The market signal on that using PFAS is imposes serious liabilities on a company is crystal clear. Even a giant like 3M is in rough waters because it cannot bear the liabilities.
It is common that large public companies deinvest some part of their business that cause bad PR. They usually sell a part of their business to a smaller/more anonymous/non-public company that is prepared to take the liabilities. In this case there is no indication of a possible sale of the 3M plants and a complete closure is the most likely scenario.
A second aspect is that many 3m-customers will be forced to reevaluate the decision to use PFAS. A good example is the usage in firefighting foam. Any producer of firefighting-foam is now fully aware that selling foam which is guaranteed to be released into the environment is a major liability.
There are even proposals to ban end-products that contain PFAS at the EU-level. Lobbying is not fully transparent, but I suspect 3M was one of the last strongholds that lobbied against such regulation.
Today, in many emerging markets environment law is weak or the enforcement is absent today. However, we see that all emerging markets are catching-up. In 5 to 10 years PFAS-producers will face a similar regulatory risk in some emerging markets.
The last element is that the market-share of 3M was huge. It is unlikely that competitors in emerging markets can fill that gap in 3 years.
In the short term, we will see some PFAS-producing companies in emerging markets making record profits because of this decision. However, I think it is unlikely that growth in emerging markets will come even close to filling this gap.
The market signal on that using PFAS is imposes serious liabilities on a company is crystal clear. Even a giant like 3M is in rough waters because it cannot bear the liabilities.
It is common that large public companies deinvest some part of their business that cause bad PR. They usually sell a part of their business to a smaller/more anonymous/non-public company that is prepared to take the liabilities. In this case there is no indication of a possible sale of the 3M plants and a complete closure is the most likely scenario.
A second aspect is that many 3m-customers will be forced to reevaluate the decision to use PFAS. A good example is the usage in firefighting foam. Any producer of firefighting-foam is now fully aware that selling foam which is guaranteed to be released into the environment is a major liability.
There are even proposals to ban end-products that contain PFAS at the EU-level. Lobbying is not fully transparent, but I suspect 3M was one of the last strongholds that lobbied against such regulation.
Today, in many emerging markets environment law is weak or the enforcement is absent today. However, we see that all emerging markets are catching-up. In 5 to 10 years PFAS-producers will face a similar regulatory risk in some emerging markets.
The last element is that the market-share of 3M was huge. It is unlikely that competitors in emerging markets can fill that gap in 3 years.
In the short term, we will see some PFAS-producing companies in emerging markets making record profits because of this decision. However, I think it is unlikely that growth in emerging markets will come even close to filling this gap.