TheChek News Flow

As threat from ChatGPT recedes, users are searching more with the market leader and monetisation seems to be intact

Here’s a number to conjure with: $1.3tn. That’s the amount of market capitalisation Google parent Alphabet has added since September 2 — and it is equivalent to nearly double the combined gain in the rest of the so-called Magnificent 7.

Why that date in particular? Because it’s when a US antitrust judge decided Google’s monopoly was no longer a potent threat in the age of AI. That decision left the company free to flex its muscles. With Alphabet’s market capitalisation edging closer to a colossal $4tn, the rest may soon be history.

Google’s monopoly in online search — the judge did at least call it what it is — did indeed seem at risk for a while. The launch of ChatGPT in late 2022 threatened to drain the moat Google had created around itself. Analysts at Wells Fargo estimated in 2023 that the shift to “conversational” search, with inherently lower margins, could wipe 14 per cent off Alphabet’s operating profit.

The reality has proved different. Users are searching more on Google, not less, and monetisation seems to be intact. It’s something like the principle of “induced demand” that explains why building more roads generates more traffic. Meanwhile, ChatGPT has, in recent months, handed back some of its market share gains to its larger rival.

Last week, Google slew another foe: the belief that it’s an AI also-ran. The launch of its Gemini 3 model last Tuesday showed a clean pair of heels to OpenAI’s offerings on a range of so-called benchmarking tests, including reading what’s on a user’s screen, a key competency for creating AI “agents”. Salesforce chief Marc Benioff, a ChatGPT user, says he tried Google’s new offering and is “not going back”.

There are three reasons Google has been able to make this leap. One is that it houses some of the world’s most sophisticated research capabilities, thanks mostly to UK-based DeepMind, which it bought over a decade ago. A second reason is that Google is training its models on chips of its own making. Rivals still depend on whatever allocation of they can get from Nvidia, which dominates AI chips as Google dominates search.

The third, and biggest reason? It’s a monopolist, and with that comes monopoly profit. Alphabet has made around $330bn in free cash flow over the past five years, according to LSEG. That gives it enormous leeway to invest for years in things that don’t obviously — and may never — produce revenue. Few companies can so easily accommodate massive spending on things peripheral to their core business. Certainly not OpenAI, which may make $20bn of revenue this year, if it is lucky.

The bigger Google gets, the stronger. As its cloud business grows, now making up nearly a fifth of revenue, it becomes less vulnerable to hiccups in global advertising spend. Future revenue streams could come from selling its chips to other AI combatants like Meta Platforms. Some features of Gemini 3 suggest the company will become a stronger contender in the enterprise software market too.

Of course, being huge on its own isn’t enough to sustain Google’s supremacy. It wouldn’t be where it is without smart ideas and products that people actually want to use. But the company’s impending $4tn valuation sends a strong message that anyone who thought AI would speed the end of tech’s most famous monopoly got it dead wrong.

The Price to Enter Many U.S. National Parks Is Set to Triple for Foreign Travelers

Interior Department plans to raise cost of annual passes and single-day admissions for international visitors as part of ‘America first’ initiative

International visitors soon will face higher prices, potentially totaling hundreds of dollars, to visit many U.S. national parks.

Beginning Jan. 1, an annual pass will cost $250 for nonresidents compared with $80 for U.S. residents, the Interior Department said Tuesday. Nonresidents now pay the same rate as U.S. residents to visit parks. There is no change in the cost for U.S. citizens.

The entry-fee changes are described by the Interior Department as “America first.” The policy also specifies that international visitors without an annual pass will need to pay a $100-per-person surcharge at 11 of the most visited national parks, which include Acadia, Grand Canyon, Yellowstone, Yosemite and Zion.

For example, according to the Interior Department’s statement of new fees, at Grand Canyon National Park the cost of driving in a private vehicle is $35. Non-U. S. visitors now would have to pay an extra $100 per person on top of that, making admission for a family of four $435 if they don’t have an annual pass.

Revenue generated from the new fees will support upgrades to visitor facilities, as well as park maintenance and service improvements, the Interior Department said.

