South Korea Eases Permit Rules for AI Data Centres

AI data centres in South Korea will need far fewer parking spaces, face a faster permit process and may skip a power-grid review if they are built outside Seoul, under measures agreed at a deregulation meeting chaired by President Lee Jae-myung on 23 October.

The plans were set out in a joint government release for the second full meeting of the Regulatory Rationalisation Committee. The Ministry of Science and ICT (MSIT) leads the data-centre items. They are part of a wider push on the government’s “three megaprojects”, of which AI data centres are one.

A data hall is not an office block

The most concrete change is to building rules. Korean planning rules scale parking, electric-vehicle charging and other extras with a building’s size. Industry has argued that this makes little sense for data centres, which have few visitors or staff for their floor area. The government has agreed.

“We will exclude unmanned facilities such as server rooms and cooling and power equipment from the criteria used to calculate building size,” MSIT said, according to the Seoul Economic Daily. The joint release says this will apply from March 2027, using powers in the AI Data Centre Special Act, and could cut the requirements to as little as about a third.

The release gives a worked example. A data centre of 10,000 pyeong, about 33,000 square metres, where plant takes up more than 70% of the floor space, would need 25 parking spaces instead of 83.

Faster permits and a possible grid-review exemption

Permits are the second target. Projects currently need a power-grid impact assessment, a building permit, a landscape review and a traffic assessment, the Seoul Economic Daily reported. The release promises batch handling of permits and a time-out system for approvals, with a dedicated desk set up before the Special Act takes effect.

The more significant change is a review, by MSIT and the climate and energy ministry, of exempting AI data centres outside the capital region from the power-grid impact assessment. Under the Distributed Energy Act’s enforcement decree, that assessment applies to users of 10MW or more. The release compares Korea’s process with abroad. It says the UK designates large data centres as national critical infrastructure and exempts them from local building rules, and that the US has fast-tracked power approvals from years to 60 days.

The government also plans to support Korean suppliers. The Seoul Economic Daily reported a new programme worth about 200 billion won ($139 million) next year to develop domestic materials, parts, equipment and software for data centres. The release describes a data-centre cluster with a large testbed beside the gigawatt-scale megaproject site, and says it expects exports by small and medium-sized data-centre suppliers to more than double.

Community consent is the harder rule to write

The grid exemption is the measure to watch, and it is still only under review. As drafted, it would apply only outside the capital region. That makes it a nudge rather than a mandate: a regional site would become easier to approve than one near Seoul, which steers new power demand away from the capital without banning anything there. Whether it is agreed, and on what conditions, will decide how much the package changes where data centres are built.

The building-size change is easier to defend. Rules designed for offices and shops were never a good fit for buildings that are mostly machines. Cutting parking from 83 spaces to 25 is a modest saving on its own, but across a national build-out it removes a cost that bought little.

The weaker part of the package is local consent. An MSIT official told the Seoul Economic Daily that projects “cannot go ahead without the support and acceptance of local residents”, and that the government “will require a community benefit plan as a mandatory condition for special zone status, which gives operators reductions in levies”. The same report noted that no rules currently govern how residents’ views are gathered. Guidelines are promised, not written.

That matters because the industry is moving faster than the rulebook. TSN has covered HD Hyundai Electric and LG CNS teaming up on data-centre power equipment, an immersion-cooling deal between LG Electronics, GS E&C and GRC, VESSL AI’s plans for a Vera Rubin cluster and NeoAI Cloud’s reported financing for a site in Pohang, all this month.

The measures build on a cross-ministry task force for AI data-centre megaprojects that MSIT launched in July. According to Yonhap, special zones are due to be designated in the first half of next year.

The next step is the draft enforcement decree. “We plan to issue a public notice of the proposed enforcement decree at the end of this month,” Ryu Je-myung, second vice minister of science and ICT, told the Seoul Economic Daily. That text will show how much of the package becomes binding.