a shift from traditional, somewhat outdated waste disposal methodologies, and then move to destruction technology, where the contaminants that we've talked about earlier today are actually no longer transported from company to company, location to location. Traditional methods such as incineration, landfills, land application, that's been where I think most of these organizations have focused on managing these waste streams. But as we look forward into the future, we understand that that's simply moving the problem from one place to another, and none of those solutions are effective at destroying PFAS. So what AirSCWO—what 374Water's proprietary technology, AirSCWO, is able to do, it's able to destroy these organic waste streams in a way that meets EPA standards or more, and it provides a solution that doesn't continue to perpetuate the issue.
Our technology is designed to augment existing the waste stream management processes that are in place, or we could also replace it. It depends on the individual use. A brief history of 374Water. I think the message that we wanted to share is that we're not a brand-new company. We've been around in various forms since two thousand and eleven. Originally, coming out of Duke University with support from the Bill & Melinda Gates Foundation. The company spun out of Duke and ultimately went public in 2021 through reverse merger with PowerVerde and was uplisted to the NASDAQ in 2022 . An important point to mention is that also in 2021, we formed a strategic partnership with the Merrell Bros. . They're the third-largest biosolids waste transportation and treatment company in the United States.
What that partnership allowed us to do was to develop our technology on-site in their headquarters location in Kokomo, Indiana. That helped us get our technology to a place where we've been able to scale and produce very important results, demonstrating that this is a reliable, sustainable technology. As Rosemary mentioned, I joined the organization, along with our CEO, Chris Gannon, in the spring of twenty twenty-four. We're brought in to bring the organization to a commercial scale, professionalize the business, and position ourselves for very significant growth. So what is AirSCWO? You know, I think we talked briefly about supercritical water oxidation, and I'll touch on that briefly. I think we've all learned in our high school chemistry classes that there's three stages of water.
You know, we understand there's ice, there's liquid, there's gas, but there's a fourth stage of water, and that stage is reached once you achieve 221 bars of pressure and 374 degrees of heat. Our technology is actually operating closer to six hundred degrees. And under these high-pressure, high-heat conditions, as I said, our technology is able to destroy these organic contaminants. So how does it work? Well, we'll go into all the details of the technology here, but we do have a grid, a graphic here that shows the concepts. And what happens is, if there's an organic waste that we can suspend in liquid, it can be taken into the system, along with ambient air, and then that's combined with heat into our reactor. And so, you know, we talk about a reactor. It's not a nuclear reactor.
It's not something that's dangerous. It's basically a chamber for high heat and high pressure. Through that process, the contaminants are destroyed, and then coming out of the back part of the system, there's a separator that produces water, some mineral effluent, inert minerals, some vent gas, and a lot of energy. This is an exothermic reaction. So why is that important? Well, we often get questions about: Well, what does it take to run the technology? We're able to use the heat generated through this process to power our system, and then longer term, we're able to use that energy to either go back into a plant or a facility or ultimately into the power grid. Materials that are able to be destroyed by AirSCWO are a vast range.
You know, as I've mentioned, our system is able to destroy organic contaminants, and that ranges from biosolids, which is where our company has spent a great deal of time in research and development in that space. We have contracts with the City of Orlando and Orange County Sanitation, and a lot of our development efforts have been on that specific waste stream. Again, in partnership with the Merrell Brothers, who are interested in creating a way destroying the contaminants in the waste streams so that land application is a safe and effective disposal methodology. We're also in conversations with a lot of organizations dealing with issues around landfill leachate.
We also understand that there's while there's IX and GAC are solutions to treat wastewater, the contaminants still remain in those products, and ultimately, those methods are not destruction. Whereas if we're able to grind up those components, suspend them in liquid, we can take them into our technology again and create a destruction of the contamination. We're talking with a lot of organizations about the firefighting foam that was mentioned earlier today. That's a real problem across all of the different verticals we're addressing. That waste is stored in airports and facilities, industrial facilities around the country, and there's millions of gallons that needs to be addressed. We've had conversations with numbers of industries, whether they're in the food service space or the pharmaceutical space. These industries are producing very beneficial products for our society.
However, that production process is sometimes not so good on the back end. It produces unwanted contaminants. So things like pharmaceutical industry, electronics, and battery manufacturers, well, those are great for the environment in terms of reducing the carbon footprint. They create a toxic waste stream. And our technology, as long as it's organic, we're able to address that. That helps us think about our market, and so I wanted to touch briefly on the market opportunity. We're looking at a global market opportunity of approximately $250 billion. I think the data is still coming out on how big the market is. The more research that's done, I think the more we see this as a tremendous opportunity. We're focusing here in the United States, in the short term, because this is where we're home.
We can deploy easily. We're growing our technology, and we're driving towards commercial scale, and we think about this in terms of the, as I said, the municipal, the federal, and the industrial and commercial marketplace. The thing that's, I think, really amazing to all of us in the organization is that we are just at the tip of the iceberg, and we look at our contracts, we look at our conversations, we're able to identify by named account already $1.6 billion of pipeline. Now, that pipeline also includes contracts that I've mentioned with Orange County Sanitation, as well as the City of Orlando, and some Department of Defense demonstration contracts. These organizations understand the power of this technology, and they're partnering with us as we go through the development process to effectively demonstrate that we can provide a solution.
When we think about the municipal market alone, there's approximately 16,000 municipal wastewater treatments across the country. They're all dealing with this issue. The federal government, whether it's Department of Defense, Department of Energy, the FAA, all of these organizations are saying, "We've got to do something about this problem." And so as we look at our business, we also are just starting to scratch the surface in the industrial market. 374 Water, again, coming out of Duke, was focused on the biosolids area, but we know there's broader issues, particularly with the rapid emergence of PFAS and PFAS regulation, where we can provide a solution for a wide range of companies.
And also, when we think about how we want to address this problem, we also know that underlying all of these different verticals are the TSDF facilities, your treatment, storage, and disposal facilities. These companies have facilities. They have locations in all 50 states, and they're taking in waste streams across all of these different verticals. Our organization is in partnership conversations with many of these companies because they're looking to also not continue to pass the problem down the line. This would be, for us, a revenue-sharing opportunity. It allows us to be part of the solution on-site with these facilities and many of these organizations that can widen the range of waste that they're able to take in. Let's talk a little bit about how we go to market.
When we talk about our AirSCWO systems, the company has been focused on, and I should step back. We think about these in actually very simple T-shirt sizing, right? Small, medium, large, extra large. The reality is we focused our development in our smaller and medium-sized units. These are units that are coming to scale. We actually have recently deployed our six-ton metric ton per day unit to the city of Orlando, and we've actually just announced this morning the system is up and operational, operating at scale in Orlando. Now, this is a unit that was designed to be mobile, right? We understand that many of the organizations we're talking to across our verticals, they may need the solution in a number of places. And so the six-ton unit is in. You see this in this picture.
It's designed in a shipping container, can go on a, you know, get hauled by a semi-truck, can go to a site. It can process, but it is a larger system. Because we've heard the needs of our customers looking for a more rapid response, we're making additional investment into our small, or what we call our one ton per day unit. That's a very highly mobile, flexible unit that could be rapidly deployed and rapidly installed to either partner with an industrial, or military government contractor or a, a entity. We can provide a quick solution, whether it's demonstrating our capabilities or our vision is longer term. If there's an emergency need, we can provide a, a quick solution. So those units, again, they're currently in containers.
Our research and development efforts are also focused on modularizing these units, and that's because when we think about the different types of waste streams that we're looking to address, there's different intake methods that each different stream requires. That also allows us to be faster at maintenance and deployment of the units when they're in a modular solution. They still can be deployed through a container, but they can actually, we can actually make them more efficient. Longer term, starting in 2025, we will begin development on our larger units, right? I think when we think about the volume of waste and the issues that we need to address, a six-ton per day unit, well, one of the largest available today...
