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Communities fighting datacentres say new guidelines in New South Wales may not prevent contentious developments, as the state government has admitted a fast-track pathway will not provide an “automatic knockback” for those who do not meet environmental standards.

Under the Minns government’s new datacentre guidelines, announced on Monday, the planning department will commit to assessing proposals within 75 days if datacentre builders comply with six principles, and no further information is required.

The principles include applying “world-class” standards for noise and air pollution, imposing no net cost to consumers and communities and funding additional water and energy supply. Eligible proposals must commit to sourcing 100% of their energy needs within four years from new renewable energy agreements, including 40% from wind power.

The state’s treasurer, Daniel Mookhey, describing NSW as a “premium destination”, said the standards set a “high bar”.

“This world-class framework provides the certainty that both investors and – importantly – the community need,” he said in a statement.

But the planning minister, Paul Scully, said on Monday the new framework would not provide an “automatic knockback” for datacentres with proposals that did not comply.

“What we are saying is, if you’re coming in with these things solved for and can justify it, we’ll be able to assess that more quickly because you’ve done a lot of the work,” he said.

Heather Champion, a Greens councillor for Wingecarribee shire, has been part of the opposition to a proposal for a 673MW gas plant to power a “hyperscale” datacentre in Moss Vale in the Southern Highlands.

It is one of 19 datacentre projects already in the state significant development pipeline, worth a combined $50.3bn.

On Monday, Champion said it was unclear where the government’s framework left the Moss Vale proposal. “At face value it looks like a gas-fired datacentre wouldn’t be consistent with what the state is hoping for, but we still don’t know for sure.

“Failing a test for fast-tracking doesn’t mean it breaks the rules completely,” she said.

Scully said developers were free to “chance their arm” on proposals that did not meet the new datacentre guidelines, and the planning department was already assessing datacentre proposals within 100 days. He insisted all proposals would remain subject to planning and community consultation standards.

The NSW framework follows Anthony Albanese’s announcement in July of a national office of AI and regulatory framework for datacentres, amid growing community concern about land, water and power use by the rapidly expanding datacentre industry, and the need for a social licence for AI.

The federal energy minister, Chris Bowen, has said commonwealth legislation expected next year will override state governments, after Queensland and the Northern Territory rejected the federal government’s plans to mandate that AI datacentres use new renewable power and ban the use of gas.

Bowen has said that gas has a role to play in firming up datacentres, but datacentres proposing to only use gas would not meet the national minimum standards.

The NSW energy minister, Penny Sharpe, said on Monday the state’s framework was “totally consistent with the federal system”.

“It’s very, very clear here. You’ve got to bring your own energy. You’ve got to look at storage. You’ve got to have to pay for the network connections,” she said.

Sasha Titchkosky, part of a community group in Lane Cove in Sydney, where five datacentres are planned, taking up 40% of available industrial land, said she feared the NSW framework would allow datacentre builders to “rush through as many applications as possible” before commonwealth legislation came into place.

“That’s exactly what we predicted would happen if the federal government didn’t impose a moratorium on new datacentre development and approvals until their regulatory regime was in force,” she said.

The Minns government has credited investment in datacentres, which increased 75% per year on average over the three years to December 2025, as the reason NSW has avoided recession. There are about 60 datacentres operating in NSW.

As part of the second pillar of its datacentre strategy, the state government says it will introduce regulation to make sure datacentres pay for electricity network upgrades without the cost being passed on to households and small businesses.

It has not made the same commitment on the cost of providing water, but will commission the independent pricing regulator, Ipart, to review “how water pricing can reflect the full costs associated with servicing datacentres”, including management of the impacts of drought. The NSW water minister, Rose Jackson, said on Monday she hoped the review would be complete by 2027.

The framework has already been endorsed by datacentre builders. The chief executive of CDC Data Centres, Greg Boorer, said the framework would “sort the serious from the speculative”.

“A great deal of what sits in the NSW pipeline today will never be built, and it is tying up planning authorities and utilities that are already stretched,” he said.

Belinda Dennett, the CEO of Data Centres Australia, said the framework reflected “genuine, extensive consultation with industry”.

“Data Centres Australia welcomes the incentive to meet a high bar,” she said.

NSW Greens MLC, Abigail Boyd, who is chairing the state’s datacentres inquiry, said the announcement reinforced the party’s call for a moratorium on new sites, saying the guidelines were “nothing more than a formalisation of the NSW Labor government’s tech-bro concierge service”.

“The rules are inadequate, and the renewable energy capacity is not there to meet the demands of these destructive projects. For years to come, these projects, if approved, will drive up the state’s fossil fuel emissions.”