific piloting battery-electric and hydrogen fuel cell trains, but that these solutions won't be commercially available “for the foreseeable future.” But the EPA could soon strengthen California’s case.
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Plus more of the week’s top fights in data centers and clean energy.
1. Osage County, Kansas – A wind project years in the making is dead — finally.
2. Franklin County, Missouri – Hundreds of Franklin County residents showed up to a public meeting this week to hear about a $16 billion data center proposed in Pacific, Missouri, only for the city’s planning commission to announce that the issue had been tabled because the developer still hadn’t finalized its funding agreement.
3. Hood County, Texas – Officials in this Texas County voted for the second time this month to reject a moratorium on data centers, citing the risk of litigation.
4. Nantucket County, Massachusetts – On the bright side, one of the nation’s most beleaguered wind projects appears ready to be completed any day now.
Talking with Climate Power senior advisor Jesse Lee.
For this week's Q&A I hopped on the phone with Jesse Lee, a senior advisor at the strategic communications organization Climate Power. Last week, his team released new polling showing that while voters oppose the construction of data centers powered by fossil fuels by a 16-point margin, that flips to a 25-point margin of support when the hypothetical data centers are powered by renewable energy sources instead.
I was eager to speak with Lee because of Heatmap’s own polling on this issue, as well as President Trump’s State of the Union this week, in which he pitched Americans on his negotiations with tech companies to provide their own power for data centers. Our conversation has been lightly edited for length and clarity.
What does your research and polling show when it comes to the tension between data centers, renewable energy development, and affordability?
The huge spike in utility bills under Trump has shaken up how people perceive clean energy and data centers. But it’s gone in two separate directions. They see data centers as a cause of high utility prices, one that’s either already taken effect or is coming to town when a new data center is being built. At the same time, we’ve seen rising support for clean energy.
As we’ve seen in our own polling, nobody is coming out looking golden with the public amidst these utility bill hikes — not Republicans, not Democrats, and certainly not oil and gas executives or data center developers. But clean energy comes out positive; it’s viewed as part of the solution here. And we’ve seen that even in recent MAGA polls — Kellyanne Conway had one; Fabrizio, Lee & Associates had one; and both showed positive support for large-scale solar even among Republicans and MAGA voters. And it’s way high once it’s established that they’d be built here in America.
A year or two ago, if you went to a town hall about a new potential solar project along the highway, it was fertile ground for astroturf folks to come in and spread flies around. There wasn’t much on the other side — maybe there was some talk about local jobs, but unemployment was really low, so it didn’t feel super salient. Now there’s an energy affordability crisis; utility bills had been stable for 20 years, but suddenly they’re not. And I think if you go to the town hall and there’s one person spewing political talking points that they've been fed, and then there’s somebody who says, “Hey, man, my utility bills are out of control, and we have to do something about it,” that’s the person who’s going to win out.
The polling you’ve released shows that 52% of people oppose data center construction altogether, but that there’s more limited local awareness: Only 45% have heard about data center construction in their own communities. What’s happening here?
There’s been a fair amount of coverage of [data center construction] in the press, but it’s definitely been playing catch-up with the electric energy the story has on social media. I think many in the press are not even aware of the fiasco in Memphis over Elon Musk’s natural gas plant. But people have seen the visuals. I mean, imagine a little farmhouse that somebody bought, and there’s a giant, 5-mile-long building full of computers next to it. It’s got an almost dystopian feel to it. And then you hear that the building is using more electricity than New York City. This is very intimidating
The big takeaway of the poll for me is that coal and natural gas are an anchor on any data center project, and reinforce the worst fears about it. What you see is that when you attach clean energy [to a data center project], it actually brings them above the majority of support. It’s not just paranoia: We are seeing the effects on utility rates and on air pollution — there was a big study just two days ago on the effects of air pollution from data centers. This is something that people in rural, urban, or suburban communities are hearing about.
Do you see a difference in your polling between natural gas-powered and coal-powered data centers? In our own research, coal is incredibly unpopular, but voters seem more positive about natural gas. I wonder if that narrows the gap.
I think if you polled them individually, you would see some distinction there. But again, things like the Elon Musk fiasco in Memphis have circulated, and people are aware of the sheer volume of power being demanded. Coal is about the dirtiest possible way you can do it. But if it’s natural gas, and it’s next door all the time just to power these computers — that’s not going to be welcome to people.
I'm sure if you disentangle it, you’d see some distinction, but I also think it might not be that much. I’ll put it this way: If you look at the default opposition to data centers coming to town, it’s not actually that different from just the coal and gas numbers. Coal and gas reinforce the default opposition. The big difference is when you have clean energy — that bumps it up a lot. But if you say, “It’s a data center, but what if it were powered by natural gas?” I don’t think that would get anybody excited or change their opinion in a positive way.
Transparency with local communities is key when it comes to questions of renewable buildout, affordability, and powering data centers. What is the message you want to leave people with about Climate Power’s research in this area?
