Attorneys and advisers must start scrutinizing the effects of new federal and state regulations of PFAS for their renewable energy clients, including potential reporting requirements, litigation, and environmental liabilities.
PFAS, a class of over 12,000 per-and polyfluoroalkyl compounds, are often called “forever chemicals” because of their strong chemical makeup and persistence in the environment. The renewable energy industry uses these compounds (largely fluoropolymers) for their weatherization, flexibility, insulation, durability, and self-cleaning properties, though some manufacturers are transitioning to non-PFAS materials to serve these same purposes.
Renewable energy components such as hydrogen fuel cells, wind turbines, sheathing for power cables, and coatings for electrical wires can all contain PFAS. They also can appear in battery energy storage system cabinets and in fire suppression systems for battery energy storage projects.
Renewable energy companies must now consider PFAS in real estate diligence and may be required to comply with upcoming reporting obligations under new federal regulations. Certain states have proposed or instituted bans on selling and distributing PFAS-containing products and parts, which may affect the import of renewable project components.
The focus of PFAS litigation and regulation over the past decade has focused on PFAS manufacturers and PFAS-containing products. In recent years, there has been a rise in consumer product litigation, including false advertising claims connected to alleged PFAS content in products such as cosmetics, food packaging, and apparel. Renewable energy components so far haven’t been the target of either type of lawsuit.
New EPA Rules
To avoid litigation, renewable energy companies must prepare to act now that two types of PFAS—perfluorooctanoic acid, or PFOA, and perfluorooctane sulfonate, or PFOS—are considered “hazardous substances” under the Superfund law. For example, the Environmental Protection Agency will require Phase I site assessments to consider the potential historic impact of PFOA and PFOS on real property.
Renewable energy companies, which frequently develop projects on former agricultural land, may see an increase in recognized environmental conditions identified on those sites based on past use of biosolids, which may contain PFOA and PFOS. However, those sites may now be classified as brownfields that qualify for development incentives due to the potential presence of hazardous substance contamination.
The EPA also has imposed a one-time reporting requirement, due in May 2025, on any company that manufactured or imported certain PFAS or PFAS-containing products since 2011. The reporting rule, under the Toxic Substances Control Act, is expansive. It applies to more than 1,400 types of PFAS, including chemicals imported as part of manufactured articles, such as renewable energy equipment and components.
Although this new PFAS reporting obligation doesn’t include exemptions or minimum production thresholds, it’s limited to “information known or reasonably ascertainable.” This means companies should conduct reasonable research, such as reviewing product specification sheets from manufacturers, to determine whether PFAS was used in a product.
Companies can use reasonable estimates when calculations are unavailable and don’t have to spend resources on external studies or exact calculations or measurements.
In addition to the type of PFAS, companies will be required to report the use of consumer or commercial product production volumes, byproducts, disposal plans, exposure, and existing data on environmental and health effects.
The EPA released an instructional manual for reporting in May. If a company only manufactured or imported PFAS-containing products, and not PFAS substances themselves, they can submit a streamlined reporting form.
State PFAS Laws
Maine and Minnesota enacted legislation that will prohibit the sale and distribution of products or components containing PFAS, including products intended for industrial and commercial use and consumer use.
Maine will ban intentionally added PFAS in all products, with limited exemptions, by 2032. Minnesota will ban most PFAS-containing products in the state by 2032. These state-level prohibitions may impact the availability of PFAS-containing components in renewable energy companies’ supply chains.
However, both states exempt specific products or product categories from the ban if the use of PFAS in those products is determined to be “currently unavoidable,” providing an opportunity for renewable energy companies to continue using certain PFAS-containing products.
Several other states—including New York, Colorado, Vermont, and Washington—enacted restrictions on certain categories of PFAS-containing consumer products that aren’t closely associated with renewable energy operations, but none are as broad as in Maine and Minnesota.
Outlook
To address potential compliance obligations, litigation risks, and environmental liabilities associated with PFAS, renewable energy companies and their technical consultants and attorneys should audit the PFAS-containing products they use and the potential regulatory obligations they trigger, along with how federal and state agency actions could impact supply chains.
Renewable energy companies also should document their consideration of PFAS and any related mitigation measures in real estate diligence and development projects, such as in Phase I site assessments and permitting applications, to protect themselves against PFAS-related citizen suits and environmental liabilities.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Lea A. Phillips is partner at Ballard Spahr focused on the renewable energy, manufacturing, and waste/recycling industries.
Erin M. Carter is an associate at Ballard Spahr advising on environmental litigation, regulatory, and transactional matters.
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