Liudmila Chernetska/iStock via Getty Images
Compliance with the first-ever U.S. regulation to limit “forever chemicals” in drinking water is expected to cost about $1.5B annually, according to the Environmental Protection Agency’s estimates, although an industry body expects the cost to be more than three times the amount.
The U.S. National Primary Drinking Water Regulation sets limits for five individual per- and polyfluoroalkyl substances (PFAS) in drinking water.
Regulated public water systems have three years to complete initial monitoring for PFAS. Systems that detect PFAS above the new standards will have five years to reduce the chemical levels.
The American Water Works Association, which previously warned that the cost of compliance would exceed $3.8B annually, said it’s “concerned that the rule’s health and financial impacts are not accurately characterized.”
The Biden administration announced an additional $1B to fund PFAS detection and treatment systems to meet the new standard. The 2021 Bipartisan Infrastructure Law provides for $9B to help PFAS-hit communities and another $12B to make drinking water improvements. However, the AWWA said this may not be enough.
Another industry group – American Chemistry Council – opposed the rule, raising concerns over its underlying science and saying it undercuts other higher-priority water issues.
American Water Works (NYSE:AWK) and California Water Service (NYSE:CWT) said they were prepared to meet the new PFAS standards, and are pursuing funding to mitigate compliance costs.
Meanwhile, Courage & Conviction Investing expects Arq (ARQ) will benefit greatly from the EPA rule due to an expected surge in granular activated carbon demand. The environmental tech firm’s CEO Bob Rasmus recently said the rule “could generate an increase in demand of 3-4 times within the municipal water market alone.”