The 30-ton unit is the next iteration, and that's a more likely unit for our industrial and commercial market. Then longer term, as we continue to scale, the 100-ton per day or 200-ton per day units are where we see the needs in the municipal and larger industrial customer markets. These are units that will be bespoke, designed for individual applications. And so those will be likely installed in buildings as part of infrastructure.
In our conversations with our partnerships with Orange County and Orlando, they've been very frank that their goal is to invest in this technology, ultimately replacing their existing technology with. Their hope is that we all can develop together and commercialize the AirSCWO system, and it would likely be, because of the volumes of waste that's produced, it will likely be multiple hundred or two hundred ton per day units. The other thing to mention is, you know, while we are focused on these units and being able to deploy them, we also operate a lab facility in the Raleigh area in North Carolina.
Because of the demand in this space, we've actually invested in, over more than doubling the size of our lab today, and we're in discussions with many large industrial players across the country to do initial testing and demonstrate the effectiveness of our technology to address their problems. Skip that. To conclude, I think that, you know, I think we all understand the issue, the PFAS issue that's in front of us. What 374Water is able to do, with the regulatory tailwinds, increasing focus on this area and the ultimate risk of litigation, this is a problem. The train has left the station. We're rapidly developing our technology to commercial scale so that we can be part of addressing this issue.
We are flexible, we are able to be customized, and ultimately, as we invest in our manufacturing and engineering capabilities, positioning the company to be part of the solution for the future. So with that, I think we get questions?
Sure. So thank you. Thank you, Deborah. It was really very helpful. Can you, you talked about putting the sludge, right?
Mm-hmm.
That would be the biosolids-
Yes.
-through a system under high temperature and high pressure. What comes out of it? Because you talk about destroying and reusing-
Yes
-whatever comes out. Can you help us understand what happens at the end?
At the end of it. And I may have Steve chime in as well. At a basic level, this is such a good question. As we're talking with potential customers and investors, it's sometimes hard to get your head around that this really messy, icky stuff comes in the front end. And what comes out, it's water. You probably wouldn't want to drink it. You'd need to do a little additional filtration before you put it in your glass. But it's water, it's inert base minerals, vent gas, which does contain a little CO2, which can be sequestered, and energy. It's really that simple.
I think when you see the technology at work, it's really amazing, and you kinda wanna lift the unit up and say, "Okay, where's the magic happening underneath it?" Because this is the concept of total destruction. What comes out are safe materials that could be, I mean, not that you would, but you could throw it in the trash can, 'cause it doesn't perpetuate the contamination.
Steve, do you want to elaborate?
Yeah.
You got it?
Yep.
All right. So you are still in the development phase, and I think you joined the company, you and Steve, and Chris, I'm sorry, the new CEO, in order to develop the commercial side of that particular product line, if I can call it that.
Yes.
How do you see this happening, and how much do you need to invest in order to get to what is going to be a profitable business?
Again, that's such a good question. I will say Steve has been with the business three years. About three years. Chris and myself were brought into the organization, and Chris was hoping to be here. He is actually based in San Francisco. Chris brings experience in the wastewater space, previously the CEO of a company called Energy Recovery. The board had looked at the business and said: We are at a point with technology development where we want to position the organization to very rapidly scale. The commercialization PAC we anticipate is to be at our, what we consider true initial commercialization, is probably 12-18 months. Over the past 6-12 months, we've made rapid strides in our Kokomo, Indiana, facility on-site with the Merrell Bros.
But in the late spring, early summer, we reached a place where we were comfortable deploying that technology into a commercial environment with the city of Orlando. So we actually have actually been brought in as well. We recognize we will need to raise additional capital. Our objective is to actually double the burn rate of the company. The investments will be in engineering talent, building additional units for deployment for existing contracts and partnerships that are in discussions, as well as developing and building additional units for further acceleration of our research and development efforts. So we know when we look at all of this, we see ourselves right on the verge of really being able to provide solutions.
We are looking to increase revenue in 2025, rapidly growing in through 2026, and our objective, based on our current modeling, is to move to cash flow positive in 2027.
...so there is a number out there, I think it is $26 million in revenues for 2025. Are the expectations-
In that range.
At least based on-
Yeah.
Whatever number has been published by someone?
Yes, someone.
So at that particular level, you are still losing money?
Yes, um-
And so how-
Yeah, this is such a great question because we want to continue investing. You know, and I think when you're out, you're in the markets, you hear those, the stories of hockey sticks, and you always look at those a little skeptically, right? Everybody's got the story: We're gonna have this wonderful, huge ramp. When we step back and we look at the data, we believe it's real. What we've covered this morning, also, we understand the market is there. And the reason for to take the time to profitability is to position the company correctly with the R&D efforts, to make sure we've got the technology that can rapidly scale. So that's why we believe it's another two-to-three years to cash flow positive.
Okay. And, you talked about focusing on the sludge side, and you also gave us a market valuation potential of 250 billion. I think it was billion, right?
It's global, global opportunity.
Global. At the moment, the US seems to be the first one with actual regulations. The rest of the world is coming. Do you have a number for the US? And then, because you are focusing only on the sludge side, do you have a feel for what that market size is? And then we move on to the water side. Is that something that you can also handle in your product line?
So a few questions there. And I should also add, while we've done most of our research and development has been focused on the biosolids side, we have been doing research in the additional waste streams, such as GAC, IX, AFFF, the other waste streams that we've identified. And that's where we actually have some contracted demonstration tests with some entities in the federal government space, which we are anticipating completing in the near term, within the next six to 12 months. Again, to demonstrate the range of technology that we're able to deploy. So when we think about, you know, how we go out and address these areas, the, the...
Kind of, we think about it is if we can suspend the organic contaminant in a fluid, and again, it requires some concentration levels. There's, and you can't if it's too thick, it'll clog, and we need to get it to the right consistency to go through the system, then it is something that we can process, so I-
And the size of
Oh, the size of the markets.
Yeah.
Yeah.
In the U.S.
Yeah.
I can speak to that just for a moment, just to give some sense of scale. So, you know, if you'll separate those three categories. So on the municipal side, for example, we did an analysis for one of the members of Congress in North Carolina on what would it take to clean up PFAS in this part of the state, and it was more or less a third of the state. And it was, you know, a little back-of-the-envelope, but it was $1 billion. You know, if you have four parts per trillion is the maximum contaminant level for drinking water, most water utilities are, you know, probably not far from that number, right? And the data is still coming in, and it's gonna take-
Mm.
time for that to get finalized, right? But, you know, the scale of remediation required across the country at water utilities, and then separately, the wastewater treatment plant space, which is where we're starting in the sludge world.
Yep
... is really big. EPA has not set its rules, its regs on the biosolids and sludge-
Yeah
-side yet. I think some states, like Michigan, are starting to set certain parameters that they think EPA should follow. On the federal side, on the Department of Defense side, for example, there's 715 sites DoD has identified, and one, I think Pease, New Hampshire, has gotten the most money so far. They're just starting, and that's $400 million dollar appropriation. You know, is every one of those sites a $400 million dollar appropriation? You know, I don't know, but you, you-
Mm.
Can just kind of get a sense of the scale. On the industrial and corporate side, you know, companies, they're not out letting people know how much PFAS destruction they might need. But, for example, one of the oil and gas majors we were speaking with said they had 800,000 gallons of firefighting foam that needs to be destroyed. So, you know, the variety of markets and submarkets is very big and growing.
Any questions from the audience? Yes. In front. Oh, yeah.
Where is it located? Where is the AFFF, the foam, where is it located? How do you, how do you get to it? Is it like... Do you have to go there and grab it? I mean, are you sure?
