(Idea) Birchtech - A Special Situation Poised For Growth In PFAS Water Treatment
By: Jon Costello
My investigation into PFAS, or “forever chemicals,” during my research on Chemours (CC) led me to an interesting company positioned for significant growth in its water-treatment business. PFAS has become a popular focus for environmentalists because of its alleged negative health effects. Consequently, efforts to remove these chemicals from drinking water are expected to become a top priority.
The company is Birchtech (OTCQB:BCHT). It’s an intellectual property-focused specialty carbon company. I usually avoid investing in technology development companies, but this one appears to offer a significant margin of safety and a good likelihood of successfully deploying its new PFAS water treatment system.
Birchtech’s Background
Birchtech has developed technologies and systems in “granular activated carbon” (GAC), small granules of highly porous carbon that have been “activated” to increase their internal surface area. The pores in the carbon absorb contaminants from water or gas onto their surface. These granular particles pack into columns through which water can flow at a controlled rate. Eventually, they can be removed and thermally reactivated for reuse. Birchtech’s ability to recycle used GAC reduces the lifecycle cost of its systems for customers.
Source: Birchtech December 2025 Presentation.
Initially, the company used its GAC to cut mercury emissions from coal-fired power plants. Its SEA mercury-capture technology was first developed at the University of North Dakota’s Energy and Environmental Research Center in Grand Forks. Birchtech’s predecessor entity, Midwest Energy Emissions Corp., was created in December 2008 to commercialize this technology.
In October 2024, the company was rebranded as Birchtech Corp. to reflect its pivot into clean water management, leveraging its activated carbon expertise to target PFAS and other wastewater contaminants.
Investment Proposition
Birchtech’s investment proposition has two parts. The first is a legal or event-driven special situation. The second is the growth potential for the company’s GAC operation. I’ll start with the legal side.
Birchtech is in an unusual position of winning a major court victory for a product in a market that has entered a structural decline. Its legacy coal-emissions treatment business is well past its prime, but it holds enforceable intellectual property rights that several utilities have infringed upon. The company has already recovered more than $35 million through settlements and licensing agreements stemming from its claims against parties suspected of infringing its patents.
Birchtech’s Litigation Asset
The anchor event for Birchtech as a special situation is its court victory in a patent infringement case it brought against a group of coal utilities. The case has been ongoing since 2019 and has not yet reached a final verdict.
In 2019, Birchtech’s predecessor entity, Midwest Energy Emissions Corp., sued a group of CERT-affiliated coal utilities and others for infringing two of its SEA mercury emissions patents. “CERT” refers to coal utilities that operated refined-coal facilities, which purchased raw coal, processed it, and sold “refined coal” back to the plant. Midwest Energy Emissions claims that the refined coal operations infringed its mercury-control methods by burning the refined coal with activated carbon injection.
In March 2024, after a five-day trial, a Delaware federal jury found that the utilities willfully infringed on the patents. It awarded Birchtech $57 million in damages for the utilities’ use of its technology. The award pertains only to past infringement.
Because the infringement was found to be willful, Birchtech is legally entitled to ask the judge for enhanced damages of up to three times the jury’s original verdict, as well as pre-judgment and post-judgment interest, and attorneys’ fees. Birchtech and its attorneys, who are working on a contingency basis, are now seeking $160 million from the court. The sum includes enhancements for the willful nature of the infringement, as well as interest and legal fees.
After the defendants’ loss, they moved for a new trial and a separate judgment without a jury. In November 2025, the trial judge presiding over the case denied the request and upheld the jury’s infringement and damages findings. The decision confirmed the verdict, preventing the defendants from overturning it or reducing damages. This outcome eliminated the risk of a district court reversing the verdict. The risk now shifts to typical legal challenges, including the possibility of appeals delaying a final decision and uncertainties about the collection process and its timing.
Since the trial began in 2019, Birchtech has used legal settlements with defendants to convert these parties into license and supply customers. Three utilities that were defendants in Birchtech’s 2024 lawsuit have settled and entered into licensing agreements. To date, the company has realized more than $35 million in license revenue in connection with its patent infringement claims. This amount is in addition to the $57 million court verdict.
Separate from this lawsuit, Birchtech filed three new lawsuits in July 2024 against 14 defendants in Arizona, Missouri, and Iowa. All defendants are utilities that used Birchtech’s mercury control methods. This is a separate case that is less likely to lead to a significant damage award.