“U. S. residents will continue to enjoy affordable pricing, while nonresidents will pay a higher rate to help support the care and maintenance of America’s parks,” the Interior Department said in a statement.

Most national parks don’t charge entrance fees. There are others that do but weren’t included on the list of the most popular and targeted for a price increase. At these parks, all visitors, regardless of where they live, will pay the same rate for an entrance fee or daily pass, a spokeswoman said.

People who buy digital passes on Recreation.gov must now show a photo identification matching the name on the pass, an Interior Department spokeswoman said. National Park visitors will confirm their residency by providing a ZIP code when purchasing a pass online and then must show a U.S. government-issued photo ID that matches when using it, she said.

Those who don’t have the appropriate ID will be asked to pay more for the nonresident annual pass.

The Trump administration signaled the changes in July with an executive order directing Interior Secretary Doug Burgum to develop a plan to increase entrance fees for foreign travelers. The administration proposed cutting the Park Service’s budget for the coming fiscal year.

The Interior Department also announced 10 days in 2026 when U.S. residents can access parks for free. Nonresidents still need to pay on those occasions. Previously, fee-free days applied to all visitors.

The energy giant, the historic operator, has been ousted by the City of Paris in favor of a consortium led by Dalkia, Eiffage and RATP for the next 25 years.

A major twist. Late Tuesday afternoon, the City of Paris revealed the winner of the tender for the capital’s urban heating network. The Dalkia, Eiffage and RATP Solutions Ville consortium was selected after five years of work and 27 months of consultation. It marks a setback for Engie, the historic operator of the Paris heat network, which was competing against the consortium. It is a huge disappointment for the loser, which had hoped to validate its strategy with this contract. Both groups are refusing to comment on the decision, which must still be put to a vote by the Paris Council on December 16 before being formally approved.

The choice of the winning bidder is highly symbolic and goes beyond Paris. It is not just a 25-year contract worth around €15 billion in revenue. The Compagnie parisienne de chauffage urbain (CPCU) serves as a showcase for its concession holder, in France and worldwide. The Paris heating network is the largest in Europe after Moscow’s. Its 530 km of underground pipes provide heating and hot water to 6,000 buildings in the capital, serving more than 450,000 housing units—nearly 1 million Parisians. It also supplies energy to sixteen heat networks across the metropolitan area, including those in Clichy, Issy-les-Moulineaux and Levallois-Perret.

Since the 2022–2023 energy crisis, the French government has made heat networks a key driver of the energy transition, as heating accounts for 66% of national energy consumption. France currently has just over 1,000 heat networks, with a target to triple that number by 2035. Interest in this solution extends well beyond France. Whether renewing contracts or accessing new opportunities, competition among operators is fierce. Winning Paris is a prestigious asset to leverage in other markets.

The enthusiasm for heat networks stems from their advantages. They accelerate the decarbonization of cities—and industries—by relying on renewable energy sources: waste-to-energy, and increasingly biomass, geothermal energy and waste heat (heat generated during industrial processes). Above all, they provide stability for heating and hot-water bills for households, businesses and public services. Urban heat networks are less exposed to fluctuations in gas and electricity prices, as heat production increasingly depends on local, renewable resources. These networks are also increasingly designed to provide cooling in summer, in addition to heating in winter. They consume far less energy than conventional air-conditioning systems.

This aligns with the goals of the City of Paris, which aims for carbon neutrality by 2050. It expects the new concession holder to green its energy networks, which must be supplied exclusively from renewable and recovered energy sources. In its original version, the tender required a phase-out of coal—a requirement now obsolete, since no coal-fired plants supply the Paris network anymore.

The schedule is already being criticized. “A contract binding Paris for several decades cannot be decided by a departing majority just months before a decisive election. The decision should be made by the future majority elected in 2026, after public debate,” argues Pierre-Yves Bournazel, Horizons and Renaissance candidate for mayor of Paris. He had been advocating for several years to postpone the review of applications until after the 2026 municipal elections. Such a delay would not have been unusual for a contract that, in nearly a century of existence, has already undergone fifteen amendments.

