A significant PFAS rule remains in place
On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit upheld the Environmental Protection Agency’s designation of PFOA and PFOS as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as CERCLA or Superfund.
The court denied petitions challenging the rule and concluded that EPA acted reasonably based on the administrative record.
For commercial real estate professionals, the decision provides greater certainty around a rule that has already affected environmental due diligence since 2024. It also reinforces an important point: potential PFOA and PFOS concerns should be evaluated as part of a compliant Phase I Environmental Site Assessment not treated solely as optional emerging-contaminant considerations.
What the ruling changed and what it did not
EPA finalized the CERCLA designation in 2024, and the rule became effective on July 8, 2024. Since that date, PFOA and PFOS including their salts and structural isomers have been CERCLA hazardous substances.
The August 2026 decision did not create that designation. Instead, it rejected the legal challenge seeking to overturn it.
That distinction matters. The ruling strengthens the regulatory footing of the existing rule, but the underlying due-diligence responsibility is not new. Phase I ESAs completed in accordance with ASTM E1527-21 and the federal All Appropriate Inquiries requirements should already account for conditions indicating a release or likely release of PFOA or PFOS.
Evaluation does not automatically mean testing
A Phase I ESA is primarily a research, records-review, interview and site-reconnaissance process. It generally does not include soil, groundwater or building-material sampling.
Evaluating PFOA and PFOS during a Phase I therefore does not mean that every property must be tested for PFAS. It means the environmental professional should consider whether the property’s history, surrounding land uses, regulatory records or observed conditions indicate a potential PFOA or PFOS release.
Relevant historical uses may include certain firefighting-foam applications, airports, military installations, metal-plating operations, landfills, wastewater or biosolids management, and industries that historically used PFAS for stain, grease, water or heat resistance.
The presence of one of these uses does not automatically establish a Recognized Environmental Condition. The environmental professional must evaluate the available evidence, likely release mechanisms, property setting and significance of the condition.
When the Phase I identifies a material data gap or evidence of a potential release, a focused Phase II investigation may be appropriate. That investigation should be designed around the specific property, environmental media, potential source and decision the client needs to make.
Not every PFAS compound is treated the same way
PFAS is a broad family containing thousands of substances. EPA’s CERCLA rule specifically designated PFOA and PFOS, including their salts and structural isomers.
The rule does not automatically bring every PFAS compound into the federal Phase I scope. Other PFAS may still warrant consideration because of state requirements, property history, client objectives or business risk. Those decisions should be addressed during project scoping rather than assumed to apply uniformly to every property.
CERCLA and drinking-water requirements are separate
The CERCLA designation should not be confused with EPA’s PFAS drinking-water regulations.
EPA currently maintains federal drinking-water Maximum Contaminant Levels of 4.0 parts per trillion for PFOA and PFOS. In May 2026, EPA proposed allowing qualifying public water systems to request two additional years until 2031 to meet those limits. EPA also issued a separate proposal concerning the drinking-water regulations for four other PFAS and certain PFAS mixtures.
As of this writing, those actions remain proposed. They do not remove the CERCLA hazardous-substance designation or change the need to evaluate potential PFOA and PFOS releases during appropriate environmental due diligence.
What should CRE teams do now?
For acquisitions, dispositions and financing decisions, project teams should confirm that the Phase I scope appropriately evaluates PFOA and PFOS.
That process should include:
- Reviewing current regulatory information and available PFAS records
- Evaluating historical operations and surrounding land uses
- Considering potential release and migration pathways
- Distinguishing credible property-specific concerns from generalized PFAS risk
- Defining whether additional investigation would materially support the transaction decision
- Confirming applicable state requirements and current screening or cleanup criteria
The goal is not to add unnecessary testing to every transaction. It is to identify credible PFAS concerns early, evaluate them consistently and give the project team a clear path forward.
Phase Engineering helps clients connect environmental findings to the decisions that matter—liability, financing, redevelopment, schedule, regulatory strategy and intended property use.
Talk with our team about PFAS considerations for your next Phase I or Phase II ESA:
https://www.phaseengineering.com/request-a-quote/
