A Tasmanian Town Said Yes to a Giant AI Data Centre. The Federal Government Announced New Rules the Very Next Day.
George Town Council in northern Tasmania voted 6-1 on Tuesday, 25 August 2026 to approve a large AI data centre at Long Reach, on the former Gunns Pulp Mill site near the Tamar River estuary (The Guardian). A data centre is a building packed with powerful computers that store information and run software — in this case, the kind of heavy-duty computing that powers artificial intelligence. At 288 megawatts, the facility could use as much electricity as a small city. The decision followed a heated council meeting where local speakers voiced objections, and came despite a petition with nearly 6,000 signatures and more than 300 public submissions on the application.
The project, formally named "Project Southgate Bell Bay," is planned for Lot 1 East Tamar Highway, Long Reach, on the former Gunns Pulp Mill site at Bell Bay, situated between Williams Creek and Dirty Bay along the kanamaluka/Tamar Estuary (Pulse Tasmania; Firmus). Firmus, the Australian developer behind the project, describes the Long Reach development as a new "AI Factory" project. The facility will use direct-to-chip liquid cooling, which means sending coolant fluid straight to the hottest parts inside each computer to keep them from overheating, rather than relying on air conditioning. It will also use existing 220kV power infrastructure (Baxtel; Data Center Dynamics). Firmus is also planning further data centre developments in Tasmania beyond the Long Reach site.
Council planners had recommended approval ahead of the vote (ABC News; Pulse Tasmania). But the council's decision drew immediate scrutiny over its scope. The council stated that concerns raised in submissions about energy use, AI, and "commonwealth regulation" were "outside the scope" of its role in deciding the application (The Guardian). Councillor Heather Ashley said the council had to "apply the law as it is today" and could not go beyond its planning guidelines. Councillor Winston Mason said councillors had been "very reluctant" to approve the data centre but had to make the decision under planning rules and regulations.
The tension the councillors described is built into the system. Local planning authorities in Tasmania operate under the Land Use Planning and Approvals Act 1993, which governs permit assessments within defined limits. When a massive AI facility raises questions that reach well beyond whether the building fits the zoning — energy grid strain, water consumption, the carbon footprint of intensive computing — the planning law's silence on those topics is not an oversight. It is a boundary the council cannot cross. The council's assessment was confined to what its laws empower it to evaluate.
Opponents now have 14 days from the Tuesday decision to lodge an appeal. Anne-Marie Bastian, who started the Change.org petition against the data centre, said the decision was likely to be appealed by multiple residents (The Guardian).
The day after the council vote, Wednesday 26 August, Prime Minister Anthony Albanese announced after national cabinet that the federal government would legislate from early next year a nationally consistent set of rules setting minimum requirements for large data centres (The Guardian). The government plans to work with states and territories on consistent mandatory standards covering energy, water, and land use for large data centres, with legislation "designed to complement, not duplicate" state and territory planning and approval processes.
The broader context here is one of timing and gaps. The George Town decision was made under a planning regime that explicitly excluded the very concerns — energy consumption, AI governance, federal regulatory gaps — that the Commonwealth now intends to address. Had a national framework on data centre energy and water use been in place, the arguments the council declared out of scope would have had a proper home in the rules. The council's approval may well comply with Tasmania's planning law as it stands. Whether it would satisfy the standards the Commonwealth is now designing is a separate question that no one can yet answer.
For Firmus, the approval secures a critical site at a moment when Australia's AI infrastructure pipeline is accelerating. Tasmania offers renewable-heavy grid power, which the existing infrastructure at Long Reach can tap, and the liquid cooling architecture points to high-density computing workloads rather than conventional data storage. The developer's broader pipeline of Tasmanian sites suggests a regional strategy, not a one-off facility.
For residents and the council, the gap between the decision made and the rules envisioned is the core tension. A 6-1 vote settled a planning question. It did not settle the policy questions about energy intensity, environmental impact, and the pace of AI infrastructure buildout that drove nearly 6,000 people to sign a petition and over 300 to write submissions. Those questions now move to a different arena: the Commonwealth's legislative process, where the framework Albanese announced will be developed with states and territories over the coming months, and the Tasmanian Civil and Administrative Tribunal, where any appeal would be heard.
The 14-day appeal window closes in early September. Whether opponents file, and on what grounds, will determine whether the Long Reach approval holds or enters a longer contest. Either way, the project now sits at the intersection of a local planning regime that has spoken and a national set of rules that is still being written.
