Skip to content

Addressing PFAS Risks in Due Diligence

Posted on by Julie Norton
|

Since the U.S. Environmental Protection Agency (EPA) announced a proposed rule in September 2022[1] to designate two of the most common and researched per- and polyfluoroalkyl substances (PFAS) as a hazardous substance under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the environmental due diligence community has been eagerly awaiting the change.

On April 19, 2024,[2] perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) were designated by EPA as hazardous substances under CERCLA. The Final Rule is effective 60 days after being published in the Federal Register, which is scheduled for July 8, 2024.[3] As of this date, PFAS will be included in the scope of the ASTM 1527-21 (ASTM Standard). Up until this date, PFAS are still considered “emerging contaminants” under the ASTM Standard.

Addressing new contaminants such as PFAS in transactional due diligence, which is still an emerging contaminant within the scientific community, is not any different than addressing more well known and established pollutants, such as benzene and chlorinated solvents. However, determining how to identify and evaluate PFAS as a recognized environmental condition (REC) doesn’t come without its challenges. Although PFAS is described as being “everywhere” by the media and the scientific community, approaching PFAS in due diligence with a risk management perspective will facilitate focused efforts and guide a property owner’s/prospective purchaser’s understanding of potential liabilities.

Identifying and evaluating potential PFAS contamination

  • Understanding that PFAS currently is not widely investigated, or required to be investigated in all states, is important to remain within scope of the Phase I ESA. With any site investigation, attempting to evaluate all known or potential contaminants, and sources of contamination, can be overwhelming. Therefore, it’s important to identify clear objectives during the due diligence effort as it relates to evaluating properties and potential sources of PFAS that may impact the property under investigation.
  • Environmental Professionals (EPs) should possess a foundational understanding of the historical uses of PFAS and the known and likely industries that handled and stored (or currently handle and store) PFAS. Utilizing published and widely-used references that provide detailed information on reasonably known and potential PFAS sources, in addition to the chemical properties for fate and transport analysis, aids in the due diligence evaluation. These references include but are not limited to the Interstate Technology & Regulatory Council (ITRC)[4] and Washington State Department of Ecology’s PFAS Chemical Action Plan.[5]
  • Researching online databases published by state environmental agencies that identify known PFAS contamination at regulated facilities undergoing characterization is an additional tool to confirm information initially reviewed in third-party regulatory database search reports and that assist in making reasonable determinations as it relates to potential impacts to a property under investigation.
  • Additionally, researching local and state health agency assessments of PFAS in public drinking water wells and distribution systems is another helpful resource. While the purpose of an ESA is not to perform a risk assessment, these analytical data support evaluating a complete transport pathway with respect to a property under investigation with a public water connection that may be impacted by a contaminated aquifer. Comparing the drinking water quality, and other groundwater impacts, at a property to state (where available) and federal regulatory levels in evaluating PFAS risks can be addressed in the Phase II ESA as warranted.

Understanding the potential risks

  • Evaluating PFAS as a REC may sound intimidating, especially considering the new hazardous substance designation. Nevertheless, the new CERCLA designation doesn’t necessarily warrant generating a laundry list of PFAS-related RECs in a Phase I ESA. Satisfying one of the CERCLA liability requirements under the ASTM standard is the goal, not overwhelming the property owner/prospective purchaser with recommended PFAS-related investigations that may not be necessary or required yet. Presenting a Phase I ESA loaded with environmental red flags related to PFAS that can’t be definitively evaluated at this stage may result in real estate transaction terminations.  

Preparing a comprehensive ESA addressing potential PFAS concerns should be approached with a risk management perspective. It’s important to remain focused on evaluating RECs to the property under investigation and not on adjacent/surrounding properties. As defined in Section 1.1.1 of the ASTM Standard, the term REC refers to the presence or likely presence of hazardous substances “in, on, or at the subject property...” While it’s possible for PFAS to be in nearly “everything” and found almost “everywhere” it doesn’t necessarily mean it’s on the property being assessed.

Furthermore, identifying specific hazardous substances in a Phase I ESA introduces liability and using the broader term of “hazardous substance” instead of “PFAS” is a best practice. Much like “benzene” for gas stations or “PCE” for dry cleaners would not be specifically called out as a REC, “PFAS” from a landfill wouldn’t need to be called out either. If a Phase II ESA is recommended and ultimately performed, identifying PFAS in the scope of work and the subsequent report is appropriate.

The future of due diligence

  • At the same time that PFOS and PFOA were designated hazardous substances, EPA announced a PFAS Enforcement Discretion and Settlement Policy[6] where enforcement efforts will be focused on manufacturers, federal facilities, and other industrial parties that contributed PFAS releases into the environment. With the new rule, EPA compels responsible parties to pay for investigations and cleanup involving PFAS, similar to other hazardous substances, and will use its CERCLA enforcement authorities to decide which entities to pursue.
  • Recognizing that the hazardous substance designation for PFAS will alter the future of site investigations and due diligence collectively, it’s important to understand that current CERCLA liabilities not involving PFAS will help prepare EPs and property owners/prospective purchasers for future CERCLA liabilities that will involve PFAS. It’s foreseeable that EPA and state agencies may keep cleanup sites open, and may identify new sites to address PFAS. More interestingly, and concerning, is if past cleanup sites that received regulatory closure (for non-PFAS constituents, including Superfund Sites) will be reopened to investigate PFAS.

Identifying PFAS sources and contamination will evolve over time as the science of emerging contaminants is better understood and PFAS investigation data becomes more readily available. While addressing PFAS risks in transactional due diligence will inevitably be faced with its challenges beginning July 8, 2024, evaluating PFAS-related RECs with a risk-based approach can provide for a better understanding of potential liabilities and support informed decision-making.


[1] Advanced Notice of Proposed Rulemaking on Potential Future Designations of Per- and Polyfluoroalkyl Substances (PFAS) as CERCLA Hazardous Substances | US EPA

[2] https://www.epa.gov/newsreleases/biden-harris-administration-finalizes-critical-rule-clean-pfas-contamination-protect

[3] https://www.federalregister.gov/documents/2024/05/08/2024-08547/designation-of-perfluorooctanoic-acid-pfoa-and-perfluorooctanesulfonic-acid-pfos-as-cercla-hazardous#:~:text=Pursuant%20to%20section%20102(a,structural%20isomers%2C%20as%20hazardous%20substances.

[4] https://pfas-1.itrcweb.org/

[5] https://ecology.wa.gov/waste-toxics/reducing-toxic-chemicals/addressing-priority-toxic-chemicals/pfas

[6] https://www.epa.gov/system/files/documents/2024-04/pfas-enforcement-discretion-settlement-policy-cercla.pdf

People

Meet Our Team

Melinda Borgens Senior Environmental Scientist

Melinda is an Environmental Professional with 14 years of diverse and extensive experience in multimedia environmental regulatory compliance, contaminated site assessments, source characterizations of emerging...

Contact Us

Get In Touch







    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    This website requires cookies to provide all of its features. For more information on what data is contained in the cookies, please see our Privacy Policy page. By continuing to use this website, you agree to our Privacy Policy.