Contrary to this dystopian vision of power, people do have control over their own destinies here. If people speak out and demand that data centers be powered by clean energy, they can get those data centers to commit to it. In the end, there’s going to be a squeeze, and something is going to have to give in terms of Trump having his foot on the back of clean energy — I think something will give.
Demand transparency in terms of what kind of pollution to expect. Demand transparency in terms of what kind of power there’s going to be, and if it’s not going to be clean energy, people are understandably going to oppose it and make their voices heard.
This week is light on the funding, heavy on the deals.
This week’s Funding Friday is light on the funding but heavy on the deals. In the past few days, electric carmaker Rivian and virtual power plant platform EnergyHub teamed up to integrate EV charging into EnergyHub’s distributed energy management platform; the power company AES signed 20-year power purchase agreements with Google to bring a Texas data center online; and microgrid company Scale acquired Reload, a startup that helps get data centers — and the energy infrastructure they require — up and running as quickly as possible. Even with venture funding taking a backseat this week, there’s never a dull moment.
Ahead of the Rivian R2’s launch later this year, the EV-maker has partnered with EnergyHub, a company that aggregates distributed energy resources into virtual power plants, to give drivers the opportunity to participate in utility-managed charging programs. These programs coordinate the timing and rate of EV charging to match local grid conditions, enabling drivers to charge when prices are low and clean energy is abundant while avoiding periods of peak demand that would stress the distribution grid.
As Seth Frader-Thompson, EnergyHub’s president, said in a statement, “Every new EV on the road is a win for drivers and the environment, and by managing charging effectively, we ensure this growth remains a benefit for the grid as well.”
The partnership will fold Rivian into EnergyHub’s VPP ecosystem, giving the more than 150 utilities on its platform the ability to control when and how participating Rivian drivers charge. This managed approach helps alleviate grid stress, thus deferring the need for costly upgrades to grid infrastructure such as substations or transformers. Extending the lifespan of existing grid assets means lower electricity costs for ratepayers and more capacity to interconnect new large loads — such as data centers.
Google seems to be leaning hard into the “bring-your-own-power” model of data center development as it looks to gain an edge in the AI race.
The latest evidence came on Tuesday, when the power company and utility operator AES announced a partnership with the hyperscaler to provide on-site power for a new data center in Texas. signing 20-year power purchase agreements. AES will develop, own, and operate the generation assets, as well as all necessary electricity infrastructure, having already secured the land and interconnection agreements to bring this new power online. The data center is set to begin operations in 2027.
As of yet, neither company has disclosed the exact type of energy infrastructure that AES will be building, although Amanda Peterson Corio, Google’s head of data center energy, said in a press release that it will be “clean.”
“In partnership with AES, we are bringing new clean generation online directly alongside the data center to minimize local grid impact and protect energy affordability,” she said.
This announcement came the same day the hyperscaler touted a separate agreement with the utility Xcel Energy to power another data center in Minnesota with 1.6 gigawatts of solar and wind generation and 300 megawatts of long-duration energy storage from the iron-air battery startup Form Energy.
The microgrid developer Scale has acquired Reload, a “powered land” startup founded in 2024, for an undisclosed sum. What is “powered land”? Essentially, it’s land that Reload has secured and prepared for large data centers customers, obtaining permits and planning for onsite energy infrastructure such that sites can be energized immediately. This approach helps developers circumvent the years-long utility interconnection queue and builds on Scale’s growing focus on off-grid data center projects, as the company aims to deliver gigawatts of power for hyperscalers in the coming years powered by a diverse mix of sources, from solar and battery storage to natural gas and fuel cells.
Early last year, the Swedish infrastructure investor EQT acquired Scale. The goal, EQT said, was to enable the company “to own and operate billions of dollars in distributed generation assets.” At the time of the acquisition, Scale had 2.5 gigawatts of projects in its pipeline. In its latest press release the company announced it has secured a multi-hundred-megawatt contract with a leading hyperscaler, though it did not name names.
As Jan Vesely, a partner at EQT said in a statement, “By bringing together Reload’s campus development capabilities, Scale’s proven islanded power operating platform, and EQT’s deep expertise across energy, digital infrastructure and technology, we are supporting a more integrated approach to delivering power for next-generation digital infrastructure today.”
Not to say there’s been no funding news to speak of!
As my colleague Alexander C. Kaufman reported in an exclusive on Thursday, fusion company Shine Technologies raised $240 million in a Series E round, the majority of which came from biotech billionaire Patrick Soon-Shiong. Unlike most of its peers, Shine isn’t gunning to build electricity-generating reactors anytime soon. Instead, its initial focus is producing valuable medical isotopes — currently made at high cost via fission — which it can sell to customers such as hospitals, healthcare organizations, or biopharmaceutical companies. The next step, Shine says, is to scale into recycling radioactive waste from spent fission fuel.
“The basic premise of our business is fusion is expensive today, so we’re starting by selling it to the highest-paying customers first,” the company’s CEO, Greg Piefer told Kaufman, calling electricity customers the “lowest-paying customer of significance for fusion today.”