The Compagnie parisienne de chauffage urbain was created in 1927. The network has since been managed as a public-service delegation between the City of Paris and the Compagnie générale française de chauffage urbain (CFGCU), which later became the CPCU. In keeping with the original structure, the company is now owned 66.5% by Engie and 33.5% by the City of Paris. Fifteen amendments have extended the original contract. In February 2024, the Paris Council decided to add two more years, explaining that “the health and energy crises had affected preparation of the new concession agreement.” A fourteenth amendment postponed the deadline from 31 December 2024 to 31 December 2026. A fifteenth added one extra day to allow for accounting alignment on 1 January 2027.

Another concern: Dalkia has been the subject of recurring rumors. The group could reportedly be sold by its parent company, EDF. “This creates major uncertainty regarding this bidder’s ability to commit,” adds Pierre-Yves Bournazel, who believes that “continuing the process under these conditions could weaken competition.” However, industry sources praised “the expertise of the City’s teams” and the “quality of the discussions.”

Commission recommends Finland be placed under excessive deficit procedure but Italy looks set to exit

Rising public deficits and debt levels in the Eurozone pose “sustainability risks” in a number of countries, the European Commission has warned.

In its latest assessment of Eurozone countries’ compliance with EU fiscal rules — which aim to keep public deficits within 3 per cent of annual GDP — the commission found that owing to “immense demands on public finances” a number of countries were “having [fiscal] sustainability risks,” EU economy commissioner Valdis Dombrovskis said.

“After declining substantially in previous years, aggregate euro area deficit levels and debt levels have started to edge up again, so we need to remain vigilant,” he added in an interview with the Financial Times.

The commission found that the 2026 budgets of both the Netherlands and Malta were not complying with EU fiscal rules — which also aim to keep debt-to-GDP ratios below 60 per cent — with planned expenditure significantly in excess of spending limits previously agreed with the commission. It is a similar case for Spain, Croatia, Lithuania, Slovenia, Bulgaria and Hungary, though by a smaller margin.

The commission also recommended on Tuesday that Finland be placed under an excessive deficit procedure for surpassing the 3 per cent deficit threshold. It would become the tenth EU country to be placed under the punitive process, which for Eurozone members can eventually result in fines if corrective measures are not taken by governments.

Finland’s deficit came in at 4.5 per cent of GDP last year, and is projected to be 4.3 per cent this year, though Dombrovskis noted that the Nordic country faced “exceptional circumstances”, such as geopolitical risks and the closure of its border with Russia, “which has led to very slow economic growth, basically economic stagnation”.

If a majority of EU countries confirm that Helsinki is in breach of the bloc’s fiscal rules, the commission will recommend spending cuts “taking into account the difficult situation in which Finland finds itself” and also the “need to increase defence expenditure”, he added.

France, which was placed in an excessive deficit procedure last year, and which last Saturday failed to pass a budget that would have reined in spending, is “compliant with the requirement of the fiscal rules” based on a draft budgetary plan submitted by Paris, Dombrovskis said.

But, he warned, the outcome of the country’s fraught budget process should be “to the extent possible close to the draft budgetary plan”, which targets a deficit of 4.7 per cent of GDP for 2026, in line with spending limits pre-agreed with the commission.

“We’ll be reassessing the situation once we see the outcome of budgetary discussions in France,” Dombrovskis said.

Meanwhile Italy, whose budget deficit is projected by Prime Minister Giorgia Meloni’s government to decline to 3 per cent this year and to 2.8 per cent next, looks set to exit the excessive deficit procedure next spring, the commissioner said.

Le géant de l’énergie, opérateur historique, a été évincé par la Mairie de Paris au profit d’un consortium emmené par Dalkia, Eiffage et la RATP pour les 25 prochaines années.

