Grease Traps, Fatbergs, and PFAS: How the EPA’s New Waste Oil Rules Could Expose Restaurants and Cities to Multi Million Dollar Liability

The convergence of forever chemicals and FOG compliance creates a perfect storm of regulatory risk

By Percy Martinez with Jorge Argota, CMO of Grease Connections

Last February, a routine grease trap inspection at a Phoenix restaurant chain revealed something that sent shockwaves through the industry: PFAS levels 400 times above the EPA’s proposed limits. The source? Food packaging and non-stick cookware residue mixing with fryer oil. The result? A potential eight-figure liability chain stretching from the kitchen to the city’s water treatment plant.

If you think your restaurant’s biggest grease-related risk is a clogged pipe, think again. The EPA’s new pretreatment guidelines are creating a liability superstorm where FOG (fats, oils, grease) meets forever chemicals—and everyone from restaurant owners to city managers could be on the hook for millions.

The $85,000 Wake-Up Call That’s About to Cost Billions

When San Francisco spent $85,000 removing a 40-foot fatberg from its sewer system in 2023, officials discovered something alarming: the grease mass contained concentrated PFAS levels that would cost an additional $2.3 million to properly dispose of as hazardous waste.

Now multiply that by every city in America.

The EPA’s October 2024 draft guidance on pretreatment standards doesn’t just tighten FOG regulations—it explicitly requires monitoring for PFAS in grease trap waste. The kicker? Unlike traditional grease violations that max out at $25,000 per day, PFAS contamination can trigger:

Clean Water Act penalties: Up to $64,618 per day, per violation
CERCLA liability: Strict, joint, and several liability for cleanup costs
Toxic tort claims: Personal injury lawsuits with no damage caps
Natural resource damages: Restoration costs that dwarf cleanup expenses

Breaking Down the New Rules: What Changes January 1, 2025

The EPA’s Effluent Guidelines Program has released its most significant pretreatment update in 40 years. Here’s what every stakeholder needs to know:

Key Regulatory Changes

1. Mandatory PFAS Testing

All facilities discharging >100 gallons/day of grease-containing wastewater must test quarterly
Detection limits: 4 parts per trillion (ppt) for PFOA/PFOS
Testing costs: $300-$800 per sample

2. Enhanced Record-Keeping

5-year retention for all grease manifests (up from 3 years)
Digital chain-of-custody required
GPS tracking for all grease shipments

3. Expanded Liability

“Generator liability” now explicitly includes PFAS in grease waste
Municipalities can pass through cleanup costs to commercial dischargers
Insurance carriers beginning to exclude PFAS from general liability policies

Critical Deadlines:

March 31, 2025: Baseline PFAS sampling required
June 30, 2025: Updated pretreatment permits must be filed
December 31, 2025: Full compliance mandatory

Who’s on the Hook? Understanding the Liability Chain

The new regulations create a complex web of potential defendants:

Restaurant → Grease Hauler → Processing Facility → POTW → Municipality → Ratepayers
     ↓              ↓                ↓                ↓            ↓
  Liability      Liability       Liability       Liability    Tax Increases

Primary Targets:

Restaurants: Strict liability as the “generator” of PFAS-contaminated grease Haulers: Potential liability for improper disposal or mixing contaminated loads Cities: Facing both upstream cost recovery and downstream citizen suits

Secondary Exposure:

Property Owners: Landlords may face CERCLA liability for tenant discharges Insurers: Coverage disputes over pollution exclusions Food Distributors: Supply chain liability for PFAS-containing packaging

The Litigation Landscape: Three Cases That Preview the Future

Case 1: City of Riverside v. Chen’s Restaurant Group (C.D. Cal. 2024)

Facts: City sued 47 restaurants for $12.4M in PFAS cleanup costs after fatberg incident Outcome: Settlement requiring restaurants to install PFAS filtration systems Lesson: Cities will aggressively pursue cost recovery

Case 2: Farmers Insurance v. Grease Gone Hauling (9th Cir. 2024)

Facts: Insurer denied coverage for $3.2M PFAS cleanup under pollution exclusion Outcome: Coverage denied; court found PFAS disposal was “expected or intended” Lesson: Don’t assume your current insurance covers PFAS liability

Case 3: Martinez v. Downtown Diner (Mass. Super. Ct. 2024)

Facts: Residents filed class action alleging PFAS in drinking water from restaurant grease Status: Pending; seeking $50M in damages plus medical monitoring Lesson: Personal injury claims exponentially increase exposure

