Contaminated Land: Turning Liability Into Opportunity

For businesses with legacy industrial land or facing facility closure, the legal and commercial stakes around site remediation have never been higher, or the opportunities more significant.

Site remediation sits at the intersection of environmental law, corporate strategy, and land value. From heavy industry and manufacturing through to energy, retail, and logistics, legacy contamination and the obligations that come with it are important to recognise and understand. Multiple legal, commercial, and policy pressures are converging, and the businesses best placed to benefit are those that treat remediation as a strategic asset rather than a compliance cost.

This article highlights the key legal issues and commercial considerations that any private sector business with contaminated or potentially contaminated land should have front of mind.

The legal framework: what drives liability

The primary statutory regime is Part IIA of the Environmental Protection Act 1990, which imposes liability on the ’appropriate person‘: in the first instance, any person who caused or knowingly permitted the contamination to occur, and if no such person can be found after reasonable inquiry, the current owner or occupier of the land. 

Separately, permit surrender under the Environmental Permitting (England and Wales) Regulations 2016 requires an operator to demonstrate to the Environment Agency that the necessary measures have been taken to avoid any pollution risk before a permit can be returned. In practice, this means the Environment Agency will not accept a surrender without verified remediation or, at minimum, evidence that the site no longer poses an ongoing pollution risk. This process can take time to work through with the Environment Agency.

The ‘polluter pays’ principle is key: conduct exit inspections, local authorities are becoming more active in formally designating sites as contaminated land, and the courts have reinforced civil liability exposure, including to neighbouring landowners and future purchasers, where contamination has been ignored or mismanaged.

Evolving standards: The bar is rising

The definition of ‘suitable for use’ (the guiding principle for what level of clean-up is required) is evolving. Key developments include:

• PFAS and emerging contaminants: ‘Forever chemicals’ (PFAS, including PFOS and PFOA) are now a central concern for the Environment Agency, which is increasing monitoring around industrial sites and tightening draft guidance on acceptable levels. Site investigations that do not specifically assess for PFAS risks are frequently scrutinised (and in numerous cases are considered insufficient), and other substances are attracting increasing regulatory attention.
• Biodiversity Net Gain (BNG): The mandatory 10% BNG requirement under the Environment Act 2021 fundamentally changes how remediation and redevelopment must be planned together. Remediation strategies that conflict with future habitat creation, such as simple capping approaches where tree planting or wetland creation is proposed, will need to be reconsidered for new planning permissions. 
• Climate resilience: Regulators are increasingly asking whether proposed remediation solutions will be sufficient if there is future flooding or rising groundwater, and we’re seeing that sites in floodplains or coastal locations are subject to heightened scrutiny. Method statements that do not address climate contingencies are less likely to satisfy the Environment Agency.
• Soil health: While binding soil health targets have not yet been introduced, the policy direction is that making soil "not dangerous" is no longer sufficient, and further steps are required. We are of the view that businesses remediating land should anticipate that a soil health guidance will continue to be developed and enhanced, and they should consider proactive soil amelioration accordingly.

Waste law: The end of dig-and-dump

Contaminated soil is regulated as waste, and disposal to landfill has become significantly more expensive and politically disfavoured. The Landfill Tax standard rates have increased, and contaminated soil cannot qualify for the lower inert rate. In addition, landfill capacity is also shrinking.

The regulatory expectation is now that businesses should be able to demonstrate that they have explored alternatives before resorting to disposal: on-site treatment, soil washing, bioremediation, stabilisation, and reuse under the CL:AIRE Definition of Waste Code of Practice (DoW CoP). Properly applied, the DoW CoP enables excavated materials to be reused without full waste permitting, which offers a genuine commercial benefit. However, the Environment Agency has stepped up audits for misuse, and we have seen proactive scrutiny on projects and therefore, rigorous and proper application of the framework is essential.

For businesses with sustainability targets, including zero waste to landfill commitments, circular remediation approaches can directly support corporate ESG reporting and investor expectations.

Transactions and due diligence

Environmental contamination is a material issue in any transaction involving land with an industrial legacy. Phase 1 and Phase 2 assessments are now standard for any acquisition of formerly industrial or commercial land, and the discovery of PFAS contamination, including from sites that appeared clean on historical review, is an increasingly common deal complication that we are seeing repeatedly.

Legal agreements must address remediation risk clearly: robust environmental indemnities, escrow arrangements, and price adjustments are the norm. For sellers, the commercial case for remediating before sale rather than trying to contractually pass contamination risk is compelling: a clean site commands a better price and a cleaner exit.

Practical recommendations

1. Audit your portfolio now: Identify sites with historical industrial use, permit obligations, or proximity to sensitive receptors. 
2. Update your site investigations: Ensure assessments expressly cover PFAS, emerging contaminants, and climate change impacts on long-term containment solutions.
3. Integrate remediation and BNG planning from the outset: Do not treat contamination consultants and ecologists as separate workstreams, they should work together and their outputs must be compatible.
4. Consider the waste hierarchy before committing to disposal: On-site treatment and CL:AIRE DoW CoP reuse are not just cost-saving tools: not only do regulators expect them to be considered, but they can offer a range of commercial benefits.
5. Take early legal advice on permit surrender: The Environment Agency's expectations on exit are more demanding than many operators anticipate. Early engagement avoids delay and cost and ensuring there is clarity on what the relevant regulator (either the Environment Agency or Local Authority) expects will help to manage internal expectations around the costs and timescales for a site closure and surrender.
6. Address contamination risk explicitly in any transaction: Indemnities and warranties around environmental liabilities require careful drafting, and assumptions about what predecessor surveys covered are frequently wrong.

Conclusion

The legal framework around site remediation is tightening, enforcement is increasing, and the standard of what constitutes an adequate clean-up continues to rise. For businesses that act strategically, remediated land unlocks real value: development potential, ESG credentials, smoother regulatory relationships, and cleaner transactions. 

We advise private sector clients across the full range of environmental law issues arising from contaminated land: regulatory compliance and enforcement, permit surrender, transactional due diligence, remediation strategy, waste classification, and planning.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.