Why ending production of 'forever chemicals' must start with illuminating supply chains

The first step in meaningful progress toward ending PFAS production is to identify which supply chains contain PFAS. 

A new rule just finalized by the Environmental Protection Agency (EPA) will make it illegal for key sectors like manufacturing, metal mining and chemical manufacturing to release the most common perfluoroalkyl and polyfluoroalkyl substances (known widely as PFAS) into the environment without disclosing the quantity in their regulatory reporting. 

This follows the EPA’s announcement of millions in new funding to better understand how these so-called “forever chemicals” affect nature, agriculture, rural communities and tribal areas. 

In the past year there’s been a flurry of activity aimed at ending PFAS production, including litigation, billion-dollar settlements, a proposed blanket restriction in the European Union and a four-year planned regulatory overhaul in the U.S. 

These actions come against a backdrop of seemingly endless incidents of PFAS contamination, most recently in Vermont, Washington and Delaware. Reports that nearly half of all tap water has been contaminated with PFAS add to a collective sense of urgency as these chemicals have been linked to cancer, infertility, high blood pressure and developmental issues. 

Of course, the pervasive presence of PFAS makes it incredibly challenging for industries to phase them out and for regulators to regulate them in their entirety. 

But the real challenges lie in managing the supply chains — addressing the lack of alternatives, understanding the supplier risks and mapping the supply chains of some 15,000 chemicals.

The most important hurdle to overcome is to gain visibility into the complex global supply chains of some 15,000 chemicals, which implicate producers, raw materials companies and manufacturers around the world. The first step in meaningful progress toward ending PFAS production is to identify which supply chains contain PFAS. 

The public and private sectors need to know which vendors make PFAS and to what risks they’re exposed. Where do their raw materials come from? What products can be replaced? And which vendors provide alternatives? This exercise — mapping supply chains at entity and item levels — creates an opportunity to de-risk in important areas, while also enhancing transparency, compliance, ESG risk-management and operational resilience. 

The second step is to understand which producers continue to make PFAS despite the risks, for regulation and litigation have been slow to effect change. Six of the seven major PFAS producers are the subject of PFAS-related litigation, and the entire industry is facing a wave of regulatory action, yet only two companies, representing about 13 percent of the global market — 3M and Solvay — have announced plans to stop making them.

China has not acted aggressively to curb production, barely scratching the surface with plans to regulate three PFAS out of thousands. This creates long-term economic challenges for the EU and U.S., should China continue to flood the market with cheaper goods made with PFAS.

Regulators looking to make meaningful reductions in PFAS production need to appreciate the persistence of producers despite litigation risk and work toward addressing the unlevel playing field in terms of economic incentives and disparate regulations.

Third, we must address the concentration of supplier risk. Just seven producers account for at least 60 percent of global PFAS production, and these producers are exposed to considerable risk for commercial credit, litigation (with lawsuits and settlements in the billions) and foreign-based operations and ownership risk.

As the U.S. has moved to phase-out PFAS, China has become the leading global producer, accounting for 40-65 percent of total production. This increases the risk of adversarial influence and manipulation for Western companies and governments.  

Even among the largest domestic producers, there’s considerable reliance on foreign parent companies and subsidiaries, with some maintaining Chinese manufacturing operations. 

The current market composition fosters a challenging dynamic, especially for the U.S., in the form of continued dependence on a geopolitical adversary for chemicals that, today, remain critical to many supply chains and lack viable alternatives. This perpetuates ties to the Chinese state and military, creating opportunities for China to exert market control and adverse influence. 

By illuminating PFAS supply chains, manufacturers and regulators can identify the producers with the lowest risk profile. They can reward and create incentives for these producers by not only giving them their business, but by working collaboratively with them on phase-out plans and alternatives.   

Fourth, we must accelerate research into PFAS alternatives that can be introduced into the supply chain. Currently, there is no single alternative for these 15,000 PFAS. Research has pointed to some promising replacements in certain fields, but testing and implementation are still in early stages. 

Governments depend on PFAS for emergency response and defense applications, such as firefighting foams and high-risk CBRN (chemical, biological, radiological and nuclear)-related personal protective equipment. And there are no technically feasible alternatives available in the market today. 

For non-CBRN applications, California and the EU have published potential alternatives such as hydrocarbons, polyurethanes and silicones. However, these alternatives have not been vetted for safety or performance. 

Replacing applications, especially ones that are critical to national security, will require extensive work to implement new processes, production methods and chemical formulations. 

Identifying and testing viable alternatives that can be introduced into existing supply chains is going to require significant time and financial investment across public and private players. 

Finally, we must ensure that supply chain visibility is ongoing — part of an iterative approach to illuminating risk across global production, monitoring compliance with emerging regulations, tracking progress and gradually implementing the alternatives that make a future possible without PFAS.

Theresa Campobasso is senior vice president of strategy for Exiger Government Solutions, where Tim Stone is vice president of supply chain risk management.