3M Reaches $10.3B PFAS Settlement

TUESDAY, JUNE 27, 2023


Global manufacturer of industrial products and household items 3M (St. Paul, Minnesota) recently announced that it will be paying up to $10.3 billion over the next 13 years to fund public water suppliers who have detected “forever chemicals” in their supplies.

This “broad class resolution” reportedly comes after two decades and thousands of previous lawsuits over the manufacturing of 3M products that contain per- and polyfluoroalkyl substances (PFAS). These PFAS, also referred to as “forever chemicals,” have reportedly been found in hundreds of 3M’s household items, including makeup and carpeting, as well as coatings to repel water, grease and oil.

According to the release, the agreement is still subject to court approval and is expected to:

  • Provide funding for public water suppliers (PWS) across the country for PFAS treatment technologies without the need for further litigation;
  • Provide funding for eligible PWS that may detect PFAS in the future;
  • Resolve current and future drinking water claims by PWS related to PFOA, PFOS and all other PFAS, including those that are included as a portion of the Aqueous Film Forming Foam (AFFF) multi-district litigation based in Charleston, South Carolina; and
  • Provide funding for PWS nationwide to conduct testing for PFAS.

3M stated in the release that this settlement would not be an admission of liability and that it would be prepared to defend itself against litigation if the settlement is not approved by a court.

"This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025," said 3M chairman and CEO Mike Roman.

3M PFAS Background

This news comes after the company announced its plans to exit PFAS manufacturing in December of 2022.

PFAS are noted to be critical in the manufacture of many products that are important for modern life, including medical technologies, semiconductors, batteries, phones, automobiles and airplanes.

According to 3M’s press release, not only is the company planning to stop the use of PFAS in its manufacturing, but it is also aiming to discontinue the use of PFAS across its product portfolio.

After careful consideration and a thorough evaluation of the evolving external landscape, the company shared that it is aiming to achieve the entire exit plan by the end of 2025.

Specifically, 3M shares that it will:

  • Exit all PFAS manufacturing by the end of 2025: 3M will discontinue manufacturing all fluoropolymers, fluorinated fluids, and PFAS-based additive products. 3M will help facilitate an orderly transition for customers. 3M intends to fulfill current contractual obligations during the transition period; and
  • Work to discontinue use of PFAS across our product portfolio by the end of 2025: 3M has already reduced its use of PFAS over the past three years through ongoing research and development and will continue to innovate new solutions for customers.

As a result of this decision, 3M is expecting the changes in manufacturing to have an effect on its finances. The current annual net sales of manufactured PFAS are approximately $1.3 billion with estimated EBITDA margins of approximately 16%.

Because PFAS within the company’s product portfolio represent a small portion of its overall revenue, 3M expects to incur related total pre-tax charges of approximately $1.3 billion to $2.3 billion. Approximately 70-80% of the total is expected to be non-cash.

Beginning this year, 3M was planning to adjust for the results of manufactured PFAS in arriving at results, adjusted for special items.

Other PFAS News

Earlier this year, in March, the Biden-Harris Administration announced a proposal for the first-ever national drinking water standard for six per- and polyfluoroalkyl substances (PFAS). The action builds on President Joe Biden’s plan to combat PFAS pollution, as well as the U.S. Environmental Protection Agency’s PFAS Strategic Roadmap.

According to the announcement, the EPA is leveraging the latest science and complementing state efforts to limit PFAS by proposing to establish legally enforceable levels for six PFAS known to occur in drinking water.

The proposal, if finalized, would reportedly regulate PFOA and PFOS as individual contaminants, and will regulate four other PFAS—PFNA, PFHxS, PFBS and GenX Chemicals—as a mixture. Specifically, this would include: 

  • PFOA and PFOS: EPA is proposing to regulate PFOA and PFOS at a level they can be reliably measured at 4 parts per trillion.
  • PFNA, PFHxS, PFBS, and GenX Chemicals: EPA is also proposing a regulation to limit any mixture containing one or more of PFNA, PFHxS, PFBS, and/or GenX Chemicals. For these PFAS, water systems would use an established approach called a hazard index calculation, defined in the proposed rule, to determine if the combined levels of these PFAS pose a potential risk.

Additionally, the proposed regulation would require public water systems to monitor for these chemicals, as well as require systems to notify the public and reduce PFAS contamination if levels exceed the proposed regulatory standards.

The EPA says that it anticipates over time, the rule would prevent thousands of deaths and reduce tens of thousands of serious PFAS-attributable illnesses.

“Communities across this country have suffered far too long from the ever-present threat of PFAS pollution. That’s why President Biden launched a whole-of-government approach to aggressively confront these harmful chemicals, and EPA is leading the way forward,” said EPA Administrator Michael S. Regan.

“EPA’s proposal to establish a national standard for PFAS in drinking water is informed by the best available science, and would help provide states with the guidance they need to make decisions that best protect their communities. This action has the potential to prevent tens of thousands of PFAS-related illnesses and marks a major step toward safeguarding all our communities from these dangerous contaminants.”

3M is just the latest chemical company to have reportedly reached a settlement related to the presence of PFAS in local drinking water. 

In June, chemical company Chemours, alongside manufacturer DuPont de Nemours and agricultural chemical company Corteva, Inc., reached an agreement to resolve all PFAS-related drinking water claims.

According to the release, the companies will collectively establish and contribute a total of $1.185 billion to a settlement fund for United States water systems. The three chemical manufacturers were reportedly facing thousands of lawsuits across the country alleging that PFAS were utilized in their manufacturing processes.

   

Tagged categories: 3M; Clean Water Act; Construction chemicals; Environmental Control; Environmental Controls; Environmental Protection; Health & Safety; Health and safety; Manufacturing Plant; NA; non-potable water; North America; potable water; Program/Project Management; Safety; Water/Wastewater

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