Arq Applauds EPA's First-Ever Definitive PFAS Regulations
- None.
- None.
Insights
The Environmental Protection Agency's (EPA) recent regulation on per- and poly-fluorinated alkyl substances (PFAS) represents a significant shift in public health policy. PFAS, often referred to as 'Forever Chemicals' due to their persistence in the environment, have been linked to various health issues. The stringent reduction in permissible PFAS levels in drinking water suggests a proactive governmental stance on mitigating potential health risks associated with long-term exposure to these chemicals.
This policy change is likely to have substantial implications for industries involved in water purification and treatment. Companies like Arq, which specializes in products like Granular Activated Carbon (GAC), are poised to benefit from increased demand. The GAC market, already experiencing a supply shortage, could see heightened competition and potential price increases as companies scramble to meet the new standards. This could affect the cost structure of water utilities and, ultimately, consumer prices for clean water.
From an environmental perspective, these regulations underscore the growing emphasis on sustainable practices and the reduction of harmful contaminants in natural resources. The long-term impact could contribute to a larger trend towards environmental stewardship and increased investment in green technologies.
The market response to the EPA's announcement is likely to be multifaceted. On one hand, there's an anticipated surge in demand for Arq's GAC product, with projections of a 3-5x increase in the water market. This could translate into significant revenue growth for Arq and similar companies in the short to medium term. The announcement also serves as a positive signal to investors about the potential for Arq's strategic growth initiatives, such as the expansion of their GAC facility.
However, investors should also be mindful of the risks associated with scaling operations to meet increased demand. Delays or cost overruns in the construction of the new facility, for instance, could impact Arq's ability to capitalize on the market opportunity. Moreover, the regulatory environment remains dynamic and any future changes could alter the competitive landscape or demand forecasts.
Analyzing the stock performance of Arq and its peers in the aftermath of the EPA's announcement could provide insights into how the market is pricing in the anticipated changes in demand and supply dynamics. It is also essential to monitor the company's progress towards securing contracts and the impact of these developments on Arq's financial health and stock valuation.
The reduction of PFAS levels in drinking water is a critical public health advancement. PFAS exposure has been associated with a range of health problems, including cancer, thyroid disease and immune system effects. The EPA's action to enforce stricter regulations reflects an acknowledgment of the severity of these health risks and a commitment to protecting citizens.
For the public, the benefits of such regulations are clear: safer drinking water and a reduced burden of disease. However, the transition to compliance with these new standards will likely require significant investment from water utilities and other stakeholders. The long-term health benefits must be weighed against the short-term economic impacts, such as potential increases in water bills for consumers and financial pressures on small water systems.
It will be important to monitor the effectiveness of these regulations in reducing PFAS levels in drinking water and the corresponding health outcomes. This data will be valuable for assessing the return on investment in public health terms and could serve as a model for future regulatory actions on environmental contaminants.
On April 10, 2024, the EPA issued its first-ever national, legally enforceable PFAS regulations, confirming stricter rules reducing permissible PFAS levels by more than
Changes are focused on reducing PFAS contamination in U.S. drinking water, protecting public health and improving environmental integrity
Regulations are expected to drive even stronger near and long-term demand for Arq's solutions, including its unique waste-derived Granular Activated Carbon ("GAC")
GREENWOOD VILLAGE, Colo., April 11, 2024 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (the "Company" or "Arq"), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today recognizes the announcement issued on April 10, 2024 by the Environmental Protection Agency ("EPA") confirming its latest regulations aimed to address contamination by certain per- and poly-fluorinated alkyl substances ("PFAS" or "Forever Chemicals") in drinking water.
"The topic of PFAS regulations has been well discussed. Yesterday's announcement by the EPA makes these regulations official. These regulations pave the way for even stronger demand for our products and solutions, and a cleaner future for all Americans," said Bob Rasmus, CEO of Arq. "EPA's announcement establishes materially higher standards for drinking water across the U.S., driving significant demand for effective remediation products such as Granulated Activated Carbon, while exacerbating the supply shortage already present in the GAC market. In fact, we estimate the implementation of EPA's announced regulations will drive a 3-5x or greater increase in GAC demand solely related to the water market over the coming years."
"We are excited and uniquely positioned to help potential customers meet the materially stricter U.S. regulations just announced," continued Mr. Rasmus. "Our team continues to execute efficiently on our strategic growth project - the construction of our expanded 25 million lb GAC facility at our Red River plant - which remains on schedule to conclude commissioning in Q4 2024. We remain in highly active discussions with potential customers and continue to anticipate entering into contracts for our GAC product well in advance of first production later this year."
