The American Society for Testing and Materials (“ASTM”) is expected to release a revised international standard for Phase I Environmental Site Assessments (“ESAs”) in December of 2021 that will clarify a number of key components of the standard and elevate the importance of per/poly-fluoroalkyl substances (“PFAS”).
Phase I ESAs are conducted by many parties when they become involved in the sale, acquisition, development, or financing of a piece of land, including developers, owners, and parties who provide loans for or serve as tax equity investors on renewable energy projects. The Phase I ESAs allow those parties to get a glimpse into the environmental condition of the land and identify any potential contamination on-site. Some of those parties – by acquiring an ownership or leasehold interest in the land, or by becoming an operator of the site – take on potential environmental liability if there have been releases on-site, including liability under the strict liability scheme of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). A defense to CERCLA liability is available if the party conducted certain diligence that complies with the United States Environmental Protection Agency’s All Appropriate Inquiries (“AAI”) standard, and if the party exercises appropriate care with respect to issues identified. Environmental consultants prepare those Phase I ESAs and use the current ASTM standard as a guideline to prepare a thorough report and comply with AAI.
Until recently, the current ASTM standard focused on identifying/quantifying the presence of “hazardous substances” as defined by CERCLA (thus satisfying the AAI requirements) and the presence of petroleum products (which are generally regulated by state and federal programs separate from CERCLA). However, ASTM has recently proposed a new ASTM standard that will consider PFAS during the Phase I diligence process. While the new ASTM standard states that PFAS diligence will be considered a “non-scope consideration” for the time being (i.e., addressing PFAS within a Phase I is not required to meet the AAI standard), recent legislative/regulatory trends (e.g. the PFAS Action Act of 2021) suggest that PFAS may be included within CERCLA’s definition of a “hazardous substance” within coming years. Additionally, this new ASTM standard will likely aid in compliance with state-specific PFAS programs, which appear to be another continuing regulatory trend.
The newly revised ASTM Phase I standard will also seek to: (a) improve upon explanations for the key terms such as “Recognized Environmental Condition”, “Controlled Recognized Environmental Condition”, and “Historical Recognized Environmental Condition; (b) formally define things like “Property Use Limitation”; (c) and further standardize things like historical records review and site reconnaissance in an effort to continue to standardize and homogenize the Phase I process, generally.
Contact Ben Busboom or another member of Husch Blackwell’s Wind Energy Team, Solar Energy Team, or Energy Storage Team with any questions you have on Phase I ESAs, the new ASTM standard, or environmental diligence generally.