New Clean Cloud Act Targets Data Centers and Crypto Miners with Fees, Zero-Carbon Mandate by 2035

The Clean Cloud Act of 2025 takes direct aim at the energy consumption of the digital economy—specifically large data centers and cryptocurrency mining operations. The bill starts by acknowledging that these facilities are massive power hogs, projected to consume up to 12% of U.S. electricity by 2028, and notes that many are powered by older, retiring fossil fuel plants. To tackle this, the bill introduces a mandatory annual reporting system and an escalating emissions performance standard (EPS) designed to push the industry toward zero-carbon power.

The Digital Energy Footprint Audit

First, the EPA and the Energy Information Administration (EIA) are teaming up to demand transparency. If you own a “covered facility”—a data center or cryptomining operation with more than 100 kilowatts of installed power—you’ll have to report annually starting in 2026. This isn’t just about total consumption; you have to detail where the power comes from: the grid, behind-the-meter assets, and the specific mix (wind, solar, coal, gas, etc.). This data collection is crucial because, as the bill states, there’s currently a major lack of transparency regarding the energy sources fueling this booming sector (Sec. 3(b)(1)). For the average person, this means that for the first time, we’ll see a clear, public accounting of the environmental cost of our digital lives, from AI services to blockchain transactions.

The Countdown to Zero Emissions

The core of the bill is the Emissions Performance Standard (EPS), which sets a regional baseline for the greenhouse gas intensity of electricity consumed. Starting in 2026, this baseline is established based on the current regional grid mix, but it gets tighter every year, reducing by 11% annually until 2034. The big deadline is 2035, when the baseline for every region drops to zero metric tons of carbon dioxide-equivalent per kilowatt-hour (Sec. 3(c)(2)(D)). This means that by 2035, covered facilities must effectively be running on 100% zero-carbon power, or face severe financial penalties.

Who Pays the Carbon Tax?

If a covered facility’s power consumption exceeds the regional baseline, a significant fee kicks in starting January 1, 2026. The fee is complex because it targets two groups. If the facility is pulling power from the electric grid, the utility gets charged (Sec. 3(c)(3)(A)). If the facility is using power from its own behind-the-meter generation (like a dedicated gas plant), the facility owner pays the fee directly (Sec. 3(c)(3)(B)). The penalty starts at $20 per kilowatt-hour of excess emissions, but here's the kicker: that amount increases annually by the rate of inflation plus an extra $10 (Sec. 3(c)(3)(A)(iii)). For a large operation, this escalating fee structure could quickly become financially devastating, creating a massive incentive to decarbonize fast.

Crucially, the bill protects regular residential customers. Utilities hit with this fee are explicitly prohibited from passing the cost on to any customer that is not a covered facility. If they try, they face a fine of double the recouped amount (Sec. 3(c)(3)(A)(vi)). This provision is designed to ensure that the cost of cleaning up the digital economy falls on the industry driving the consumption, not on households struggling with rising energy bills.

Incentivizing Clean Firm Power

So, where does all that fee money go? It’s not just disappearing into the general fund. Seventy percent of the collected fees and penalties are earmarked for “Clean Firm Grants” (Sec. 3(c)(4)(C)). These grants, rebates, and low-interest loans are specifically for the research, development, and deployment of two things: zero-carbon electricity generation assets that can run at high capacity factors (over 70%)—think nuclear or advanced geothermal—and long-duration energy storage (assets that can discharge for at least 10 hours). This is a direct, substantial investment into the reliable, always-on clean power sources needed to back up intermittent renewables.

Another 25% of the funds go toward grants for states, tribes, municipalities, and utilities to support programs that lower residential electricity consumer energy costs, such as direct rebates (Sec. 3(c)(4)(B)). This is the bill’s attempt to offset any general cost increases that might result from the rapid energy transition, offering a potential cushion for residential ratepayers.

The Fine Print: What Counts as Clean?

The bill is extremely strict about what energy sources count toward compliance, particularly concerning power purchase agreements (PPAs) and behind-the-meter generation. For example, if a facility signs a PPA for renewable energy, that energy only counts as clean if the generation asset is new (less than 36 months old), would have otherwise been retired, or is physically delivered within the same geographic region (Sec. 3(b)(4)). After December 31, 2027, the rules get even tougher: the clean energy must be generated and consumed in the same hour as the facility uses it. This hourly matching requirement is a major hurdle, ensuring facilities can’t just buy cheap annual renewable energy credits from far away; they have to secure reliable, time-matched clean power in their own region.