EPA Adopts New Standard for Phase I Environmental Site Assessments

New Standard Changes Guidance Related to Per- and Polyfluoroalkyl Substances (PFAS)

Per- and polyfluoroalkyl substances (PFAS) are frequently in the news. With the United States Environmental Protection Agency (US EPA) adopting a new standard for Phase I Environmental Site Assessments (Phase I ESAs), the importance of understanding the implications of PFAS has risen dramatically for property transactions and environmental due diligence projects.

Background

The American Society for Testing and Materials (ASTM) has a national standard that guides the type of environmental review – a Phase I ESA – that should be completed as part of your pre-purchase due diligence or refinancing process.

On December 15, 2022, the U.S. EPA adopted the new ASTM E 1527-21 Standard and published the new standard in the Federal Register. The rule takes effect on February 15, 2023; however, the older ASTM E 1527-13 standard can still be utilized until February 13, 2024. Both the E 1527-13 and 1527-21 standards will satisfy the All Appropriate Inquires (AAI) requirements under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) until February 13, 2024.

Phase I ESAs and Emerging Contaminants, Including PFAS

While the old standard is available until February 13, 2024, Verdantas considers the new standard more protective for our clients due to revisions that better address emerging contaminants like PFAS.

The revised standard now includes “emerging contaminants” as “non-scope items” similar to asbestos, lead paint, and radon. That means that contaminants not yet identified by US EPA as hazardous substances under CERCLA, like PFAS, may not be considered in your Phase I ESA under the old standard unless specifically requested.

Continuing to follow the old standard, without evaluation of emerging contaminants like PFAS, may introduce risk in environmental due diligence projects. In September 2022, the US EPA proposed adding PFAS to the CERCLA list of hazardous substances. This listing will have significant implications on liability for property owners who “own” sources of PFAS contamination – whether current or legacy. Understanding these risks is critical to making informed decisions regarding property transactions and refinancing.

Verdantas has adopted the E 1527-21 ASTM Standard and has been utilizing the new Standard along with the E 1527-13 Standard since the revised standard was released in the 4th Quarter 2021. Verdantas staff has implemented the new Standard for reports across the country and can help guide you in your acquisition or re-financing project including implementing the new E 1527-21 ASTM Standard.

Other Key Changes in the New Phase I Standard:

There are several additional key changes in the revised standard including:

1. Updated definitions: the terms Recognized Environmental Condition (REC); Controlled Recognized Environmental Condition (CREC); and Historical Recognized Environmental Condition (HREC) have all been updated with important clarifications.
2. Definitions for “Property Use Limitation” and “Significant data gap” are now available.
3. The historical records review section now reflects common industry practice, including subject and adjoining property identification, use, and research objectives; 
4. Numerous updates and additions to the appendices, including a flowchart and guidance to help properly classify conditions as RECs, CRECs, or HRECs, a revised report outline, and a discussion of business environmental risks.

Where to Go for Further Information

Verdantas has extensive experience and expertise addressing the risks associated with PFAS on all types of projects, including environmental due diligence projects. Reach out to your local Verdantas representative, or contact us if you have any questions regarding PFAS, environmental due diligence, or the new ASTM Standard for Phase I ESAs.