Plan for controversial Sydney data centre scrapped after push-back
Goodman Group, the property giant behind the Project Mars data centre, says the decision is due to changes to the "policy and regulatory environment".
Plans for a controversial data centre in Sydney have been abandoned after strong opposition from campaigners.
The facility, which Goodman Group — Australia’s largest property company — had planned to build just metres from homes in a Sydney suburb, would have been a A$1.2bn (£630m; $841m), 90-megawatt site called Project Mars in the Lane Cove area.
In a letter to the local planning authority, the company confirmed it was withdrawing its application. The move comes after sustained resistance from local residents and campaigners.
The row reflects a broader debate in Australia about the place of data centres.
As generative AI has become more widely used in recent years, demand for data centres has surged, and Australia — with its plentiful clean energy, natural gas reserves and land — has become a global hotspot for building them.
But while the government has been eager to draw investment from global AI firms, there has also been strong opposition because of the heavy strain the centres place on water and energy supplies, as well as the disruption they bring to local communities.
Project Mars, which would have been built about 20 metres from the nearest house in Lane Cove, drew 374 submissions during consultation, with only nine backing it.
In its letter to the New South Wales Department of Planning, Goodman Group said that since beginning the planning process in March 2025, it had "undertaken extensive technical investigations, stakeholder engagement and community consultation".
"During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly," it said.
The company said it had "carefully considered these changes" alongside the "views of the local community", and decided not to go ahead with the project.
Goodman Group’s decision comes after the New South Wales government announced last month that it would introduce a fast-track programme for data centres.
Under the programme, proposals could be assessed within 75 days if they meet standards requirements and help fund extra water and energy supply.
Posting on the Facebook page of Lane Cove Responsible Planning Group, Anthony Roberts, a member of the New South Wales Legislative Assembly representing Lane Cove, said it was "a huge win for the Lane Cove West community".
"This is a common-sense win for our community," he said.
"This victory sends a clear message to other data centre developers. To find suitable locations before putting proposals forward.
"Data centres have an important role to play, but developments of this size and scale need to be appropriately located and planned with the surrounding community in mind."