Data Centre Giant Unable to Rule Out Presence of Chemicals in Wastewater Discharge

Australian data centre giant AirTrunk wasn’t able to rule out the presence of chemicals in the wastewater it discharges from its Lane Cove facility in Sydney.

Tom McKellar, the company’s vice president of market expansion, gave evidence to the Environment and Communications References Committee, which is inquiring into the construction of data centres locally.

McKellar faced questions from Senator Sarah Henderson on whether chemicals were present in wastewater.

“I can’t absolutely say that there’s no chemicals in that water,” he replied.

McKellar had earlier told the committee that testing showed no PFAS in water from the site. PFAS are long-lasting compounds sometimes called “forever chemicals” and have been the focus of multi-million-dollar lawsuits against companies like 3M.

Henderson’s question, however, covered chemicals more broadly, and McKellar could not answer directly, saying he would submit an answer in writing at a later date.

But Henderson pressed further.

“I would have thought you would have known whether there were chemicals in the water or not that’s been discharged into Sydney Waters’ system,” she said.

McKellar agreed to give the committee AirTrunk’s water testing results from the past 12 months.

AirTrunk’s Lane Cove facility uses a closed-loop water cooling system, McKellar told the committee, while NextDC, one of Australia’s largest data centre operators, also uses closed-loop, direct-to-chip cooling for its AI infrastructure, according to its own technical documentation.

Macquarie Data Centres, however, says it operates “some of Australia’s first immersion cooling tanks” at its Sydney facility, which involves submerging servers in a thermally conductive liquid.

Immersion cooling is the method most closely linked to PFAS use in the industry. A July report (pdf) by the advocacy group Food and Water Watch found that two-phase immersion cooling fluids are often PFAS compounds, citing Microsoft researchers.

Macquarie Data Centres does not publicly disclose which fluid its immersion tanks use.

That gap in disclosure sits inside a wider regulatory gap.

Sydney Water requires industrial customers, including data centres, to test and report on regulated substances under site-specific discharge approvals. But the New South Wales EPA’s new PFAS rules, introduced this year, apply only to landfills and sewage treatment plants.

They do not mention data centres or other industrial dischargers. That leaves facilities such as AirTrunk’s Lane Cove site reporting PFAS results to the committee voluntarily, on notice, rather than under any mandatory monitoring regime.

The questions come as Australia prepares for a major expansion of data-centre capacity. Microsoft has committed $25 billion to expanding AI infrastructure in Australia over three years, while Amazon says it has invested in 20 renewable-energy projects with a combined capacity of 990 megawatts to support its Australian operations.

The federal government has responded by moving to develop national expectations covering the energy and water use of new data centres.

Pocock Questions Economic Benefit

Senator David Pocock questioned McKellar over AirTrunk’s economic benefit to Australia.

McKellar said its AirTrunk’s main customers were multinational “hyperscalers” like Microsoft, Google and Amazon.

Pocock also asked how much corporate tax AirTrunk paid last financial year. McKellar did not have that figure, but noted that “AirTrunk did pay corporate tax.”

Senator David Pocock speaks during question time at Parliament House in Canberra, Australia, on July 28, 2022. Martin Ollman/Getty Images

In a statement on data centres published in June, Pocock compared the industry’s tax contribution unfavourably to Australia’s experience with gas exports.

“That’s the lesson we failed to learn with gas. We shouldn’t wait another generation to learn it again,” he said.

Pocock said AirTrunk employed 259 people on a permanent basis nationally, according to the company’s own reports.

A separate Microsoft data centre entity reported $1.5 billion in income, but no taxable income and no tax payable, he said.

“If multinational tech giants are going to use Australian land, Australian energy, Australian water and Australian workers to build the infrastructure that powers the AI revolution, then Australians deserve a fair return,” Pocock asserted.