3M to end ‘forever chemicals’ output at cost of up to $2.3 billion

Dec 20 (Reuters) – US industrial conglomerate 3M Co (MMM.N) on Tuesday set a 2025 deadline to stop producing PFAS, the “forever chemicals” used in everything from cell phones to semiconductors which have been linked to cancers, heart problems and low birth weights.

Perfluoroalkyl and polyfluoroalkyl substances (PFAS) do not break down quickly and have in recent years been found in dangerous concentrations in drinking water, soils and foods.

3M’s move comes amid rising legal pressures over damage caused by PFAS. Last month, 3M and DuPont de Nemours Inc (DD.N) were among several companies to be sued by California’s attorney general to recover clean-up costs.

Pressure to stop producing the chemicals has also increased, with investors managing $8 trillion in assets earlier this year writing to 54 companies urging them to phase out their use.

“3M has been facing a raft of litigation that has prompted the move,” Victoria Scholar, head of investment at abrdn’s Interactive Investor, said of 3M’s deadline.

Investors were increasingly prioritizing environmental concerns and other chemical makers were likely to follow 3M’s example, she added.

3M said its current annual sales of manufactured PFAS are about $1.3 billion with estimated earnings before interest, tax, depreciation (EBITDA) margins of about 16%.

The sales figure works out at about 3.7% of 3M’s 2021 group revenues of $35.4 billion.

3M expects related total pre-tax charges of about $1.3 billion to $2.3 billion over the course of its PFAS exit.

In the fourth quarter, it expects to take an estimated pre-tax charge between $0.7 billion and $1.0 billion, primarily non-cash and related to asset impairments.

In August, the Biden administration said it will propose designating certain chemicals forever as hazardous substances under the US Superfund program.

DuPont said it was limiting the use of PFAS to “essential industrial applications” and working with customers to pursue alternatives.

Five European countries – Germany, the Netherlands, Denmark, Sweden and Norway – have been working on a proposal to restrict the use of PFAS, which they plan to put forward by January.

Two scientific committees within the EU’s European Chemicals Agency are due to issue assessments of possible restrictions of PFAS in firefighting foams in March next year.

Reporting by Aishwarya Nair in Bengaluru; additional reporting by Simon Jessop in London, Amruta Khandekar and Ruhi Soni in Bengaluru, Ludwig Burger in Frankfurt; Editing by Shounak Dasgupta, Shailesh Kuber and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.


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