Un énorme coup de théâtre. La Mairie de Paris a dévoilé ce mardi en fin de journée le nom du gagnant de l’appel d’offres pour le réseau de chauffage urbain de la capitale. Le consortium Dalkia, Eiffage et RATP Solutions Ville a été choisi, au terme de cinq années de travail et de 27 mois de consultation. Un revers pour Engie, l’opérateur historique du réseau de chaleur parisien, qui était en concurrence avec le consortium. C’est une énorme désillusion pour le perdant, qui espérait valider sa stratégie avec ce contrat. Les deux groupes se refusent toutefois à commenter la décision, qui doit encore faire l’objet d’un vote au Conseil de Paris le 16 décembre avant d’être formellement validée.

Le choix du lauréat est hautement symbolique. Il dépasse le cadre parisien. Il ne s’agit pas seulement d’un contrat de 25 ans, portant sur un chiffre d’affaires d’environ 15 milliards d’euros. La Compagnie parisienne de chauffage urbain (CPCU) est une vitrine pour son concessionnaire, en France et dans le monde. Le réseau de chaleur parisien est le plus grand d’Europe, après celui de Moscou. Ses 530 km de canalisations souterraines fournissent le chauffage et l’eau chaude à 6 000 bâtiments de la capitale, chauffant plus de 450 00 logements, soit près de 1 million de Parisiens. Ils alimentent aussi en énergie seize réseaux de chaleur de la métropole, dont ceux de Clichy, Issy-les-Moulineaux ou encore, Levallois-Perret.

Depuis la crise énergétique de 2022-2023, le gouvernement français a fait des réseaux de chaleur un levier de la transition énergétique, alors que le chauffage représente 66 % de la consommation énergétique nationale. La France compte un peu plus de 1 000 réseaux de chaleur. L’objectif est d’en avoir trois fois plus en 2035. L’engouement pour cette solution dépasse largement nos frontières. Qu’il s’agisse de renouvellement de contrats ou de nouvelles opportunités, la concurrence est féroce entre les opérateurs. Emporter Paris est une belle médaille à faire valoir sur les autres marchés.

L’engouement pour les réseaux de chaleurs tient à leurs atouts. Ils permettent d’accélérer la décarbonation des villes - et des industries - en s’appuyant notamment sur des énergies renouvelables : valorisation des déchets et, de plus en plus, utilisation de la biomasse, de la géothermie et de la chaleur fatale (chaleur dégagée par un processus industriel). Surtout, ils apportent de la visibilité aux factures de chauffage et d’eau chaude des particuliers, des entreprises et des services publics. Les réseaux de chaleur urbains sont moins exposés aux variations des prix du gaz et de l’électricité, puisque la production de chaleur s’appuie de plus en plus sur des ressources locales, renouvelables. Ces réseaux sont aussi de plus en plus souvent conçus pour apporter du froid en été, en plus de la chaleur en hiver. Ils sont bien moins énergivores que des systèmes de climatisation classiques.

Cela convient à la Marie de Paris, qui vise la neutralité carbone en 2050. Elle attend du nouveau concessionnaire un verdissement de ses réseaux d’énergie, qui devront être alimentés exclusivement à partir d’énergies renouvelables et de récupérations. Dans sa version initiale, l’appel d’offres prévoyait une sortie du charbon. Mention rendu obsolète aujourd’hui, puisqu’il n’y a plus de centrales à charbon alimentant le réseau parisien.

Un calendrier critiqué.

Le calendrier fait néanmoins débat. Les critiques fusent déjà. « Un contrat qui engage Paris pour plusieurs décennies ne peut être décidé par une majorité en fin de mandat, à quelques mois d’un scrutin décisif. La décision devrait revenir à la future majorité issue du vote de 2026, après débat public », fustige Pierre-Yves Bournazel, candidat Horizons et Renaissance à la Mairie de Paris. Il plaidait depuis plusieurs années pour un report de l’examen des dossiers des candidats après les élections municipales de 2026. Ce décalage n’aurait rien eu d’extraordinaire pour un contrat qui a, en près d’un siècle d’existence, déjà connu quinze avenants.

