What You Can do to Prepare for Likely Impacts of EPA's Proposed Rulemaking for PFAS Chemicals

Change is never easy, especially when it comes to responding to proposed rulemaking by the U.S. Environmental Protection Agency (EPA).  Being prepared for potential changes, especially those associated with environmental requirements, is key to ensuring you are ready to timely implement any necessary new measures.

We discussed in our last post the EPA’s recent Notice of Proposed Rulemaking (NPRM) to designate Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or Superfund).  These are two widely used per- and polyfluoroalkyl substances (PFAS).

This NPRM may impact different parties, including PFOA and PFOS manufacturers or processors, manufacturers of products containing PFOA or PFOS, users of PFOA and PFOS products, waste management operations and water treatment facilities. I thought it would be helpful to review what you can do to influence and prepare for the new regulatory landscape this rulemaking could create.

If you may be impacted by this rulemaking, you can submit written comments seeking to influence the outcome of any final regulation. Your written comments can inform the EPA on matters they requested comment on and provide your overall views on the proposed designation of PFOA and PFOS as hazardous substances. The deadline for submitting written comments is 60 days after the NPRM is published in the Federal Register.

Upon finalization, this rulemaking likely will have many significant impacts. Below is a summary of matters you may want to prepare for as well as potential funding opportunities you may want to consider:

Transactions

Corporate and real estate transactions often involve environmental investigation as part of due diligence. A potential new owner or operator may undertake an All Appropriate Inquiry (AAI) to understand the environmental condition of property involved in a transaction as well as to seek environmental liability protection.

One typically follows the federal AAI process under 40 CFR 312 or utilizes the American Society for Testing Methods (ASTM) Environmental Site Assessment Process (starting with the Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, Designation E1527 – 21 (November 2021) or the earlier 2013 version). 

In ASTM E1527-21, the Appendix 6 Summary of Common Non-Scope Issues notes in X6.10 that emerging contaminants such as PFAS where not identified as a hazardous substance by CERCLA are not included in the scope of this process but may be considered in the scope if subject to a state requirement or may be considered as part of other non-scope considerations. Similarly, parties can contractually address PFAS obligations as part of the environmental aspects covered in a sale/purchase or other agreements.

The designation of PFOA and PFOS as hazardous substances likely will significantly impact the environmental due diligence process and environmental provisions in agreements. ASTM states in X6.10 that when emerging contaminants are defined as a hazardous substance under CERCLA they will be evaluated as in the scope of this practice. This designation also may impact actions taken by lenders to a potential transaction.   

Operations

For businesses and other parties, including federal agencies that use or used firefighting foams, it is important to know whether one has or had firefighting foam, paints or other chemicals or products that may contain PFAS. If PFAS is discovered, it is prudent to undertake efforts now to find suitable replacement products and chemicals that do not contain PFAS. This can be a monumental undertaking as the replacement products must satisfy many specifications and requirements, including safety, quality and durability.

Operations might also be subject to new PFAS requirements in permitting, such as a National Pollutant Discharge Elimination System direct discharge permit or a pretreatment permit.  It is also important to know the disposition of PFAS-containing products and wastes. 

As highlighted above, it is vital to evaluate one’s PFAS exposure risk now and take steps to minimize the potential impact to operations.

Remedial Activities

For ongoing Superfund and similar activities, there may be new requirements imposed to incorporate PFAS into investigations and remedies or reopen prior remediated sites to conduct new PFAS investigations and implement additional remedial measures. A hazardous substance designation for PFOA and PFOS could significantly increase the costs of investigation and remediation.

Proceedings

Litigation initiated by states and private parties involving PFAS is ongoing, including cases against manufacturers, distributors, users, federal agencies and airports.

The cases range from complaints against individual companies to class action suits involving hundreds of parties.  The cases typically allege multiple human health impacts as well as environmental impacts to drinking water, groundwater, soils and natural resources. The cases may seek redress for, among other actions, product liability, negligence, unjust enrichment, nuisance and trespass. The hazardous substance designation for PFOA and PFOS could have significant ramifications in ongoing litigation, including damage claims and cleanup responsibilities.

In addition, municipalities and agencies also have initiated numerous administrative investigations and proceedings involving PFAS. These activities can result in multi-media sampling and monitoring, remedial measures, permit modifications, consent order modifications and more. If one has knowledge of PFAS historical or current uses, and any cleanup efforts undertaken, it may be prudent to ensure this information is appropriately retained for potential future needs.

Funding

The Infrastructure Investment and Jobs Act (IIJA). The IIJA invests $10 billion to address PFAS contamination ($1 billion in PFAS Clean water State Revolving Fund; $4 billion in PFAS Drinking Water State Revolving Fund, and $5 billion in PFAS Small & Disadvantaged). The IIJA, along with other funding opportunities and programs such as Brownfields, state revolving funds and other plans (including Michigan Public Act 53 , which includes $40.5 million to help communities address PFAS and other contaminants in drinking water and wastewater) may provide support to some affected stakeholders.

If you believe you will be impacted by this rulemaking, for many reasons including those summarized above, it is important to begin formulating your next steps now.

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