By Devon Santistevan
Tariffs on imported activated carbon have arrived in the water treatment industry, with effects that are just beginning to ripple through the market. Roughly 25 to 30% of the activated carbon used in the U.S. is imported, with about a third of that imported volume coming from Sri Lanka and India, which are subject to tariffs of 20% and 50%, respectively.
While some utilities may have a year’s worth of carbon on hand, most keep much smaller inventories, in some cases a month’s supply (or less in challenging water times). As contracts expire, higher prices tied to tariffs are being passed directly to end users now entering the bid cycle, and this tariff induced pricing pressure will continue as more contracts come up for bid. For utilities reliant on coconut-based activated carbon, the impact has been especially sharp, since virtually all coconut carbon is imported, leaving no domestic supply alternative.
Regulations, too, are squeezing the industry. While drinking water regulations on PFAS, for example, are subject to change, what is not expected to change are the federal maximum contaminant levels (MCLs) of 4 parts per trillion for two common PFAS substances: PFOA and PFOS. And while the EPA has proposed extending the compliance deadline from June 2029 to June 2031, it hasn’t proposed amending or rescinding these MCLs. Water utilities accordingly need to plan on meeting those MCLs for PFAS in drinking water; activated carbon is a leading treatment technology, and increasing demand will ultimately put pricing pressure on water treatment plants already dealing with tariff-based price increases.
Here are three strategies that can potentially be used to protect capital and operating budgets from the crunch of foreign tariffs and increasing regulation. While any one of them offers benefits, using all three is the strongest defense to pricing pressure.
Strategy 1: Choose a Domestic Supplier
The most direct way to sidestep tariffs is to work with a U.S.-based supplier, ideally one that sources its feedstock and manufactures activated carbon products such as GAC (granular activated carbon) and PAC (powdered activated carbon) entirely within the United States. With zero imported inputs, these products are shielded from tariff increases that will most likely drive up costs for utilities relying on imported carbon. Domestic sourcing translates to more stable pricing and greater budget certainty for operators.
Domestic production also reduces exposure to supply chain disruptions linked to international shipping delays, customs backlogs and changing trade policies, all of which can compound the financial impact of tariffs.
Strategy 2: Choose a High Performing GAC
A high-quality activated carbon can treat much more water than a low-quality carbon can, which reduces the amount of high-quality carbon that must be purchased – especially relevant, given the anticipated surge in demand for activated carbon driven by recently enacted PFAS regulations. Using GAC as an example, performance is the result of the capacity, the adsorption rate and the purity of the GAC.
Capacity refers to how much of a contaminant GAC can adsorb before it becomes saturated and ineffective. Higher-capacity GAC can treat more water with the same volume of media, thanks to properties like greater surface area and optimized pore structure. This slows exhaustion and reduces the frequency of media change-outs, which drive up costs for labor, replacement media, downtime and disposal.
When GAC has a higher adsorption rate, it can either treat water more quickly or achieve the same treatment results using less carbon. This performance can directly influence capital costs, since GAC with superior adsorption properties allows the use of smaller vessels, which are generally less costly to purchase, install and operate.
GAC purity matters because contaminants in the media can leach into treated water, requiring extra chemicals, media or time to address. Bituminous coal-based GAC often contains arsenic, but some products are pre-washed to lower leachable arsenic levels. This reduces the wash water and startup time needed to meet arsenic MCLs, cutting preconditioning water use by as much as 66% compared with standard bituminous coal GAC.
When capacity is high, adsorption is fast and purity is strong, operators can purchase as little as half as much GAC to treat the same amount of water (said another way, high quality GAC can treat twice as much water as low quality GAC). The implications on the bottom line are significant – not just because the treatment plant can buy half as much product, but also because it can lower operational costs due to reductions in pre-washing, media changeouts and spent media disposal.
Strategy 3: Choose a Vertically Integrated Company
The availability of activated carbon should not be overlooked, especially in the shadow of looming demand. Partnering with a vertically integrated GAC supplier can shore up supply chain reliability, another risk when purchasing from overseas. Arq, for example, manufactures its GAC entirely in the U.S. and controls the process from feedstock through finished product, delivering consistent quality, reliable supply and stable pricing unaffected by trade policies.
With strict internal quality controls and continuous testing of media properties, Arq ensures uniform performance and minimal variability, giving customers both operational confidence and protection from international market pressures. In addition, vertical integration allows the company to quickly scale production to meet sudden spikes in demand, such as when an unexpected water quality event increases the need for GAC.
Louisville Water Taps Domestic Partner to Address Algal Superbloom
In June 2024, Louisville Water Company confronted one of its most significant water quality challenges in decades: an algal superbloom in the Ohio River that produced exceptionally high concentrations of 2-methylisoborneol (MIB).
Fueled by drought conditions and warmer river temperatures, the superbloom persisted for eight weeks and drove MIB levels at the utility’s intake to 128 parts per trillion – more than 20 times the threshold that typically triggers treatment. Louisville Water, which serves nearly one million residents, responded immediately, initiating large-scale dosing of powdered activated carbon (PAC), the most effective treatment for MIB.
Under normal operations, Louisville Water might use 160,000 pounds of PAC in a year. During the bloom, however, demand surged to nearly a million pounds in just two months. Meeting this unprecedented need required extraordinary support from the utility’s PAC supplier, Arq.
As a vertically integrated U.S. manufacturer, Arq rapidly scaled production at its Louisiana plants, leveraged its own domestic supply from Kentucky and deployed dedicated carriers to deliver PAC every one to five days. Between June 23 and Sept. 5, Arq delivered nearly 957,000 pounds of CarbPure TRA to Louisville Water. Close coordination between Arq’s customer service team and Louisville Water’s around-the-clock staff ensured uninterrupted treatment and minimal customer complaints, despite the record-setting bloom.
Beyond Tariffs: Additional Benefits of a High Quality, Domestic Supply
Tariffs, stricter regulations and growing water quality challenges are converging to put financial pressure on utilities. While these forces are largely outside a utility’s control, utilities can take steps to insulate themselves.
Choosing a fully domestic supplier avoids tariff costs and increases logistical efficiency, ensuring operators have reliable access to carbon at a predictable cost, regardless of global market fluctuations. Purchasing high-quality activated carbon shrinks a plant’s need for product when demand is expected to soar while also reducing operating expenses by extending run times, lowering change-out frequency and minimizing disposal and preconditioning requirements.
Partnering with a vertically integrated manufacturer adds another layer of resilience, with consistent quality, transparent supply chains and the ability to rapidly scale production when unexpected events suddenly increase demand.
Together, these strategies position utilities to meet regulatory requirements, safeguard water quality and manage costs even as tariffs and environmental pressures reshape the activated carbon supply landscape.
Devon Santistevan is a senior marketing analyst at Arq, a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials. Formerly known as ADA and Advanced Emissions Solutions (ADES), the company was founded on solutions to control mercury and other contaminants for power generation and industrial companies.
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