La Compagnie parisienne de chauffage urbain a vu le jour en 1927. Le réseau est géré depuis sous la forme d’une délégation de service public, entre la ville de Paris et la Compagnie générale française de chauffage urbain (CFGCU), devenue la Compagnie parisienne de chauffage urbain (CPCU). Dans la continuité des premiers signataires, la société est aujourd’hui détenue à 66,5 % par Engie et 33,5 % par la Ville de Paris. Quinze avenants ont prolongé le contrat initial. En février 2024, le Conseil de Paris avait décidé d’ajouter encore deux ans, expliquant que « la crise sanitaire et énergétique avait affecté la préparation de la nouvelle convention de concession ». L’échéance avait été repoussée par un quatorzième avenant du 31 décembre 2024 au 31 décembre 2026. Un quinzième avait ajouté un jour supplémentaire pour permettre un rattachement budgétaire le 1er janvier 2027.

Autre sujet d’inquiétude, Dalkia fait l’objet de rumeurs récurrentes. Le groupe pourrait être cédé par sa maison mère, EDF. « Ce qui crée une incertitude majeure sur la capacité d’engagement de ce candidat », ajoute Pierre-Yves Bournazel, qui considère que « le maintien de la procédure dans ces conditions pouvait affaiblir la concurrence ». Toutefois, des sources industrielles ont salué « le savoir-faire des équipes de la Ville » et la « qualité des échanges ».

Airlines and regulator warn over rising Heathrow costs after runway approval

British Airways owner says it has ‘serious concerns’ about project, which requires moving M25

Major airlines and the UK’s aviation regulator have warned about the dangers of rising costs at Heathrow, after ministers backed a proposed third runway at the airport that requires moving the M25 motorway.

Transport secretary Heidi Alexander said on Tuesday that Heathrow’s project — part of an overall £49bn investment plan — was more “deliverable” than a rival option put forward by hotel group Arora.

Work could begin on the runway at Britain’s only hub airport before the next election, expected in 2029, ministers found.

But International Airlines Group, the owner of British Airways and Heathrow’s largest operator, said it had “serious concerns about the affordability of the proposals” and would “talk to the government about ways to reduce the overall project cost”.

Airlines have long warned that they will have to pay for the extension, which is part of Heathrow’s £49bn investment plan, through higher landing fees. The airport believes the runway itself will cost £21bn, of which £1.5bn is allocated to moving a portion of the M25.

The Civil Aviation Authority, the industry regulator, appeared to back airlines’ concerns, noting that increased fees at Heathrow were “likely to result in [the airport’s] charges significantly exceeding current charges at other airports”.

The CAA has launched a consultation into changes to Heathrow’s regulatory model, which allows the airport to recoup investment charges through landing fees.

“There is sufficient evidence to warrant revisiting the current regulatory model to determine whether it can be improved or whether an alternative model can better serve the interests of consumers,” it said.

On Tuesday, the chief executive of easyJet said the low-cost airline would not move its planes to an expanded Heathrow if the cost of relocating the M25 to build the new runway became too expensive.

Kenton Jarvis said his company was “interested” in taking slots at Heathrow once the third runway was operational but expressed concern it would lead to higher costs for airlines.

“A lot will depend on how much they spend, moving the M25 . . . and what they’re looking for in terms of take-off fees,” he said.

Jarvis told the Financial Times that easyJet was not averse to operating at high-cost airports, citing its flights to Amsterdam’s Schiphol and Linate in Milan.

“Schiphol is not that different from Heathrow today, but what it means for Heathrow tomorrow we have to wait and see,” he said.

Virgin Atlantic, another major customer at Heathrow, said it was also concerned about the affordability of the project, which ministers have backed as a means of boosting the economy.

The airline said it had “been supportive of growth at Heathrow if, and only if, there is fundamental reform to the flawed regulatory model to ensure an affordable scheme for consumers”.

Heathrow welcomed Alexander’s decision to approve its proposal but said it needed further clarity from the government about how the next phase of the project would be regulated. 

“We need definitive decisions from the CAA and government by mid-December so that delay to the project can be avoided,” the airport said. 

Arora Group owner Surinder Arora said his company accepted the decision and would bid for the work to build the runway.

The government said the decision meant a third runway at Heathrow was “another step closer to take-off by 2035”, despite the airport’s management suggesting that is the earliest possible date for completion. 