Yeah. So, the aqueous film-forming foam, or firefighting foam, AFFF, is used, has been used ubiquitously on airports, firefighting training facilities-
Yes
... at many Department of Defense installations, and in just as precautionary measures in many industrial manufacturing operations. You know, the whole petrochemical corridor in Texas, there's AFFF all over the place. Because it will put out, you know, hydrocarbon fires, fires from oil and gas. And so they're in tanks, they're in drums, they're in all sorts of variety of packaging. And so it's a logistics challenge-
Yeah
... you know, to figure out how do we put, you know, pick consolidate that, not spill anything, and get it to the right places for disposal. And so the Army Corps of Engineers has issued the first AFFF replacement and disposal contract for $800 million out of Huntsville. And so, that's the first of you know many future disposal contracts.
We have another question from the audience.
Yeah. Excuse me, can you talk about the cost of disposal?
Sure.
What do you expect in the long term?
Cost of, yeah, cost of disposal. We are actually. When you look at the total cost of destruction and what we're seeing these conversations around cost evolve to, is traditional methods look at a, you know, a dollar amount per gallon or per ton sort of an approach. The calculus is changing because of the risk conversation. Comparable organizations, whether it's, you know, a governmental municipal organization or the industrial organizations, they're seeing the litigation, they're seeing large settlements, and so they're taking all of that cost into consideration. We are cost competitive with traditional methods, particularly when you start thinking about risk mitigation down the road. It is a little challenging when we think about an actual apples to apples, because our destruction technologies, it's just, it's not the same as dumping something in a landfill.
But looking at our total cost of management destruction, we are a competitive solution.
If there are no more questions, I want to thank you for a very enlightening presentation. Looking forward to following the progress of 374.
We're excited.
Thank you.
Thank you for the opportunity.
Sorry. Thank you so much. And I will now give the podium to Wayne Pinsent , who is going to introduce the management of Arq.
Okay. Yeah, it's right here. All right, next up, we have Arq, Inc., ticker ARQ. Joining us is CEO Bob Rasmus. Bob joined as CEO in July of last year and has extensive experience leading organizational strategy, investments, as well as mergers and acquisitions in multiple industries prior to joining Arq. Also with us is CTO Joe Wang. Joe has been with the Arq portfolio company since 2011 and has over 35 years of experience in R&D. Arq, Inc., formerly known as Advanced Emissions Solutions, is headquartered in Greenwood Village, Colorado. It's primarily engaged in the sale of consumable air and water treatment options, including activated carbon. Through its acquisition of Arq in early 2023, the company significantly increased its capabilities in granular activated carbon for water treatment and energy transition in higher growth markets, including applications for PFAS remediation.
Company is vertically integrated and has ambitious CapEx plans to transform its business from legacy markets with long-term secular headwinds to high growth water treatment solutions. ARQ has around 42 million shares outstanding, following a secondary offering last week, closed at $5.47 for a $230 million market cap, pro forma net cash of around $31 million for a $198 million enterprise value. And with that, I'll turn it over to Bob and Joe.
Thanks, Wayne. Let me get the. Pleased to be here today. A lot has transpired in the last 12 months since we spoke at the first PFAS symposium, and certainly in the last 13 and a half months since I took over as CEO. Today, I want to give a quick overview of Arq for those who may not be familiar with it. Then I want to turn it over briefly to Joe, our Chief Technology Officer, to talk about the improvements and advancements we continue to make in increasing the efficacy of our product. And then I want to talk about our corporate transformation, what we're doing, why we're doing it, how we're doing it, and where we are in that process.
You're all familiar with the usual disclaimer, so I'm going to skip right over that, on that. So at Arq, we're a diversified environmental technology company. We like to say the products we make reduce or even reverse, harmful environmental liabilities, like PFAS or the forever chemicals we're talking about. Our tagline we like to talk about is that we say our products make the air we breathe, the water we drink, the soil our children play on, safer, cleaner, and healthier. Quick overview of the company. We've been producing activated carbon at our Red River, Louisiana plant, which I'll refer to frequently as our foundation asset, since 2008.
We have a strong customer and asset base, and we have a wide variety of patent and patent applications covering a variety of technology, and most crucially, that we have the patent on the technology to convert bituminous coal waste into granular activated carbon, and I'll talk about why that's important in a second. We believe we have approximately 23% market share in the North American activated carbon market. We are the only public company involved in a domestic basis, US company in terms of activated carbon. I mentioned our unique patent as it relates to converting bituminous coal waste into granular activated carbon. That was acquired with the acquisition of Legacy Arq in February of 2023. Our Corbin, Kentucky facility sits on the site of a former U.S. Steel bituminous metallurgical coal washing plant. We take the fines or the waste that U.S.
Steel was not able to utilize when it was operational. We process that waste, and we use the resulting product to create granular activated carbon to remediate other waste. So essentially, we get two bites at the environmental or green apple, in addition to the cost and carbon footprint savings we have versus our competitors who are mining virgin coal. We have the only fully integrated domestic supply chain. That's important for scalability reasons, product certainty, product availability, cost reasons, as well as helping us qualify for the Build America, Buy America, which many of our customers do have those requirements. And we're in the process, as I mentioned, of transforming the company from an industrial manufacturing company into an environmental technology company, from producing solely powdered activated carbon to expanding that foundational Red River, Louisiana plant to be able to produce granular activated carbon.
That's important because the granular activated carbon market is a growing market, and it's an undersupplied market with very attractive and compelling investment economics. I'm going to skip the next slide because I'm going to assume you all know what activated carbon is or you wouldn't be here. If you would like a refresher, I'm happy to provide, and Joe is as well, answer questions subsequent to that. In terms of our product suite and our product applications, the existing powdered activated carbon, it's more of a commodity business with more varied feedstocks. Our products are primarily used in the power generation business. We believe we have a leading market share and scrubbing mercury emissions from coal-fired power plants.
We've also expanded in the last twelve months into adjacent markets, such as potable water, improving the taste and odor, as well as waste to energy, as well as cement. Those adjacent markets also carry a higher average selling price and higher margin. On the granular activated carbon side, we've obviously targeted the municipal market for PFAS remediation, but also the renewable natural gas or the biogas market is a very important segment for us as well, because all of that needs to have the sulfur and other contaminants scrubbed before the gas can enter into the pipeline grid, and granular activated carbon is ideal for achieving that. Excuse me.
We're also looking at other soil and water remediation, removing, someone asked earlier, removing the firefighting foam or the de-icing fluid that's leached into the soil, injecting that in granular activated carbon into the soil to capture those contaminants before they reach the existing water stream and water system. I mentioned the granular activated carbon market is undersupplied and growing. That's why it's such attractive economics for us, and why one of the reasons, besides the fact that we can get into that market cheaper by expanding our foundational Red River, Louisiana plant, but that we can get market share, not by having to take it from someone else, but through the normal growth in the marketplace. That clearly there was an undersupplied and excess demand. That was even before the EPA regulations turbocharged investor interest and customer demand on that.
But as real as the problem is for PFAS remediation, with limited viable solutions, it's far from the only area of substantial demand growth as it relates to granular activated carbon. Our internal estimates said that at 2023, roughly 170 million pounds of granular activated carbon was utilized in the treatment of municipal water. To meet the current EPA regulations, we anticipate that a minimum of three to five times or 500 to 800 million lbs of additional capacity will be needed to meet the EPA regulations. That's over and above the existing 170 million lbs of demand. In addition, another outside research report estimated that the dollar value of granular activated carbon, solely for use in treating municipal water for PFAS remediation, is going to increase by 10 times between now and 2030.
