Per- and polyfluoroalkyl substances (PFAS) have become a significant cause for concern due to their persistence in the environment and potential health risks. Despite growing regulatory scrutiny, there remains a lack of clarity and certainty in the UK’s approach to managing PFAS. What does this mean for development?
In the first of a series of articles on PFAS, Stephen Sykes, Fern Dempsey and Celyn Evans report on how PFAS constitute an “emerging risk” to development and provide insight into how to mitigate potential risks.
What are PFAS, and why have they become a growing concern?
PFAS are a large class of synthetic chemicals that have been widely used throughout society since the 1940s in a range of products, including firefighting foams and food packaging. PFAS are sometimes referred to as “forever chemicals”, due to their strong chemical properties and great resistance to chemical attack and biological degradation. There is growing concern about both widespread environmental contamination and human health risks from PFAS exposure.
Increased regulatory scrutiny
The Environment Agency (EA) and Office of Environmental Protection have ongoing programmes of work to understand the scale and nature of PFAS; the Health and Safety Executive (HSE) published a paper in March 2023 detailing the most appropriate regulatory management options for dealing with PFAS; CIRIA’s “PFAS Forum” aims to put together the UK’s first guidance on risk assessment and management of PFAS. In addition, DEFRA and the HSE have identified the restriction of PFAS in fire-fighting foams as a key priority for UK regulation of chemicals.
In addition, the Drinking Water Inspectorate issuing updated guidance in August 2024 to enforce a limit of 100 nanograms per litre (ng/L) for a cumulative sum of 48 different PFAS in drinking water. This new guidance aims to better protect public health. Meanwhile, at a European level, the European Chemicals Agency is progressing work on a proposal to restrict the manufacture, placing on the market and use of around 10,000 PFAS.
Impact on development projects
The increased scrutiny of PFAS, coupled with regulatory uncertainty, is impacting development projects and causing delays. The reasons behind the delays can be attributed to all or a combination of the following: insurer anxiety; regulatory confusion; and unforeseen costs.
Insurer anxiety
As PFAS have been used in various industries for almost 100 years throughout the UK, such as at airport sites, their persistence in the environment and resistance to degradation means that they can be detected in rainwater “almost anywhere on Earth”.
As a result, tracing the origin of PFAS on development sites can become an arduous task, and there may be multiple entities who are responsible for its occurrence (some of which may no longer exist). For insurers, this prompts key questions: where does liability lie? Who is responsible for the costs of remediation? How is that remediation envisaged to take place? Ultimately, an insurer’s PFAS exposure can be difficult to quantify because of this lack of or uncertainty around historical data and the nascent science.
PFAS exclusions have become standard in many insurance policies due to the increasing awareness of PFAS-related risks and the potential for significant liabilities. The growing anxiety around PFAS and the risk of insurers shying away from potential development projects may ultimately result in buyer unease, leaving developers with stranded assets.
Regulatory confusion
Even if insurers are content to proceed with insuring sites which have not yet been tested for PFAS, or where PFAS are evident, regulatory intervention and the uncertainty on how to remediate contaminated sites can stall projects.
If a developer has a project that has already progressed through planning and consultation but has not considered PFAS at the time site investigations were conducted, then regulators may ask developers to return to sites to undertake further chemical tests before the project can move forward. There is also a growing risk that regulators may wish to include PFAS as part of any installation permit surrender and associated remediation works before any re-development or divestment can take place.
Regulatory guidance relating to the remediation of land within the UK tends to point towards the Land Contamination Risk Management guidance (LCRM). In November 2024, CIRIA published guidance which aims to explore the PFAS-specific aspects of complying with LCRM, entitled “Good practice guidance: some per- and polyfluoroalkyl substances (PFAS) in soil and the water environment”. Despite this, there is a lack of guidance generally for developers and landowners on how to manage and remediate land potentially affected by PFAS. PFAS contaminated soils and water is also notoriously difficult to treat.
Unforeseen costs
PFAS appears to be impacting developments, meaning in turn, creating unforeseen costs for developers. These costs have the potential to delay or even cause whole projects to halt.
For example, in the soils and waste industry, developers may be required to treat contaminated material onsite or transport contaminated soil to hazardous waste landfill sites, which may be hundreds of miles away from the development site. Both requirements incur significant costs. Sampling itself requires an additional layer of planning and fees, while insurers may request third-party expert legal and technical opinions before agreeing to insure a new development site.
In some instances, the landowner and seller might seek to allocate who bear the risks relating to PFAS in the sale agreement. For example, a developer may look for an open-ended indemnity or the carrying out of works to clean-up the site and an assurance that those works will be effective. This can complicate or slow down deals.
How can developers mitigate these risks?
While PFAS may appear to be a daunting prospect, developers can put in place steps to mitigate the chances of issues relating to PFAS stalling or halting development projects:
- At an early stage, include an investigation into the presence of PFAS when carrying out due diligence and land contamination testing
- Engage and communicate with regulators early
- Consider and include the possible costs of treating or removing PFAS-contaminated soil, water or waste prior to committing to new projects
- Engage with insurers to determine their stance on PFAS and whether the insurance they will provide is viable from a costs and risk perspective and
- Keep up to date with guidance – PFAS are an evolving regulatory area, and the direction of travel appears to be increasing regulatory scrutiny.
Key takeaways
PFAS are clearly a growing concern for the development industry and akin to past issues with contaminants such as oxygenates and asbestos.
While regulatory guidance is currently sparse, we expect to see more certainty going forward. The EA commenced a multi-phase project in 2019 to understand more about PFAS occurrence in the UK and the level of risk that PFAS poses. As part of its ongoing investigation into PFAS, the EA is due to publish site profiles, which should help to provide a greater understanding of the types of sites and activities where PFAS release is likely to have occurred or may be ongoing.
How can we help?
For more information or advice on possible regulations with regards to PFAS and environmental advice on your projects, please contact our Environmental Disputes team who can support you.
