Settlement reached: DuPont, Chemours, and Corteva to Pay Over 6 Billion in Compensation

On August 4th, Chemours, DuPont, and Corteva announced a settlement with the state of New Jersey, agreeing to pay $875 million (approximately 6.29 billion RMB) to resolve claims related to per- and polyfluoroalkyl substances (PFAS) pollution.

According to the agreement, this settlement will resolve all legacy pollution claims related to the existing and historical operational sites of the three companies (including Chambers Works, Parlin, Pompton Lakes, and Repauno), as well as all claims related to PFAS pollution throughout the state of New Jersey. The settlement amount will be paid over 25 years, with $16.5 million of the total settlement amount allocated to resolve PFAS pollution claims not related to the operational sites of the three companies (including $4.125 million related to aqueous film-forming foam).

Additionally, the three companies have established a governance fund of up to $1.2 billion and a reserve fund of $475 million to guard against future bankruptcy or default.

According to the Memorandum of Understanding signed by all parties in January 2021, Chemours will bear 50% of the settlement amount, approximately $250 million; DuPont will bear 35.5%, approximately $177 million; and Corteva will bear the remaining 14.5%, approximately $72 million.

On July 11, DuPont agreed to pay a settlement of $27 million (approximately 190 million RMB) to resolve a nearly decade-long water contamination lawsuit in a village in northern New York State, with an additional $6 million allocated for a medical monitoring program for current residents who have been exposed.

In this case, Saint-Gobain Performance Plastics, Honeywell International, and 3M reached a settlement in 2021, with a total amount exceeding $65 million. DuPont is the last remaining defendant.

In this class action, it is reported that a local Teflon fabric coating plant operated by Saint-Gobain and Honeywell caused drinking water to be contaminated with perfluorooctanoic acid (PFOA). DuPont provided the Teflon materials used at the plant, while 3M supplied the PFOA used in DuPont's products. Both companies were sued in 2018.

PFOA is a type of PFAS chemical, which is used in non-stick products such as Teflon. It is associated with various serious diseases, including kidney cancer and testicular cancer.

Public records show that DuPont has incurred multiple compensations and penalties due to PFAS pollution issues.

DuPont has been continuously purchasing PFOA produced by 3M since 1951 for the production of Teflon.

In 2005, the United States Environmental Protection Agency imposed a $16.5 million fine on DuPont due to PFOA. Subsequently, DuPont promised to completely phase out the use of PFOA, which is used to make Teflon, by 2015 and to reduce PFOA emissions.

In 2017, DuPont and Chemours reached a settlement to pay $671 million to resolve thousands of lawsuits related to PFOA leaks.

In 2020, a cancer survivor named Abbott sued DuPont after developing testicular cancer twice due to years of exposure to PFAS produced by the company and was ultimately awarded a $40 million settlement from DuPont.

In June 2023, DuPont, Chemours, and Corteva reached a settlement agreement worth $1.18 billion to resolve complaints from approximately 300 drinking water providers regarding PFAS. Chemours contributed approximately $592 million, DuPont contributed $400 million, and Corteva contributed $193 million.

In recent years, multiple states in the United States have filed lawsuits against companies responsible for PFAS pollution, accusing them of causing large-scale environmental pollution and of concealing evidence of its dangers for decades. Several companies have begun to settle these cases.

3M Company, a supplier of DuPont, has faced multiple lawsuits:

In May, its Cynthiana plant in Kentucky received a subpoena from the Kentucky Energy and Environment Cabinet, requesting information about the plant's use and emission of PFAS and other potentially hazardous substances. Additionally, the regulatory agency instructed 3M to develop a plan to investigate potential PFAS emissions from the plant.

In the same month, it was also announced that a settlement had been reached with the state of New Jersey regarding PFAS-related claims, with a total amount of $450 million.

In addition, it reached a settlement with U.S. public water suppliers in March 2024, agreeing to pay up to $10.3 billion over 13 years to help clean up the contamination of drinking water with "forever chemicals." It is worth mentioning that 3M Company has stated that it will exit all PFAS manufacturing by the end of 2025.

In addition to 3M Company, BASF Corporation, the North American subsidiary of BASF, reached a settlement in 2024 regarding PFAS contamination with public water systems across the United States, agreeing to contribute $316.5 million.

Solvay USA Inc. reached a settlement with the state of New Jersey in 2023, under which Solvay will pay $175 million to the New Jersey Department of Environmental Protection ($75 million as compensation for natural resource damages and $100 million to fund remediation efforts in the area surrounding the West Deptford plant).

PFAS, or per- and polyfluoroalkyl substances, are a series of synthetic organic compounds that do not occur naturally. They are primarily composed of carbon and fluorine atoms. The most extensively studied compounds include perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and hexafluoropropylene oxide dimer acid (GenX), which are characterized by excellent thermal stability, resistance to degradation, fire resistance, and persistence.

Currently, global regulations on PFAS are becoming increasingly strict, and enforcement agencies are intensifying their efforts regarding these substances. More and more PFAS compounds are being included or are about to be included in regulatory controls.

Source: Beijing Customs

In April this year, the U.S. Environmental Protection Agency issued new regulations, implementing more than 20 measures to strengthen PFAS control, including imposing stricter limits on the content of PFAS in drinking water.

In China, the current standard for drinking water adopts GB/T 5750.8-2023 "Standard Examination Methods for Drinking Water Part 8: Organic Indicators," which imposes limits on 11 types of PFAS, including PFOA and PFOS.

In 2023, China has classified certain PFAS chemicals as persistent organic pollutants (POPs) and included them in the "List of Key Controlled New Pollutants (2023 Edition)," prohibiting their production and processing use (except for exempted purposes). Additionally, the current national food safety standards in China have not approved any PFAS substances for use in the production of food contact materials.

In this context, international chemical giants such as 3M, DuPont, Chemours, Solvay, and BYK have announced plans to gradually reduce the production of PFAS-related products and shift towards high-performance chemical alternatives.

For example, Solvay will cease the production of TFA and its fluorinated derivatives (classified as PFAS) at its Salindres plant in France in September 2024; BYK-Chemie will stop producing additive products containing PFAS in August 2024.

Notably, PFAS occupies an irreplaceable position in many high-performance material fields due to its excellent stability, water resistance, oil resistance, and low friction properties. Taking semiconductor etching liquid as an example, PFAS can precisely control the etching process to ensure the high precision requirements of chip manufacturing. In contrast, its alternatives have significant shortcomings in terms of purity and stability, resulting in a decreased yield of chips. If companies adopt alternatives, costs are expected to increase by 20% to 50%.

In the fuel cells of new energy vehicles, PFAS serves as a key component, significantly enhancing the performance and stability of the cells. However, so far, it has been difficult to find materials that can completely replace PFAS in this application scenario. Additionally, PFAS has deeply integrated into various sectors of the industry chain, appearing in textiles, surfactants, food packaging, non-stick coatings, fire-fighting foams, and more. The supply chain has developed a strong dependency on PFAS, and the process of replacement, from research and testing to large-scale production, typically takes 5-10 years. This means that a comprehensive replacement of PFAS in the short term is challenging to achieve.