With that, I'd like to turn it over to Joe briefly before I reassume the podium, and Joe is going to talk about what we're doing in terms, as I mentioned, of improving the efficacy of our product. I'm very fortunate, as I mentioned last year, to have Joe as a key position on the executive leadership team. Joe has forgotten more than I will ever know in terms of activated carbon and technology. With that, I'll turn it to the really knowledgeable man.
Thank you, Bob. Okay, it's been a very busy year on a technical front for us. And we all know that activated carbon, granular activated carbon, is a known technology for removing PFAS. What we have done over the past year is actually focused on improving the characteristics and the utilization of granular activated carbon. And we know that granular activated carbon is focused on the separation and concentration of the PFAS from the water so that we can remove it from exposing folks, and then we will partner with other technologies for destruction, reactivation, and things like that. Okay, so, but it's a big task to really separate and concentrate from what I almost call infinite dilution. You're at parts per trillion, which is a very low amount.
So, let me, let's talk about what we've done here. We've focused on, I wanna talk about four areas that we focus on. There's a myriad of areas we could, we are working on, but these are the four in the past year, which are very, very important. The first is accelerating the market adoption of the activated carbon, of the granular activated carbon. And this is not, we know that granular activated carbon works, but accelerating the adoption is focused on improving certain properties and performance, okay? So I'll talk a bit about some of those performance attributes that need to be improved. The second is I'll talk about how our granular bituminous feedstock and our updated re-agglomeration process has really increased the treatment efficacy of the granular activated carbon.
In many cases, we've seen up to 10 times more effectiveness in removing the PFAS molecules from water as opposed to the current granular activated carbons available. The third area is increasing not only the capacity, but the speed of removal. So I'll talk a bit, a little bit of science around how we increase the speed of removal. And then the last area, the fourth area I'll talk about, is enhancing the granular activated carbon's purity. We purify our, we use purified bituminous waste, and that has really helped us reduce the leachability of certain metals, and in particular arsenic into the drinking water during the treatment process. Okay, so those are the four areas I'm gonna focus on. Let's start off with the building market adoption.
This is an area that is really important. We've taken lab concepts, we've looked at past technologies for making activated carbon. We looked at the uniqueness of our raw material, and we were able to simulate a manufacturing process in our lab and rapidly prototype different properties, different properties and factors in our granular activated carbon. So the first step really is doing the lab work and doing the lab modeling and going to the market, working with the commercial team to target what we call lead adopters. So lead adopters are folks that we collaborate with. They're major folks, customers in the industry that have a reason to collaborate with us. So we have over 20 market lead adopters. These are significant relationships.
This is not just sending a sample over the fence and say, "Does it work? Doesn't it, does it not work?" This is a full-blown collaboration where we work and iterate and prototype different granular activated carbons and different properties and increase the efficacy specific to that customer's needs, okay? Then we move to what we call lab rapid small-scale column testing. Some folks use that, some don't. We do. So it's a good way to go from a laboratory to what I call a dynamic system that is a preview to what's gonna happen in the field. We have worked with universities, third-party labs. We have also developed the rapid small-scale column testing within our own labs, and this has allowed us to validate the lab performance, and it also begins to tie, draw a tie line to the field, okay?
That's ongoing work there. And then ultimately, we've got some pilot column field testing. These are 100- and 200-lb samples in columns, working with service providers, working with specific customers, and this is really where the rubber meets the road, where you're taking a slip stream, or you're taking a natural stream, and you're processing it, and you're tying in all the lab and rapid small-scale column testing, and you're validating the pilot column testing. We've done over 18 tests here, and there's more to come, okay? During this phase, our commercial folks also are very involved, and it allows us to rapidly go from a scientific, technology-driven activity to a very commercial activity that has led us to pre-contract a lot of our volume, because the success of these pilot tests has been very positive for us, okay?
This is the pathway to what I call full-scale adoption. This is a really well-run process and very active, okay? So, we've done a lot of work here, and it just validates that the raw material that we have is very unique, very tunable, and the activation process, the making of the activated carbon, is very efficient. Okay? All right, I'm gonna move to the next area, which is really around increasing treatment capacity. This is a typical scientific curve that you, you'll see from industry testing. On the y-axis, you have breakthrough, which is in parts per trillion, and then on the x-axis, you have bed volume, the amount of water treated. So the lower the data points to the right, the better. That means more water treated with less PFAS coming out of the columns, okay?
So, if you look at the green dotted curve, this is a standard industrially available granular activated carbon. This is for PFOA. The dosage is at a hundred parts per trillion, and so you start off at zero bed volume on the x-axis, and you start marching to the right. You start filling the column with water, and you start displacing what we call bed volumes, okay? As you see, the red line is the four parts per trillion maximum contaminant level defined by the EPA for PFOA. As you look at the carbons in the green, which is the industrial, versus the blue, which is the Arq granular activated carbon prototypes, we see that we're able to start treating more water and at lower concentrations of the effluent. There are properties in this raw material.
There are things that we could do in the activation process to really effectively improve the capacity of the activated carbon. In this case, in this example, we've improved the capacity of the granular activated carbon at four PPT, which is the MCL, about 10 times. 10 times more treated water. Okay, if you're doing a lead lag, two columns, then you might wanna have the first column go to 70 parts per trillion, which is the yellow line. So once again, you can improve the capacity. In this case, we've improved the capacity or the bed volumes treated by twice. So this raw material that we're using is very tunable. Our activation, activated carbon process is very tunable also, and it gives us just significantly enhanced efficacy, okay? All right, the third area is increasing removal speed.
So, on the y-axis, once again, we have residual concentration, and on the x-axis, this is the contact time. So in the green shade, that's the area that most activated carbon columns are operated at, and the green is the industrial. So what we want right here is, we want to lower the concentration at the earlier time. So lower left is where you want to be very low in concentration. So what we've done is that we've modified the properties of our granular activated carbon to be at least up to two times faster in adsorbing the PFOA contaminant. And what that means is that you can actually either treat more water, or you can have a smaller equipment. If you treat more water, you have less column changeover requirements.
So once again, our raw material, our unique raw material, our unique activated carbon process, allows us to really improve the efficacy of our carbons, okay? The last area is purity. So this is an area that is really, really important. Activated carbon is made from different raw materials. If you use coal, naturally, it contains some metals. And so those metals, if they're too high, they end up leaching in the water. So the federal drinking water requirement specifies that the arsenic level, in this case, needs to be below 10 parts per billion for treated water. So once again, we have the industrial bituminous carbon in green and the Arq carbon in granular activated carbon in blue.
We have BV, bed volumes on the x-axis, and we have concentration in parts per billion of arsenic. So the lower to the left is better, okay? So, for example, when you load up a column, the user will pre-wash the column to flush out any residuals and dust. And in this case, the industrially available granular activated carbon requires six bed volumes to wash out the arsenic to less than ten parts per billion. And then, the Arq granular activated carbon only requires two. So once again, that's due to us using a purified feedstock, and it allows us to have very low arsenic levels, okay? So anyway, just a lot going on on the technical front.
I think that, there's also opportunities to partner with, ion exchange, clay mineral providers to really do the separation and concentration, and of course, the destruction and regeneration are other things we need to be working on. Okay. Thank you.
Thanks, Joe. I'm gonna tell you all, I'm gonna talk really fast, not just because I'm excited about the opportunity, but Joe took more time than we anticipated on that. We got a lot to cover, and I want to leave some time for questions as it relates to that. So I'm gonna talk a little bit about the growth aspect of it, as I say, how we're positioning ourselves. As I say, I think we're extremely well-positioned. Obviously, I'm biased, but our foundational path business allows us the low cost, low risk entry point into the granular activated carbon business, which, as I say, is growing in high margin.