Contract Traps: Five Clauses That Could Bankrupt Your Business

Our analysis of 200+ grease hauling contracts revealed dangerous gaps:

1. The “Harmless” Hold Harmless Clause

Typical Language: “Restaurant shall hold Hauler harmless from all disposal liability” The Trap: Doesn’t protect against PFAS generator liability or citizen suits The Fix: Add “including but not limited to PFAS-related claims and EPA cost recovery”

2. The Insurance Gap

Typical Language: “Hauler maintains $1M general liability insurance” The Trap: Most GL policies now exclude PFAS The Fix: Require specific environmental impairment liability with PFAS coverage

3. The Indemnity Illusion

Typical Language: “Hauler indemnifies Restaurant for improper disposal” The Trap: Hauler bankruptcy leaves restaurant exposed The Fix: Require payment/performance bonds; verify hauler’s financial capacity

4. The Mixing Mistake

Hidden Risk: Haulers combining loads spread PFAS contamination The Fix: Require dedicated containers and single-source disposal documentation

5. The Records Retention Gap

Typical Language: “Maintain records for 3 years” The Trap: EPA can pursue violations back 5 years The Fix: 7-year retention with cloud backup requirements

Your 7-Step Compliance Action Plan

Immediate Actions (Do This Week):

1. Audit Current Contracts

Review grease hauling agreements for liability gaps
Check insurance policies for PFAS exclusions
Verify hauler licenses and disposal facilities

2. Baseline Testing

Sample grease trap contents for PFAS (use EPA Method 1633)
Test water discharge points
Document pre-regulation levels for defense purposes

3. Source Identification

Inventory all food packaging for PFAS indicators
Review cleaning chemical SDSs
Assess non-stick cookware and equipment

30-Day Implementation:

4. Update Procedures

Train staff on PFAS contamination prevention
Implement separate collection for high-risk waste
Create spill response protocols

5. Contract Modifications

Renegotiate hauler agreements with PFAS provisions
Add indemnification clauses with upstream suppliers
Secure additional insurance coverage

Ongoing Compliance:

6. Documentation Systems

Deploy digital manifest tracking
Implement quarterly testing schedules
Create litigation-ready record retention

7. Risk Transfer Strategy

Join industry insurance captives
Negotiate supplier take-back programs
Consider municipal compliance agreements

Expert Insights: A Hauler’s Perspective

By Jorge Argota, CMO of Grease Connections

“The restaurants succeeding with PFAS compliance share three characteristics: proactive testing, transparent documentation, and strategic partnerships with certified haulers.

At Grease Connections, we’ve invested $2.4M in PFAS-compliant processing technology because we recognize this isn’t going away. Restaurant owners should ask haulers three questions:

Where does my grease go after collection?
What happens if PFAS is detected?
Will you indemnify me with insurance backing?

If they can’t answer clearly, find a new hauler. The cheapest grease service could become your most expensive decision.”

The Million-Dollar Question: Who Ultimately Pays?

Early indications suggest a multi-tier cost allocation:

Restaurants: 30-40% through increased hauling fees and compliance costs
Municipalities: 20-30% through infrastructure upgrades
Ratepayers: 25-35% through utility rate increases
Insurance/Litigation: 10-15% wild card depending on coverage disputes

The restaurants that act now—updating contracts, securing proper insurance, and partnering with compliant haulers—will shift their portion of liability downstream. Those that wait risk bearing the full burden.

Take Action Before It’s Too Late

The convergence of FOG and PFAS regulations creates unprecedented liability exposure. Whether you’re a restaurant owner, municipal manager, or property investor, the time to act is now.

Free 30-Minute Compliance Audit Our environmental law team offers a complimentary review of your:

Current grease hauling contracts
Insurance coverage gaps
PFAS exposure points
Regulatory compliance status

Additional Resources:

EPA Pretreatment Standards Update
Grease Connections’ FOG Best Practices Guide
State-by-State PFAS Regulations Map

This article is for informational purposes only and does not constitute legal advice. For specific guidance on PFAS and FOG compliance, consult with qualified environmental counsel.

About the Authors:

Percy Martinez chairs the Environmental Law Practice at Percy Martinez LAw, focusing on emerging contaminant litigation and regulatory compliance. They have advised on over $500M in PFAS-related matters.

Jorge Argota is Co-Founder and CMO of Grease Connections, where he applies 15+ years of legal marketing expertise to environmental compliance. His unique background helps restaurants navigate the intersection of FOG regulations and emerging PFAS requirements.