Goodman Group has withdrawn its development application for the A$1.2 billion Project Mars data centre in Lane Cove, Sydney, following intense community backlash and shifting regulatory policies. The proposed 90-megawatt facility faced severe criticism from local residents and utility providers due to its planned location just 20 metres from homes and 160 metres from a school, alongside projected water consumption of 1.4 million litres daily. The cancellation highlights growing friction between Australia's rapid AI infrastructure boom and local environmental concerns.
Withdrawal of the Project Mars proposal
- ▪Goodman Group withdrew its development application for the A$1.2 billion ($842 million) Project Mars data centre in Lane Cove, Sydney, on September 28, 2026.
- ▪Project Mars is the third data centre proposal withdrawn in Australia within five months, following similar community campaigns in Perth and Katoomba.
- ▪Goodman Group cited evolving federal and state policy alongside local community feedback as the reasons for abandoning the Project Mars development application in Lane Cove, Sydney
Local opposition to Project Mars
- ▪Lane Cove residents and community groups celebrated the withdrawal of the Project Mars data centre, with Lane Cove Responsible Planning spokesperson Sasha Titchkosky expressing relief and happiness
- ▪The Project Mars public consultation received 374 submissions, with only nine submissions expressing support for the proposed data centre.
- ▪Lane Cove Mayor Merri Southwood welcomed the withdrawal of the Project Mars proposal and called for a moratorium on future data centre construction in the local government area until tougher planning laws are established
Project Mars development plans
- ▪The proposed 28-metre-tall Project Mars facility developed by Goodman Group was planned 20 metres from Lane Cove residential homes and 160 metres from Lane Cove West Public School, bordering a local park and low-density housing
- ▪The construction of the proposed Project Mars facility in Lane Cove, Sydney would have required the demolition and excavation of four existing warehouses
Utility and infrastructure concerns
- ▪Sydney Water declined to support Project Mars without detailed planning assessments, warning that the Project Mars facility would place excessive pressure on the existing drinking water system
- ▪Ausgrid raised concerns in May 2026 that the Project Mars development in Lane Cove, Sydney would strain infrastructure and increase electrocution, fire, noise, and visual amenity risks
- ▪At full capacity, the proposed Project Mars facility in Lane Cove, Sydney was expected to consume approximately 1.4 million litres of water per day and 35 litres per second during peak times
Evolving data centre regulations
- ▪Goodman Group general manager Ben McGilp stated at a Senate inquiry that the company supports clear, consistent, and evidence-based regulation to provide confidence to communities and industry.
- ▪The New South Wales government announced a fast-track framework in August 2026 to assess compliant data centre applications within 75 days if they meet strict environmental and utility standards.
- ▪The Australian federal government introduced rules in July 2026 addressing data centre locations and resource use, with supporting legislation expected in parliament by early 2027.
Australia's data centre expansion
- ▪Australia is experiencing a rapid data centre buildout driven by the global artificial intelligence boom, abundant land, and renewable energy potential.
- ▪Data Centres Australia warned that the primary risk for the nation is under-building data centres, which could redirect investment to jurisdictions with weaker environmental protections.
Debatable claims
- ▪The economic benefits of the AI boom outweigh the local environmental costs of data centers
- ▪Australian councils should halt data center approvals until tougher planning laws are established
- ▪Building large-scale data centers near residential neighborhoods poses unacceptable community risks
- ▪Under-building data centers poses a greater risk to Australia than the environmental impacts of rapid construction
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