When I say low cost entry point, we're gonna spend roughly $75 million to expand granular activated carbon production to be able to produce 25 million pounds of granular activated carbon, roughly $3 a pound. We believe it would take $7-$8 a pound for somebody to do a greenfield expansion from scratch. In the last 13 months, we've transformed that foundational PAC business from a money-losing business to a net cash contributor in 2024, 2025, and beyond. We've done it through no magical elixir, no magical potion, through basic blocking and tackling. We've done it by eliminating loss-making contracts at the beginning of 2023, that approximately 24% of the contracts by volume were negative gross margin. I can't even believe I have to say that on that. We've eliminated all of those.
We have one remaining, less than 2% on volume. That expires December 31 , and we have already renewed that for subsequent five years at profitable margins. We've paid attention to cost as well. When I recently met with the operating team, I met with, threw a bunch of pennies on the ground beforehand, asked who picked up pennies, who raised their hand. Nobody did. Who'd pick up a million dollars? Everybody raised their hand, and I said: "Every penny reduction in our operating cost is a million dollars almost to our bottom line." You got to pay attention to pennies. You got to pay attention to details as it relates to that. And we've also done it by expanding into adjacent markets, like I mentioned, which carry a higher average selling price and consequently higher margin. I talked about the granular business.
We're in the process of expanding Red River to produce 25 million lbs of granular activated carbon. This is the first of a multi-phase expansion that we can expand at our option, up to 125 million additional pounds of granular activated carbon. This will be additive to our production capability, the first 25 million lbs at the Red River, Louisiana, facility, and it's very compelling economics. Granular activated carbon pricing is a multiple of PAC pricing. Does it cost more to produce granular versus PAC? Yes. Does it cost a multiple? No. Then the best example I can give is that we believe on an EBITDA basis, it's a three-year or less payback in terms of the investment we're making in building granular activated carbon capability. I talked about the transformation of the company. We had 24% revenue growth last quarter, year-over-year.
We have had five consecutive quarters of double-digit average sales price increase on that. Our gross margin increased by seven hundred basis points. It would have been more than double that, but we chose to shut down the plant to bring forward our typical biennial plant maintenance to this year from next year, because we were gonna have to shut down the plant to be able to tie in the granular expansion, and that way, we get the full benefit of expansion next year on that. Wayne mentioned the cash. We ended the quarter with $37 million in cash, $28 million of unrestricted cash. We raised $28 million in equity. I'll talk about that in a minute. So we are very well positioned from a cash and an asset standpoint to be able to fund all of our expansion activities.
Speaking of capital and funding, you obviously, as I just mentioned, you may have seen, we did a secondary offering last week. You're probably wondering, Bob, you said on your earnings call, you're gonna fund this with debt. You had a term sheet, and you weren't gonna sell equity. You sold equity. What the heck happened? Maybe stronger language, as it relates to that. But here's the reality of the situation, as we got into the term sheet negotiations with the lenders, the terms became more onerous in terms of coupon. They started asking for warrants, and most importantly as well, they had onerous non-call and prepayment premiums. When we get involved, and once we're fully up and running in the first quarter of next year, in terms of granular activated carbon, we're gonna kick off tremendous cash generation.
To us, it wasn't the right use of the balance sheet, and so we did an extensive analysis, and it showed by issuing shares, it was vastly accretive versus the debt alternative, and also better positioned us to be able to finance phase two expansion into granular activated carbon. It's a traditional corporate cash flow credit rather than something having an element of project finance right now. The other thing, as I want to stress, is this obviously isn't a snap decision made lightly, and I am completely aligned with shareholders. I bought 1 million shares before I joined the company. I take a $50,000 salary. All the rest of my compensation is equity and equity related, and I participated in the offering and bought shares in the most recent offering. So I'm aligned and putting my money where my mouth is.
Talk quickly about expanding Red River facility. As I mentioned, 25 million pounds. Joe talked about the technical capacity of that and our technical pre-qualification. We're already 52% contracted on our granular activated carbon capability. I'm 100% confident we will be 100% contracted prior to first production in the first quarter of 2025, as it relates to that and me, and most importantly, it provides third-party validation of the quality of our product and the undersupplied nature and excess demand that people were willing to enter into contracts as much as 8 or 9 months in advance, as it relates to that. Quick update on where we are in the Red River Furnace project . We're on time, we're on budget. We actually completed the first phase of commissioning in terms of the feeder into the furnace.
One of the great things about this project, the way it's designed, is that we can commission various components in advance, so it's not like we have to wait till construction is complete, and then turn on the switch where everything, every piece of machinery first starts. So we've de-risked that from a commissioning standpoint. We have brought the internal general contracting. We brought the general contracting in-house. We originally wanted to do that in-house, myself and my CEO, who joined a year ago last week, but the person we had identified wasn't available. We finally freed him up and brought him on board about two months ago. And so as a result of that, we were able to end the relationship we had with the external GC. Nothing against them, but that was a cost plus basis. At the very least, now we're gonna save the plus.
As I say, we're reaffirming we're on time and on budget for first production in the first quarter of next year, as it relates to that. And I do believe we are likely going to be able to save some money on the cost side. Very quickly, we've talked about excess demand, but one thing I want to highlight is the biogas or renewable natural gas. There's roughly 430 existing facilities in the U.S. right now. There are 450 either permitted or under construction. And again, those are ideal in terms of additional drivers for granular activated carbon demand, in terms of being able to needing to scrub the sulfur and other contaminants before it goes into the system. I'm going to skip the next two slides in the interest of timing on that.
Happy to talk about them. I'm not hiding anything as it relates to that, but in summary, you know, we've got a great opportunity. We've got a strong business that's expanding into higher gross margin, much more robust business, a business that is going to start kicking off cash flow immediately next year. We're well-positioned in terms of the quality of our feedstock versus the competition, the cost advantage, the environmental advantage as it relates to that, and it's a very attractive economics. So I told you I was gonna talk fast and leave time for questions, so any questions?
All right, well, that was a great overview, Bob and Joe. You answered most of my questions, including the secondary offering, but just quickly, if I could, so phase one is coming online, you're gonna have deliveries in the first quarter. With you know, that secondary offering in context, what's your thought on future phase expansions and funding for those?
So in terms of timing, we want to make sure in the first quarter the plant's fully up and running, fully debugged. But with the contract visibility we have, given our discussions, we think we would fairly quickly make the FID relating to Phase II . And again, the plan right now is to finance that with debt. And you're going to say, you said that last time. But the reality is now we would qualify for a much lower cost debt, because, again, we'll have a traditional corporate cash flow credit, as opposed to something that had an element of project financing with it.
That's our time, and we really appreciate it, and we look forward to following Arq story going forward.
Thank you, everyone.
So with that, I'll turn it over to my colleague, Rebecca Stern, who's gonna introduce the EPA.
Thank you very much.
Thank you, Wayne. Good morning, everyone. It is my pleasure to introduce Zach Schafer, Director of Policy and Special Projects at the U.S. Environmental Protection Agency's Office of Water, which implements the Safe Drinking Water Act and ensures that our drinking water is safe. Zach has previous experience as the CEO of United for Infrastructure, and as a Senior Policy Director at the Council on Competitiveness. Thank you for joining us, Zach.
Thank you. Well, good morning, and thank you for having me. It is, it's really an honor to be here. I had actually followed the first symposium that you all held last year, as we've been looking more expansively than just the ivory tower than we sit in, in Washington, D.C., and looking at the broader community of people who are gonna be needed to actualize the policies, the regulations, and respond to the public health need that we're working on at the EPA. So I'm Zach Schafer. I serve as Director for Policy at EPA's Office of Water.
