What is an environmental impact assessment?

How an environmental impact assessment works

An environmental impact assessment looks at a project's likely effects before decisions are made. The European Commission says major building or development projects in the EU must first be assessed for their impact on the environment. That happens before the project can start.

Under the EU's EIA Directive, the developer gives the approving authority a report. The Commission says it must include:

• a description of the project, such as its location, design and size
• its potential significant effects
• reasonable alternatives
• measures to avoid, prevent, reduce or offset likely significant impacts

There are also rules on how the public is informed and how those affected can take part. The Commission says an assessment is required for projects such as nuclear power stations and motorways. For many others, each EU member state decides case by case or by set criteria.

How the United States does it

The U.S. federal counterpart is the National Environmental Policy Act, or NEPA. It was signed into law on January 1, 1970. The Environmental Protection Agency says NEPA requires federal agencies to assess the environmental effects of proposed actions before making decisions. That includes decisions on permit applications.

As of October 2026, the agency describes three levels of review. An action that normally has no significant effect can be categorically excluded. An environmental assessment checks whether the effects could be significant. If they would be, the agency prepares a more detailed environmental impact statement, or EIS. A draft is published for public review before the final version.

Why it matters for data centers

Large data center campuses can come under these laws. Finland's EIA Act lists permanent tree removal across a single area of more than 200 hectares among projects that need an assessment. It also lists boiler or power plants with a fuel power of at least 300 megawatts.

On October 6, 2026, Finland's Supervisory Agency sent the developer of two planned data centers a formal request to stop site work. CNBC describes the developer as a Google subsidiary. The agency said the assessments for both projects were unfinished. In its notice for the Muhos site, it wrote that the preparation work alone would need an assessment under the tree removal item. The head of its environment department said large-scale preparation can narrow the options an assessment is meant to weigh.