Toowoomba Regional Council is developing a policy that would prohibit new data centres from using potable reticulated water, as the Queensland region experiences a growing flow of enquiries from developers looking for industrial sites. The council voted unanimously at its 18 August 2026 meeting to instruct its CEO to draft an Industrial Water Use Policy that would prohibit the use of drinking water in the operation of data centres connected to the region’s water supply network.
The proposed policy would also require compliance to be demonstrated when new connections to the water supply network are considered, with the draft to return to council by February 2027 at the latest.
Deputy mayor Rebecca Vonhoff says the move was intended to get ahead of potential development rather than react to individual data centre applications. “In the meantime, we’re the ones on the ground who, if we get some of those inquiries turning into development applications before we actually have a policy position, then we’re not in a legally defensible position to require them to use recycled water,” Vonhoff told W.Media.
“So what we did was have a vote to work on that draft policy so that the proponents had clarity, the expectations were set, and our drinking water was protected,” she says.
The council says its officers are receiving approximately two enquiries a week from data centre proponents. The figure is also cited in the rationale for the council motion, which links the interest to Toowoomba’s availability of industrial land as South-East Queensland faces increasing pressure on industrial sites.
Vonhoff says the council could not know how many of those enquiries would eventually become projects. “It’s such an interesting question. You’re basically asking how many tyre kickers are genuine buyers, and I don’t know if I can give you an answer to it,” she says. Developers may be investigating several locations simultaneously before deciding where to invest, she adds.
“But the sheer volume is enough for us to take it seriously and to extrapolate what would that potentially mean? What would even one mean for our drinking water consumption?” she says.
Getting ahead of demand
Toowoomba’s position is unusual because, unlike many councils, the council combines responsibility for planning approvals with ownership of the region’s water infrastructure. Vonhoff, who sits on the policy executive of the Local Government Association of Queensland and represents Queensland on the Australian Local Government Association, says the planning and water arrangements put Toowoomba in a particular position when considering data centre development.
“Some councils have no say and no jurisdiction in planning approvals. That’s not the case in Queensland,” she says. “We are uniquely placed in this instance when it comes to data centres because we have the planning approvals and the responsibility for planning approvals at a local government level.” The experience of long droughts in the region is informing the council’s approach as data centre developers increasingly look towards regional locations.
Vonhoff says Toowoomba has significant industrial land available, while South-East Queensland is losing industrial land to residential development. “I think we are getting that volume of inquiries from data centre proponents because we have the industrial land,” she says. “We shouldn’t be surprised we’re getting those inquiries because we’ve been pitching ourselves nationally as a great place to come and do business because of our close proximity and availability of industrial land.”
The council’s own motion similarly says the enquiries should not come as a surprise given that Toowoomba’s industrial land has been promoted nationally for manufacturing and industry. The region already has an established data centre operator in the form of Pulse Data Centre at Wellcamp, which Vonhoff says had demonstrated an alternative approach to water use.
“It’s got a closed loop system, and that isn’t necessarily what other proponents have been in mind and have been also building in other jurisdictions,” she says.
The proposed policy is specifically focused on data centres because the council believes the emerging industry could create a significant new source of potable water demand. “The outcomes that we’re seeking is to make sure that our drinking water, which is sourced from our dams, isn’t being used in this emerging industry of data centres,” Vonhoff says. “There’s promise of better technology to reduce the consumption of water, but at the moment they’re thirsty. The industry is thirsty.”
A policy, not a ban
Vonhoff stresses that the council’s position should not be interpreted as opposition to data centres. The council motion itself is narrowly focused on water and explicitly says it does not consider energy or jobs.
She says the council was trying to establish a clear framework for an industry it expects will continue to grow. “It’s a very complex policy area, and you need to make sure that what you’re doing is both legally defensible and will also achieve the outcomes that you seek,” she says.
Council officers have up to six months to develop the draft policy, working with the executive teams responsible for water and planning and development as well as legal advisers. The elected council will then consider the draft, with the motion requiring it to be presented no later than the February 2027 ordinary meeting.
The council will also continue discussions with the Queensland and federal governments. The motion directs council to write to the Queensland Premier and Local Government and Water Minister, as well as the Prime Minister and federal Environment and Water Minister, seeking the inclusion of recycled water for new data centres in emerging data centre legislative frameworks.
The intention is not necessarily for developers to rely on existing council infrastructure. Vonhoff says developers could potentially have a strong commercial incentive to build or fund the infrastructure necessary to support alternative water supplies. “They might be highly motivated to build that infrastructure,” she says. “And they might also have the financial means that building that infrastructure is something that is worth that return on. They have a very valuable return on that investment.”
The precise mechanics will be determined through the policy process. “We are a council that will work with people. We’re a council that wants to be collaborative, and our door is open,” Vonhoff says.
Local consequences of a national build-out
Toowoomba’s approach highlights a tension increasingly emerging around Australia’s push to expand data centre capacity. State and federal governments are developing policies aimed at facilitating investment in AI and digital infrastructure, while councils and communities are responsible for dealing with many of the physical consequences of individual developments.
Vonhoff says Queensland’s planning system gives local government a different role from councils in some other states. “There can be ministerial infrastructure designations that are taken up by the state and the state minister, but the very, very, very, very vast majority of planning approvals rest with local government,” she says.
“While they are sometimes really difficult decisions, we appreciate that respect because we are the closest to the people, and so we think that we can always get the outcome, the best benefits, and reflects the community that we serve.”
For Toowoomba, the issue is therefore less about whether Australia should build data centres and more about how the developments fit into the infrastructure and resources of the communities in which they are located.
Vonhoff says the response to the council’s decision had been overwhelmingly positive, including from some large data centre companies. “The common thing that people said is, ‘Thank goodness, this just makes common sense. There’s no alternative to this’,” she says.
She had also received feedback from large data centre operators who welcomed the clarity provided by the policy direction. “I think that that’s the feedback that I’ve received…and so I think that it’s been just met with yes, this makes sense, this provides clarity, and on we go,” she says.
The policy will not allow the council to simply select which industries it wants to host. Individual developments will still be assessed through the planning process. “We don’t pick and choose and say yes to a data centre and no to a cannery or no to a steel fabrication plant, but yes to a meat processor,” Vonhoff says. “Those entities come to us with their development applications, and then we assess each one on its own merits.”
The case for local benefits
Like many local councillors around the country Vonhoff also believes the industry has work to do in explaining what data centre development delivers to the communities hosting it. While the facilities can involve substantial investment, she questioned where the longer-term employment benefits would be felt locally.
“I do think that the industry needs to explain to people, myself included, where the jobs are,” she says. “If the jobs aren’t in the actual ongoing running of the centres, which they don’t seem to be, where are the jobs?” She believes explaining the impact on the wider digital economy will help. “I think they’ve got a responsibility to do that, and I think it’s lacking at the moment.”
That does not mean Vonhoff believes Australia should reject data centres. She sees a strategic argument for maintaining domestic digital infrastructure and developing sovereign capability.
“I think that there’s a really big conversation to be had about sovereign capability,” she says.
“We made a mistake, in my opinion, 40 years ago with our minerals and our resources, and we dug them all up and we shipped them all overseas, and now we buy them back, I don’t want us to repeat history and have everything being done overseas,” she says.
But she says the national strategic argument should not remove the need to consider the local consequences of individual developments. “I try to stay away from any hyper politicisation of things, and just try to do what’s best for the people who live here.”