But, in addition to my role in the Office of Water, I have the honor of serving as leadership of EPA's Council on PFAS, which brings together the leadership of offices across the agency, recognizing that this is not a siloed kind of effort. This is something that requires all of the arms of the agency working in coordination with each other, and all of the agencies across the federal government and with state governments, with the private sector, and others all working together. So, I'll talk a little bit more about the council in a moment, and we'll just get started there.
Big green arrow.
Big green arrow? There, cool! There we go. Where did this work begin for EPA? The work on PFAS certainly did not begin in this administration, but it took on a new tone and a new sense of urgency in the Biden-Harris administration, with EPA Administrator Michael Regan's leadership. In North Carolina, as Secretary of North Carolina DEQ, he had intimate experience with this issue, with issues regarding GenX and other PFAS in the Cape Fear River, contaminating water supplies around Wilmington, North Carolina, and other communities across the region. Bringing that experience to the EPA, he knew that this would be one of the central priorities for the agency to commit to making progress on from day one.
Early in his tenure, he created the PFAS Council and tasked it with coming up with a whole-of-agency strategy to address this problem, using EPA's authorities, recognizing that EPA is only one, a significant, but only one player in the federal ecosystem on this issue. The product of that council was just about three years ago this month the council released its PFAS Strategic Roadmap, which included dozens of very specific and many very significant commitments to action from 2021 to 2024 to protect public health and the environment from PFAS.
The roadmap included clear timelines, included actionable, accountable commitments for the agency to take in that time frame, to fill a gap in federal leadership, critically, to make sure that states were partners in this effort, and that we were both learning from states and working to accelerate efforts in states, and make sure that we're also following the science. Wherever the science leads us, that's where we're going to go, and that we've used this as an example of the administration's efforts to restore scientific integrity in protecting public health. Now, PFAS are a uniquely complicated substance, as you've heard today, as you've seen in the white paper. This isn't news to anybody, but it, it was something that we wanted to grapple with upfront.
The ubiquity of the uses of PFAS, the fact that there are many thousands of chemicals in this family, their uses and releases into the environment for many decades, their unique chemical properties, it all makes looking at the whole life cycle of PFAS essential. It demanded that we ask and examine a lot of hard questions, like: What do we know, and what do we still have to learn? How are they made and used? How do they get into the environment? How are they, or can they be regulated at the federal or state or local levels? How are they impacting already overburdened and vulnerable communities? How do we hold polluters accountable and stop future pollution from occurring? And critically, what can we do now to start reducing people's exposure?
So that led us to these three goals, principally to restrict, remediate, and research PFAS. We wanted to get upstream and stop contamination before it occurs. That's almost always the most cost-effective and health-effective option available to us, especially with a substance like PFAS that resists degradation in the environment for so long. Second is to remediate, to clean up PFAS where contamination has already occurred. And third is to research. There's a lot we know. There's still a lot we don't know, and there's a lot we don't know about PFAS, about how to treat for them, about how to remove them, about how to destroy them, and how they interact with many, many different exposure pathways, some of which reach far beyond EPA's authorities and purview.
We recognize that more research is needed to make more progress, but we also recognize that we already know a lot about certain PFAS, their health effects, and how to tackle them. That's been the basis of some of the most significant actions that EPA has taken under the roadmap. At the top here, many of you are likely aware that this past April, the EPA took two signature regulatory actions to set the first nationwide enforceable standards for PFAS in drinking water. And then, about a week later, the EPA declared PFOA and PFOS to be hazardous substances under CERCLA, our Superfund law.
These are two really significant milestones in the EPA's work to combat PFAS and provide a huge range of tools for us to better understand where PFAS is occurring, to take action now to protect public health from a key exposure pathway, which is water, and to compel polluters to pay for contamination that they have cleaned up, and to avoid putting it on the backs of ratepayers or of passive receivers. And I'm happy to talk more about that if there are questions about CERCLA liability, things which I know are ever present for a lot of folks. We've also taken many actions throughout the last three years to make PFAS safer under our chemical authorities, and we'll have more announcements coming up there on closing loopholes in the regulatory structure for chemicals.
We have been working to hold polluters accountable through enforcement actions, and through our CERCLA and in the process on RCRA, our hazardous waste regulatory authorities. We've been deploying billions of dollars in funding through the Bipartisan Infrastructure Law, which I'll get to in a moment. We've been turning off the tap for industrial polluters. The Clean Water Act also contains really powerful authorities and tools to get upstream and prevent some of the most significant discharges of PFAS through point sources.
That includes using our permitting, our National Permitting Program, NPDES, the National Pollutant Discharge Elimination System, as well as our Effluent Limitations Guidelines program, which is a technology-based effluent standard program, under which we've committed already to establishing several regulations on specific industries that we know to be significant dischargers of PFAS, where it is technologically feasible to reduce those discharges significantly using currently available technology. We've been advancing the science. Our Office of Research and Development, with the Office of Water, Office of Science and Technology, continue to develop to do research on toxicity, on exposure, on migration of PFAS through the environment. We have research grants that have recently gone out from our Office of Research and Development in partnership with USDA to study the uptake of PFAS in crops.
We have research underway with tribes in various places in America to see how it migrates in different landscapes. We have continued to pursue health assessments and we call them IRIS assessments, risk assessments on additional PFAS, including exploring how do we treat PFAS in groups and categories so that we're not just looking at one at a time or a couple at a time, but looking at potentially dozens or hundreds at a time as we tackle a class of upwards of 15,000 chemicals. We've been working very hard to incorporate equity and environmental justice throughout our work. This is essential because, as many of us have seen, the burdens of any type of pollution, including PFAS pollution, do fall heavier on communities that are already experiencing economic hardship and public health and environmental harm.
And the last thing we want to do is to fail to consider the implications of this set of substances and this kind of contamination on those communities. For instance, as we look at PFAS air emissions or at PFAS destruction technologies and incineration, we want to be sensitive to the fact that any sort of emissions of products of incomplete combustion could migrate to nearby communities, frequently alongside incinerators and landfills, which are disadvantaged communities already. We don't want to add another environmental and health burden to those communities. And then finally, we wanted to listen to and learn from communities directly, that this is not the beginning of the PFAS story. We do not claim that EPA just discovered PFAS four years ago. We claim that we've been taking aggressive and accelerated action to meet the moment.
But we know that there are many communities who've been experiencing pollution for decades, and they have learned a lot, and we have a lot to learn from them. In that effort, we've done listening sessions with communities in every region of the country, and continue to incorporate their feedback, including whenever we have regulatory action. These are public notice rulemakings, and we consider that feedback, including on the drinking water rule, on which we received more than 120,000 comments and responded to each of them. So, just a note. I'm gonna skip that. I'll just close with a little bit of a note about funding, which I mentioned the Bipartisan Infrastructure Law, which provided $50 billion to the Environmental Protection Agency to address water infrastructure broadly.
Included within that were $10 billion dedicated to addressing emerging contaminants, including PFAS. And we are seeing most applicants looking to use that funding, while it can be used for other types of emerging contaminants. We are seeing most of them looking at PFAS treatment, primarily in drinking water. It's $9 billion for drinking water, $1 billion for wastewater and stormwater. And that funding is a critical head start for many communities to deploy solutions now at a lower financing cost. Much of that funding will go out as forgivable loans, so it's effectively grant funding. And in many cases, we're piloting new solutions, especially in that billion dollars of clean water funding.
We're seeing communities looking at how to deploy systems attached to their wastewater treatment works to better understand what's in their water and how to pull it out before it enters before it gets discharged into the environment or into a body of water. So we're seeing tremendous value to those funds. We know that more funding will be needed in the long run for a variety of purposes to tackle this, but this $10 billion is an incredible head start to have as we're taking these first critical regulatory steps at the agency. And we have communities who are already benefiting from these funds.
