Comparative Analysis of Phase I Environmental Due Diligence Findings Across Industrial, Biogas, and Brownfield Sectors

In the context of a multitude of due diligence procedures, Environmental Due Diligence (EDD) is a technical investigation and assessment process designed to support commercial transactions involving “assets”. It aims to identify, analyse and quantify potential liabilities, risks and environmental costs associated with the target's current and past activities, which may have or may have had a potential impact on the environment, and its compliance with current environmental legislation, in order to obtain a comprehensive and impartial overview summarising all environmentally relevant information associated with the target, facilitating the definition of priorities for action and investments necessary to ensure regulatory compliance and improve environmental performance. This thesis, carried out in collaboration with Ramboll Italy S.r.l., focuses on the comparative analysis of three different commercial sectors (Industrial, Biogas Plants, Brownfield) in which, but not only, Ramboll carries out its consulting activities, through the analysis of ten Phase I EDD cases for each sector. The topics for which points of attention (findings) were identified, the relative risk levels (Low, Medium, High), and the cost scenarios (Most Likely Case and Reasonable Worst Case) are discussed and reported, with particular focus on the topics with the highest number of findings, for which the main recommendations in relation to the issues identified are reported. Sixteen issues were identified in the biogas sector, fourteen in the industrial sector, and eleven in brownfield sites. The main topics found included environmental permits, water and chemical management, waste and asbestos management, atmospheric emissions for active industrial sites only, represented by similar and different issues within the sectors analysed. The issue of potential soil and aquifer contamination, as well as the lack of analysable documentation during due diligence processes, was common to all sectors. On average, there are approximately 8.5 findings per site relating to the industrial sector, approximately 10 findings relating to biogas plants and approximately 5 findings for brownfield sites. The estimated average cost per site to address the issues identified for biogas sites is approximately €13,000 for MLC and approximately €23,100 for RWC, while for industrial sites it is approximately €379,700 for MLC and approximately €613,600 for RWC. As regards brownfields, the Phase I analysis does not allow a comprehensive estimate of the possible costs of resolving the issues identified without more detailed investigations (Phase II) into the various issues/problems (e.g. depth of contaminated soil, characterisation of contamination to be remediated, type of waste to be disposed of or sent for recovery, etc.). It is evident that the findings are derived from the analysis of a limited number of cases and, consequently, they are not representative of the entire sector. Nevertheless, they provide an insight, albeit partial, into the potential issues identified with EDD Phase I investigations at the various sites covered by the thesis.