Forever Chemicals, Permanent Spending: The Growing Cost of Clean Water 

Written in partnership with Sustainable Market Strategies (SMS)

Contamination from so-called “forever chemicals”, formally known as per- and polyfluoroalkyl substances (PFAS), has become a growing environmental and public health concern. As the scale of contamination becomes better understood, regulators across North America and Europe are introducing measures to address the risks associated with these persistent substances. 

Alongside regulatory developments, litigation and the need to address historical contamination are driving demand for testing, water treatment and remediation technologies. For environmental-impact investors, this presents a potentially significant long-term opportunity, with demand for solutions extending beyond immediate regulatory requirements. 

The Persistence Problem 

PFAS are a large family of synthetic chemicals used in products ranging from industrial coatings and semiconductors to medical devices, batteries and firefighting foams. The same carbon-fluorine bonds that make PFAS commercially useful also make many of these substances extremely persistent in the environment, hence the nickname “forever chemicals”. 

Scientists have linked exposure to certain PFAS compounds with a range of adverse health outcomes. As contamination has been documented in drinking water systems around the world, regulators have increasingly shifted their attention from studying the problem to managing it. In 2023, the International Agency for Research on Cancer classified PFOA as carcinogenic to humans and PFOS as possibly carcinogenic to humans.¹ According to the Environmental Working Group, around 176 million Americans drink water contaminated with PFAS, ² while estimates suggest that roughly 200 million Europeans may be exposed to concerning levels of these substances.³

Addressing this contamination requires effective methods to detect and remove PFAS from water and soil, as well as safely manage or destroy the resulting waste. 

Replacing PFAS is particularly challenging in industries such as semiconductors and medical technology, where these chemicals are used for their specific performance characteristics and suitable alternatives may not always be available. Even where their use is phased out, contamination from past industrial activity will continue to require monitoring and clean-up. 

The United States: More Continuity Than Headlines Suggest 

In May 2026, the U.S. Environmental Protection Agency (EPA) proposed changes to its PFAS drinking-water regulations, including extending compliance deadlines for certain water systems. While the EPA has also proposed removing limits for four PFAS compounds, enforceable drinking water standards for PFOA and PFOS would remain in place. The proposed extension reflects the practical challenges faced by water utilities in developing treatment infrastructure and securing the necessary financing to meet these requirements.⁴

Another important development occurred in August 2026, when the U.S. Court of Appeals for the District of Columbia Circuit upheld the EPA’s designation of PFOA and PFOS as hazardous substances under the federal Superfund framework. The decision preserved a key legal basis for future clean-ups and reinforced the potential liability associated with PFAS contamination.⁵

For water utilities and industrial operators, compliance with existing PFAS standards requires substantial investment in testing, treatment infrastructure and ongoing monitoring. The continued legal obligations surrounding contaminated sites also create demand for specialist remediation and waste management services. While changes to regulatory timelines may delay some projects, they do not remove the need to address existing contamination. This provides a degree of visibility over longer-term demand for companies operating across the water treatment and environmental services sectors.⁶

Europe Continues Moving Forward 

While the U.S. regulatory picture is more mixed, Europe continues to advance its proposed restrictions on PFAS. The European Chemicals Agency (ECHA) is evaluating one of the most comprehensive PFAS restriction proposals to date, covering thousands of substances and a wide range of industrial applications.⁷

European regulators have raised concerns that existing measures may be insufficient to address PFAS risks. At the same time, they recognise the challenges faced by sectors such as energy, electronics, semiconductors and medical technologies, where suitable alternatives are not always available. The eventual framework may therefore involve a combination of restrictions, exemptions, transition periods and measures to manage emissions. 

Although the final requirements are still being developed, the proposed restrictions could have significant implications for industries that manufacture or use PFAS. Companies may need to invest in alternative materials, improve monitoring of PFAS emissions and introduce additional treatment processes to limit releases into the environment. Alongside these measures, the need to address existing contamination in water systems and industrial sites is expected to support longer-term demand for testing, water treatment and remediation services across Europe.⁸

Beyond Regulation: The Litigation Tailwind 

Regulation is not the only factor supporting PFAS-related spending. Litigation has also become an important driver, with major manufacturers agreeing to multi-billion-dollar settlements linked to drinking-water contamination, including 3M’s landmark settlement with U.S. public water systems.⁹

These settlements can help fund testing, treatment and remediation projects over several years. They also provide a mechanism through which some of the costs associated with historical contamination can be directed towards addressing the problem. 

There is also a connection between litigation and regulatory activity. As testing becomes more widespread and additional contamination is identified, further remediation needs and potential legal claims may emerge. Where settlements provide funding for clean-up activities, they can help move projects forward that might otherwise face financial constraints. 

Technologies and Services Behind PFAS Clean-Up 

PFAS is often discussed primarily as a chemicals issue, but from an investment perspective, it also represents an environmental infrastructure theme. Addressing contamination requires a range of services and technologies, from laboratory testing and monitoring to water treatment, waste management and the safe disposal or destruction of PFAS-containing materials. 

This value chain spans multiple segments. Testing and monitoring providers include companies such as ALS, Agilent Technologies and Waters. Water-treatment specialists include companies such as Xylem, Veolia, Pentair and Zurn Elkay. Hazardous-waste management and disposal providers represent another important part of the market. 

The opportunity extends beyond chemical manufacturing and could support investment over several decades. Unlike environmental themes that depend primarily on the future adoption of new technologies, PFAS remediation is driven in large part by contamination that already exists in groundwater, municipal water systems, industrial sites and landfills. 

The pace of regulatory implementation and associated investment will depend on policy decisions, funding availability and the practical challenges of deploying treatment infrastructure. Nevertheless, existing contamination, ongoing litigation and public health concerns provide reasons for continued investment in monitoring and remediation, even as regulatory approaches evolve. 

For environmental-impact investors, the scale and persistence of PFAS contamination present an opportunity to gain exposure to companies providing environmental technologies and services. As more contaminated sites are identified and water systems work towards meeting increasingly stringent standards, demand could extend across the entire remediation value chain, from initial testing and monitoring to treatment, waste management and destruction technologies The scale of the challenge, combined with the range of technologies and services required to address it, could make PFAS remediation an important area of long-term growth within the environmental solutions market.