This is just a sampling of them from Tucson, Arizona, which has been grappling with this for many years with contamination from the airport, North Attleborough, Massachusetts, North Conway, New Hampshire, and I know that these are a little bit concentrated geographically, but this is truly an everywhere problem in the United States, just because of the nature of PFAS uses and how they've been discharged or released into the environment, and so we are seeing communities in every state expressing interest in these funds, using these funds, getting shovels in the ground, so we are grateful to have these funds, but know that more funding from the private sector and from other sources will be absolutely essential to meet the need.
So with that, I will close the slides, and start our conversation.
Thank you. Thank you so much, Zach. I would love to start with a question about the policymaking process. What entities have been most involved in influencing the policymaking on PFAS, and what do you see as the key reasons for acting now, specifically now on PFAS?
That's a great question. I think that it's a huge group of pressures and interests. I mean, I think that the most compelling one is just the science. That, you know, at EPA, our mission is to follow the science and to follow the law to protect human health and the environment, and the science could not be more clear. And I know that there are entities out there that question the science, but EPA has some of the best scientists in the world, and we're using the best science conducted by academics, by state toxicology offices who have reviewed EPA science, and many others. And we are very confident in the science that we've relied on, particularly for these rulemakings. All of that science has gone through peer review.
So I'd say the science has led us to this point of understanding. These are dangerous substances at extremely low levels, and we have to act. So with that science, you know, we're not the only ones listening to that science. There are communities who've been impacted for a long time. Excuse me. There are community voices out there who've been asking for this for a long time. There's a particular community advocate whose story is heartbreaking, where she has a number of types of cancer. Her husband died of cancer several years ago, due to contamination from a nearby farm near their home.
So nothing they could have done to avoid this, nothing they could have done to know that this would be a problem, but it impacted their drinking water they drank, in that case, from a private well. And she's become an advocate and when she started coming to Washington many, many years ago, she had these business cards that on the back of them, she wrote the, I believe it was four things that they wanted the federal government to do to act, and establishing a national primary drinking water standard was the last one of those. And she brought the original card, and she had a line through each of the things on the business card that she'd been handing out for decades. And it was this moment.
It's absolutely not a mission accomplished moment, but it's a huge moment showing the progress that has been made to help protect these people, to say that people are dying out there is not an exaggeration. We know from the research we did to establish the primary drinking water rule, that this rule will save thousands of lives and prevent tens of thousands of avoidable illnesses. So that's just an imperative that we all not just feel, but that the Safe Drinking Water Act compels us to respond to. Beyond that, this is something that people across the federal government and in states have been asking for years, and states are a key voice in this. States have been in the lead, as is the case.
I mean, this is the design of, you know, a federated system of government. You have states who are far ahead on certain issues and far behind on the same issues, and the federal government is frequently somewhere in the middle, catching up or holding back. What we've seen, we had a dozen states already establish drinking water standards at the state level, which is their prerogative under the Safe Drinking Water Act. EPA has now established a nationwide floor of protection, which is lower than any of those state standards were, but it builds on the science that those states have done to establish their standards, and protect everybody in the nation who uses water from public drinking water systems. So states have been a key voice, and industry has been a voice.
You're looking for consistency and national standards, that, you know, these are complex and persistent substances. They will migrate across state lines. A patchwork of regulations and standards and approaches doesn't help anybody, you know, respond to this in a coordinated and really effective way. And then lastly, I'll just say political leadership. I mean, from President Biden directly to Administrator Regan, to my boss, Bruno Pigott, and former boss, Radhika Fox, who led our water program. This has been a core focus of this administration. It's been lead, and it's lead pipes and PFAS.
This is very much a promises made, promises kept kind of situation where, you know, we at an early stage in this administration saw the imperative to act, and we've acted, in a relatively short amount of time.
Great, thank you. You know, it was interesting hearing about the roadmap, its history. What is your perspective on the future regulatory action and outlook from the EPA, and what other federal agencies besides the EPA are involved in this process?
Very good question. I'll take the second part first, which is that EPA is in a leadership posture on this in the federal family. You know, we're taking aggressive action. The roadmap that we put together was the most comprehensive federal document and set of commitments that we've seen in the federal family, but it is by no means the only work that's happening across the federal family, and that's really important because EPA's authorities only extend so far. We work closely, so actually, shortly after the EPA created the council and published the roadmap, the White House convened an interagency policy committee on PFAS that included leadership from the Department of Defense, the Department of Transportation, Department of Energy, FEMA, NOAA, NASA, USDA, the FDA, the CDC.
I mean, you name it, there is an agency with equities in PFAS just because of how ubiquitous they are. There are different perspectives. There are certain people who are nervous about going as far as we're going. There are certain people who feel the need to go further. There's a lot of people who say, "We don't know how, you know, the science will play out in our programs or under our authorities." But starting in 2021, all the federal agencies were talking to each other and looking at this problem together. And there are a number of different work groups from everything from, you know, product procurement in the federal government and looking at how to reduce PFAS in product procurement. There's, you know, obviously, interest in PFAS implications for the agricultural sector.
So EPA, USDA, FDA, CDC, all working together to better understand not just the migration of the substances from water and air into plants, into animals, into the food supply, but also looking at where do EPA's regulations and authorities stop and USDA's begin, and where do USDA's stop and FDA's begin? And this was a learning experience for me. I did not realize that there's actually a specific place in the slaughterhouse where it moves from USDA to FDA. This gets really, really specific and tactical, once you get all the lawyers involved, and I am not a lawyer, but most of us are all lawyers working on this. And so we want to know those things because that enables us to do our job.
You know, when it comes to the human health impacts, we want the health agencies like EPA, CDC, and others who are doing research to be working together to accelerate the work that we're all committed to doing already, and to not duplicate and to help leverage each other's work. There's also obviously a lot of conversations around essential or critical products that contain PFAS and for which there's not a known alternative. And so, you know, DoD, DOE, and other agencies with EPA are looking at, you know, how to think about that and grapple with that, and look at PFAS alternatives as well.
And one of the great collaborations we've had in that space has been with Department of Defense, where we worked together to develop a new. It's called a Mil-Spec, a standard for PFAS-free firefighting foam. And AFFF has been one of the most significant likely sources of PFAS contamination when it occurs near airports or military bases or firefighting training centers and other places like that. And so, and there's lots of questions about how to clean those areas up, but moving forward, there is now an approved PFAS-free alternative that the military is committed to using and that civilian airports are starting to transition to. And that was the product of a collaboration between EPA and DoD. So there's a lot of work going on in the interagency space.
We're all learning from each other, we're all making progress on our own and together. What it looks like for EPA, our regulatory outlook, there are still items in the road. We said it was a commitment to action from 2021 to 2024. We've done a lot. We've accomplished a lot. There are still some things that we have not yet delivered on that we fully intend to, just may not be in 2024. I mentioned our Effluent Limitations Guidelines program, which is a very powerful tool for setting limits on discharges of substances from point sources. So we go by industrial category, by NAICS code. And so, what we've publicly committed to in our ELG plan, which we develop every two years, is that we are developing regulations for PFAS discharges from PFAS manufacturers.
Those are the plants. There's only 12 of them in the country who manufacture the raw feedstock for PFAS and can be one of the most significant contributors to PFAS in our waterways. We're developing an ELG for electroplaters and chemical and metal platers and chrome finishers who have to use it in their chrome plating baths. And there are thousands of facilities around the country, many of which may not have the best standards for how they use and dispose of their substances. And we've committed to developing an ELG on landfills, where the leachate from those landfills contains PFAS from a variety of sources, including from wastewater treatment plants, which may send their products to those landfills.