Ministers have made the decision despite warnings from airlines that the proposed “Northwest Runway” will make the airport significantly more expensive. Arora had argued that his proposal for a shorter runway would cost less and avoid moving the M25.

Business groups welcomed the government’s decision to press ahead with the third runway, a proposal that has been dogged by political infighting and environmental concerns for decades. 

But Tony Bosworth, climate campaigner at Friends of the Earth, said the plan was the equivalent of adding an airport the size of Gatwick, which is the second largest in Britain.

“Expanding Heathrow simply isn’t compatible with our legally binding climate targets, even if the government meets its hugely optimistic assumptions for emerging technologies,” he said. 

Tuesday’s decision will feed into the government’s overhaul of the planning framework for any Heathrow expansion, known as the Airports National Policy Statement.

Alexander said selection of the Heathrow airport scheme did not represent a final decision on the third runway scheme or its design. “Any amendments to the ANPS will be subject to consultation and parliamentary scrutiny next year.”  

OpenAI is a money pit with a website on top. That much we know already, but since OpenAI is a private company, there’s a lot of guesswork required when estimating the depth of the pit.

HSBC’s US software and services team has today updated its OpenAI model to include the company’s $250bn rental of cloud compute from Microsoft, announced late in October, and its $38bn rental of cloud compute from Amazon announced less than a week later. The latest two deals add an extra four gigawatts of compute power to OpenAI’s requirements, bringing the contracted amount to 36 gigawatts.

Based on a total cumulative deal value of up to $1.8tn, OpenAI is heading for a data centre rental bill of about $620bn a year — though only a third of the contracted power is expected to be online by the end of this decade.

To check OpenAI ability to pay, HSBC’s team first had to build a model to forecast revenues.

Its starting point is to put user numbers on an S-curve that by 2030 reaches 3bn, “equivalent to 44 per cent of the world’s adult population” ex China. That’s versus an estimated total user base last month of approximately 800mn:

Advertising, agentic AI and possibly even Jony Ive’s thing can contribute to revenue by the end of the decade, For now, the business is mostly cajoling this user base to sign up for subscriptions.

LLM subscriptions will become “as ubiquitous and useful as Microsoft 365”, HSBC says. It models that by 2030, 10 per cent of OpenAI users will be paying customers, versus an estimated 5 per cent currently.

The team also assumes LLM companies will capture 2 per cent of the digital advertising market in revenue, from slightly more than zero currently.

What results is gangbusters revenue growth:

... but with a parallel rise in costs, meaning OpenAI is expected to still be subsidising its users well into next decade:

... meaning each new OpenAI fundraise will be for shovelling cash to data centre owners:

For what it’s worth, we can summarise a few of the assumptions HSBC is making for the estimates above:

• Total consumer AI revenue will be $129bn by 2030, of which $87bn comes from search and $24bn comes from advertising.
• OpenAI’s market share slips to 56 per cent by 2030, from around 71 per cent this year. Anthropic and xAI are both given market shares in the single digits, a mystery “others” is assigned 22 per cent, and Google is excluded entirely.
• Enterprise AI will be generating $386bn in annual revenue by 2030, though OpenAI’s market share is set at 37 per cent from about 50 per cent currently.

The bottom line is that, for OpenAI, it’s nowhere close to enough.

HSBC’s model assumes that OpenAI’s rental costs will be a cumulative $792bn between the current year and 2030, rising to $1.4tn by 2033. The projection matches OpenAI’s eight-year guidance that CEO Sam Altman is exasperated at being asked to discuss.

OpenAI’s cumulative free cash flow to 2030 may be about $282bn, it forecasts, while Nvidia’s promised cash injections and the disposal of AMD shares can bring in another $26bn. The broker also includes OpenAI’s $24bn of undrawn debt and equity facilities and, at the 2025 mid-year point, its $17.5bn of available liquidity.

Squaring the first total off against the second leaves a $207bn funding hole, to which HSBC adds a $10bn cash buffer for safety’s sake.

These estimates might prove overly cautious, though guessing how is a finger-in-the-air exercise.