Mr. Rasmus concluded, "We are excited about these important updates and expect to see similar regulations globally, further expanding and growing our addressable market."
Arq Releases Latest Corporate Film
Concurrent with EPA's announcement, Arq has released a new corporate film, which sets out its future vision and the Company's transformation to an environmental technology company. The video can be accessed here or at the Company's website at www.arq.com.
Additional PFAS and Regulation Detail
PFAS are a group of industrial chemicals used in everyday products and are often referred to as Forever Chemicals, because of their extreme persistence in the environment. On April 10, 2024, the EPA announced material tightening to an existing framework of regulations relating to the control and limitation of PFAS in municipal water. The regulatory changes are anticipated to phase in over an approximate five-year period. Additional information on the latest regulations can be accessed here.
The EPA has announced a National Primary Drinking Water Regulation (NPDWR) establishing legally enforceable levels or Maximum Contaminant Levels ("MCLs"), for certain PFAS in drinking water. Broadly speaking, the permissible MCL for PFOA and PFOS is being set at 4ppt by the time of full implementation, a substantial reduction from the prior advisory level of 70ppt. For context, 4 ppt is approximately equivalent to 4 grains of sand in an Olympic-sized swimming pool. The newly announced rule would also require public water systems to: monitor for these PFAS; notify the public of the levels of these PFAS; reduce the levels of these PFAS in drinking water if they exceed the new standards.
Together with the new regulations, the EPA also announced nearly
About Arq
Arq (NASDAQ: ARQ) is a diversified, environmental technology company with products that enable a cleaner and safer planet while actively reducing our environmental impact. As the only vertically integrated producer of activated carbon products in North America, we deliver a reliable domestic supply of innovative, hard-to-source, high-demand products. We apply our extensive expertise to develop groundbreaking solutions to remove harmful chemicals and pollutants from water, land and air. Learn more at: www.arq.com.
Caution on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a “safe harbor” for such statements in certain circumstances. When used in this press release, the words “can,” “will,” "may," “intends,” “expects,” "continuing," “believes,” similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. All statements that address activities, events or developments that the Company intends, expects or believes may occur in the future are forward-looking statements. These forward-looking statements include, but are not limited to, statements or expectations regarding: business strategy, expectations about future demand and pricing for our PAC and GAC products and our ability to enter into new markets, the ability to successfully integrate legacy Arq's business and effectively utilize legacy Arq’s products and technology, the estimated costs and timing associated with potential capital improvements at our facilities, financing sources for such projects and potential production outputs thereafter, expected market supply of GAC products and the cost savings and environmental benefits of our GAC products, and the timing and scope of future regulatory developments and the related impact of such on the demand for our products. These forward-looking statements involve risks and uncertainties. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, the Company’s ability to maintain relationships with customers, suppliers and others with whom it does business and meet supply requirements, or its results of operations and business generally; risks related to diverting management’s attention from the Company’s ongoing business operations; changes in construction costs or availability of construction materials; our inability to effectively manage construction and startup of the Red River GAC Facility or Corbin Facility; our inability to ramp up our operations to effectively address recent and expected growth in our business; the timing and cost of capital expenditures and the resultant impact to our liquidity and cash flows; our inability to obtain required financing or obtain financing on terms that are favorable to us; the ability to meet Nasdaq’s listing standards following the consummation of our acquisition of all the subsidiaries of Arq, Ltd.; opportunities for additional sales of our activated carbon products and end-market diversification; the Company’s ability to meet customer supply requirements; the rate of coal-fired power generation in the United States; timing and scope of new and pending regulations and any legal challenges to or extensions of compliance dates of them; impact of competition; availability, cost of and demand for alternative energy sources and other technologies; technical, start up and operational difficulties; competition within the industries in which the Company operates; loss of key personnel; ongoing effects of the inflation and macroeconomic uncertainty, including from the ongoing pandemic and armed conflicts around the world, and such uncertainty's effect on market demand and input costs, as well as other factors relating to our business, as described in our filings with the SEC, with particular emphasis on the risk factor disclosures contained in those filings. You are cautioned not to place undue reliance on the forward-looking statements and to consult filings we have made and will make with the SEC for additional discussion concerning risks and uncertainties that may apply to our business and the ownership of our securities. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this press release. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise. The forward-looking statements speak only as to the date of this press release.
Source: Arq, Inc.
Investor Contact:
Anthony Nathan, Arq
Marc Silverberg, ICR
investors@arq.com
FAQ
What is the impact of the EPA's new regulations on Arq's products?
What is Arq's response to the EPA's announcement?
When is Arq's expanded GAC facility expected to be operational?