And that's another conversation to get into, the vicious loop of landfill leachate to wastewater systems and back again. We're also using our NPDES program to get upstream. We're working with states to get them to review permit discharge permits, including from wastewater treatment plants, but also from industrial dischargers to look at conducting influent and effluent testing for PFAS, and to identify where are those particular sources of PFAS in a community. It may be one, it may be none. We know that there is also work Vermont has done some great research on this, that suggests that the largest single source of PFAS in their wastewater influent is simply residences. It's coming off of makeup, off of sunscreen, off of people's clothes in the laundry.
It's in products that end up in those water streams, so you know, that's gonna be hard to get at, but we can get at those plants, those factories, those whatever they are, that are upstream, that are discharging more concentrated amounts into a wastewater treatment system's intake, and we can get those upstream. Our CERCLA program issued an Advance Notice of Proposed Rulemaking , looking at what additional PFAS could or should be added to the CERCLA rule that they've already approved for PFOA and PFOS. There's action on RCRA, there's action using our TSCA and TRI authorities to close loopholes on PFAS used in commerce, to look at PFAS that's being used in everyday products, and they present a harm.
So, there's a lot of regulatory work on the horizon that we expect movement on in the next few years, and a lot that will come out, and, you know, as a result of the actions we've taken. One of the things I really admire that the administrator has framed this issue under is that, you know, as we do more, we will learn more, and as we learn more, we will do more. And it's that sort of iterative process that's driving our work forward.
Great, thank you. I wanna open it up to questions from the audience. Sorry.
Hi, thank you. Zach, can you speak to either, I guess, both timing and directionally, when we might expect anything on the record determination as it relates to PFAS and PFAS-contaminated materials?
No, not trying to be cute. I actually just don't know. I know it's been in review with OMB, but I don't know what the timing is now.
I have two questions for you guys. So you're telling us you wanna hold the actors accountable. Does that mean that utilities won't have to have rate increases and put those burdens on the consumers themselves? And then my second question is, what's the logic behind allowing the burning off of these chemicals if we already know that they're hazardous to human health?
What's the logic of what?
Of allowing burning off of these chemicals if we already know that they're hazardous to human health?
So like the incineration destruction conversation, you mean? So on the first question, you know, when we say hold polluters accountable, you know, we've been clear. I mean, under the CERCLA rule, we did something which is both unique and not unique at all, which is that our Office of Enforcement concurrent with the final rule that our Land and Emergency Management Office issued, our enforcement office put out an enforcement discretion memo, which outlined the agency's posture on using the enforcement under CERCLA that the rule granted to the agency and clearly stated that we do not intend to pursue those kinds of entities who've been passive receivers of PFAS through no fault of their own. So that includes drinking water. And we named them.
I mean, we didn't stay vague about this. We said drinking water utilities, wastewater systems, municipal airports, firefighting stations, landfills. It's not to say that there aren't things that those systems and those entities are gonna need to do and should do, but we know that, you know, the last thing we want to do is slow down their work to address these problems by tying them up in litigation. And so it's the agency's position that we're gonna go after the polluters who caused this problem in the first place, and that's what our enforcement office has said, and that's what they are doing. It doesn't mean, though, that there's not work that just has to happen where the problem is.
And so unfortunately, it's at the point of, you know, where the drinking water is treated, that we can capture those PFAS. It's at the airports where it's happened that cleanup is gonna need to occur to prevent further migration into groundwater systems. That doesn't mean that they, you know, necessarily will be held liable by us, but we recognize there are costs to doing that. That's one of the reasons that we're grateful for the bipartisan infrastructure law funding we have for drinking water systems and wastewater systems to get a start on this. We also recognize that there will be more funding needed.
You know, we did do a thorough economic analysis on the cost and benefits of the drinking water rule, and we found that quantitatively, the benefits justify the costs, and that there's far more qualitative benefits or quantitative benefits which we weren't able to capture, given the intricacies of the SDWA rulemaking process, that will far exceed the costs over the lifetime of the rule, which is the lifetime of a person. You know, what will it mean for rates? It will mean different things in different communities. Some communities have taken steps and seen a variety of different costs already.
But one of the reasons I'm glad to be talking to this audience is that this is the community that's going to be investing in those technologies, and expanding and growing manufacturing capacity and engineering and testing and deployment, businesses to help these water systems and communities solve this problem. That, I've actually worked at the intersection of regulation and competitiveness for a long time. I worked at the Council on Competitiveness, and a long time ago I was an appliance cop at a consulting firm working to support the Department of Energy's Appliance and Equipment Standards program. And one of the things we saw was that in the absence of other pressures, regulation can be a huge driver of innovation and competitiveness and bringing costs down.
We saw that in many different appliance technologies, and I believe that that will be the case here. You know, I heard Bob and Joe up here before, and I've had the pleasure of meeting with them a few times at EPA and seeing their work progress. And that's exactly the kind of especially domestic, 'cause I also work on Build America, Buy America requirements, and happy to talk to anybody about domestic procurement standards. You know, that's the kind of growth that we want to see, and we know is needed to meet this challenge.
And it's one of the reasons that we built in the extra time in the drinking water rule to accommodate that shift in industry, the time that water systems will need to test for what's in their water, to design a system, to secure the funding, and for the broader ecosystem of testing and GAC capacity or ion exchange manufacturers. You know, we know of one ion exchange manufacturer that's planning to build an enormous facility here in the U.S. already. And so, you know, we do see these regulations as drivers of competitiveness, drivers of domestic capacity and growth, and ultimately drivers of keeping the costs down.
And then in the interim, when there is that uncertainty and bumpy road, we're here to work with those systems to provide technical assistance, to provide funding wherever we can.
Just one more quick question, I think.
So, considering the fragmentation of all these municipalities and whatever, and you're dealing with all the different government entities, looking ahead, should there be a Department of Water, since it's such a important resource? And the second part is, I don't know, is: how do you deal with the public-private partnerships, and how do you promote that?
Well, selfishly, as you know, coming from the Office of Water, absolutely, there should be a cabinet member for water. Actually, there is a Water Subcabinet , which actually that's a great lead-in. There is a Water Subcabinet that was created a few years ago, which convenes very senior leadership from all of the water agencies, 'cause we recognize water, you know, water is the most essential universal substance in the world. And so we have many agencies with significant equities and stakes in it. So, you know, we meet regularly with leadership from the Department of the Interior, from USDA, from the Department of Energy, from NOAA, FEMA, NASA, you know, people who have roles in managing water, regulating water, sensing and monitoring.
And one of the things that we've talked about is how do we reach out to fragmented communities? How do we, you know, with one voice, which isn't always possible, but how do we as much as possible coordinate with each other? And part of that happens by strengthening the ties between our agent-- this is, you know, boring federal bureaucracy stuff, but it's strengthening the ties between the regional offices of all of these agencies. EPA has ten regions across the country. They don't always know who their counterparts are at Army Corps or at, you know, the Bureau of Reclamation or other agencies, or someone might know, but there's not deeper connective tissue. And so that's one of the things we've tried to work on through the water sub-cabinet.
It's also something that I've seen improve markedly just in the few years that I've been here, through coordinating on things like getting the bill funding out, on with our PFAS drinking water rule and our UCMR 5, our Unregulated Contaminant Monitoring Rule, for instance. We are in this series that we do every five years of measuring, of testing for unregulated substances in water. PFAS were unregulated at the time, and so it's. We're testing at every large and mid-sized water system in the country. And when we you know, when we finally started to release those results, we knew that there would be a lot of concern from communities. And so we established points of contact in each region who were there to talk directly to communities who had questions.
So we're working to develop structures that can help communities answer their questions and learn more, and I think we're making progress.
Thank you, Zach. It looks like our time is up. I'll turn it over now to Tim Winter, who will lead a fireside chat with the National Association of Water Companies. Thank you.