Each extra 500mn users OpenAI can grab will add about $36bn to cumulative revenue between now and 2030, while converting 20 per cent of the customers to paid subscriptions might bring in an additional $194bn over the same period, HSBC says. Assumptions for LLM spend and computing costs are flexed in similar ways, though the possibility of OpenAI chancing on Artificial General Intelligence is not put through the model.

If revenue growth doesn’t exceed expectations and prospective investors turn cautious, OpenAI would need to make some hard decisions. Oracle has spooked debt markets, Microsoft’s support for OpenAI has been a bit flip-flop lately, and the next-biggest shareholder is SoftBank.

The best worst option might be to call in some favours and walk away from data centre commitments, either before or at the usual contracted period of four to five years. HSBC says:

What might not be clear from the above is that the HSBC software team is very, very bullish on AI as a concept. Here’s an entirely representative section of the note:

And when it’s put like that, is $207bn to tide things over really such a big ask?

Groups such as BASF and Ecolab are responding to the risk of rising PFAS litigation and increased regulation

Leading chemicals companies have quietly begun to phase out “forever chemicals” from their production as the risk of litigation grows and the EU looks to impose broad restrictions on their use.

The group of chemicals known as PFAS, or per- and polyfluoroalkyl substances, totals more than 10,000 and is found in everything from waterproof clothing to frying pans. They are dubbed “forever chemicals” because of their persistence in the environment and human bodies, where they have been linked to increased cancer rates and infertility.

As the health risks have become better understood, concerns around the accumulation of PFAS have led to an increasing number of lawsuits against companies in the US. The EU is currently working on a potential PFAS ban, with some allowances for those materials that cannot easily be replaced.

German chemicals company BASF told the Financial Times it will “remove” products formulated with PFAS chemicals from its portfolio covered by the EU’s proposal, without specifying when the process would be completed.

BASF is facing more than 4,500 lawsuits in relation to PFAS contamination, the bulk of them in the US, according to its most recent annual report. The cases generally relate to the use of a firefighting foam produced by Swiss chemicals company Ciba before it was acquired by BASF in 2008.

Ecolab, the US-based chemicals company, also said it will phase out products manufactured “intentionally” with PFAS from its portfolio by the end of 2026.

US chemicals manufacturer 3M, which is facing multiple lawsuits in the US, was one of the first to make the move, announcing in 2022 that it would exit PFAS manufacturing globally by the end of this year. “We are on schedule to do so,” said Maxime Bureau, its European director for government affairs.

The group’s decision was based on consideration of multiple factors such as “accelerating regulatory trends focused on reducing or eliminating the presence of PFAS in the environment and changing stakeholder expectations”, Bureau said.

According to an annual survey of the industry released this week from campaign group ChemSec, one-third of chemicals producers planned to end their use of PFAS.

Many chemical companies were “trying to phase out fast” but would face litigation risk from PFAS for “many years, if not decades to come”, as the number of personal injury claims could grow, warned Jonas Weisbach, an ESG analyst at Union Investment.

The decision to exit PFAS use put BASF on the “right course”, he said, adding that for many companies the economic opportunity was small compared with the reputational risk.

Both BASF and Ecolab had published position papers on their websites earlier this year without widely publicising their moves.

Ecolab said it had been sharing its paper with customers privately but, following increased inquiries, had decided to publish it online.

BASF said it had discussed the policy with its stakeholders before sharing its position. The German group said it only produced a “limited number” of products made with PFAS, adding that it planned to offer alternatives to customers “in the coming years”.

The European Chemicals Agency (ECHA) said in August that it would prioritise its work on the PFAS ban in several specific sectors including technical textiles, military uses and some medical applications. Alongside an assessment for a full ban, ECHA said that it would consider the effects of time-limited exemptions to the restriction or allowing the continued use of PFAS in certain circumstances “where the risks can be controlled”.

Jessika Roswall, the EU’s environment commissioner, told the FT that Brussels wanted to “simplify and at the same time modernise” its core chemicals legislation “and give clarity on the use of PFAS”.

“Insights and experience from industry frontrunners who have already shifted to sustainable alternatives can help shape our initiatives successfully,” she said.