Energy Infrastructures: The Environmental And Legal Cloud Around Haifa
What looked like accounting relief around Haifa in 2025 does not remove the overhang itself: the dismantling liability fell to ILS 21 million, but the company still faces monitoring obligations, contamination findings, a criminal indictment, a road-levy provision of about ILS 249 million, and PFAS exposure with no final price tag. In other words, one line item fell, but the risk fronts multiplied.
Haifa Is No Longer a Footnote
The Haifa paradox in 2025 is that the environmental line suddenly looks like a profit contributor. The company reports net environmental costs and investments of negative ILS 58 million in 2025, after net cost of about ILS 153 million in 2024. That sounds almost like closure. It is not. The reason for the change is not that the cloud disappeared, but that the memorandum with the Haifa municipality moved from a rough estimate into a world of dated obligations, demolition permits, and contractor engagements. In accounting terms that improved the result. In economic terms it only broke Haifa into several fronts that are still open.
The main article already showed that 2025 profit got a meaningful lift from Haifa. This continuation isolates what sits behind that line: a binding timetable for tank demolition and the eventual shutdown of the old fuel port, a monitoring requirement that escalated into a business-license threat, contamination findings that still require treatment, a criminal indictment that is still unresolved, a road-levy provision of about ILS 249 million on the North Lands, and PFAS policy that still has no final cost estimate. The provision shrank. The cloud itself did not.
| Front | What already happened | Hard number | Why it is still open |
|---|---|---|---|
| Haifa memorandum and tank demolition | Demolition permits were received in September 2025 | The dismantling liability was updated to ILS 21 million | The company still has to demolish, evacuate active tanks, and keep operations running until the terminal is vacated |
| Air monitoring and licensing | A hearing notice arrived in June 2025, an alternative meeting summary followed in August, and the monitoring array was installed in November 2025 | About ILS 9.1 million of fees and levies replaced the Corridor A landscaping obligation | The municipal front did not disappear, it only moved into a more managed format |
| Soil and groundwater contamination | Soil surveys were completed in 2026 | No final cost estimate | Local contamination was found at the terminal and point contamination at Elroi, and the treatment process is still ongoing |
| Criminal indictment | Filed in November 2024, mediation did not produce an agreement | No exposure estimate | Evidence hearings were set for May and June 2026 |
| North Lands | The district court rejected the company’s petition, and the Supreme Court appeal is still pending | Provision of about ILS 249 million, including about ILS 79 million of linkage and interest | This is no longer a theoretical risk. It is an already-booked liability |
| PFAS | A regulatory policy and added poison-permit conditions were issued | No final estimate, but costs may be material | The replacement will require new foam, system cleaning, and disposal of old material |
The chart shows why Haifa is not a one-off event. Each obligation runs on a different clock, and in some cases from a different trigger date. So even after the demolition permits were obtained in September 2025, the company did not exit the issue. It simply moved from open legal threat into execution under a timetable.
The Memorandum Cut the Provision, Not the Overhang
The August 8, 2024 memorandum of understanding, which received the force of a court judgment, is highly binding. The company undertook to demolish and clear the nine northern tanks at the terminal in stages, to begin demolishing seven inactive tanks within one year of receiving the demolition permit, and to complete the evacuation of the two active tanks within 30 months of receiving the permit. In addition, it undertook to end operations at the fuel port and the 20 Acres site within 24 months of the start-up of a new fuel-products port, and to perform landscaping rehabilitation in Corridor A within 9 months of signing.
This is where a fast read of 2025 can go wrong. Yes, the company revised the dismantling and removal obligation downward. After receiving the demolition permits in September 2025 and signing contracts with contractors for most of the works, the estimated obligation fell by about ILS 82 million and stood at ILS 21 million at year-end 2025. Of that update, about ILS 58 million attributable to the inactive tanks was recognized immediately in other income, and another roughly ILS 24 million was deducted from the cost of the active tanks. But that does not mean Haifa was resolved. It means the company moved from a conservative estimate under uncertainty to a more execution-based estimate.
The cost of that transition is still highly visible. Depreciation expense rose by ILS 28.1 million in 2025, after an increase of about ILS 27.4 million in 2024, because the useful lives of the Haifa assets were shortened and then updated again. The two active tanks are now expected to be vacated in March and June 2027, while the estimated useful life of the fuel-port and 20 Acres assets was extended by three more years, through the end of June 2034. In other words, the company obtained some accounting breathing room, but it paid for it through accelerated depreciation, real-world execution, and a multi-year timetable.
The arrangement with the municipality is also far from frictionless. The municipality agreed to allow continued terminal operations until the site is vacated, but only if the company regularizes the unpermitted construction. By summer 2025 that front had already escalated into a hearing notice to examine cancellation of the business license. In August 2025 the parties held an alternative meeting instead of a hearing, and agreed that Haifa municipality would advance permits both for the monitoring array and for demolition and evacuation of the northern tank row, while the company would advance the monitoring build-out. In September 2025 another cost arrived: about ILS 9.1 million of fees and levies that replaced the Corridor A landscaping work. That does not change the thesis, but it does show that the path to compliance remains expensive and milestone-driven.
This chart is intentionally not one cumulative total. It combines a period charge, a liability balance, an agreed payment, and a legal provision. That is exactly why it is useful: one reduction in the dismantling obligation does not erase the fact that Haifa is still generating pressure from several accounting, legal, and operating directions at the same time.
Monitoring, Contamination, and the Indictment
The environmental front around Haifa neither starts with the municipal memorandum nor ends with it. On water and groundwater, the company runs monitoring wells and reporting to the Water Authority, and by 2026 soil surveys had already been completed at all facilities. The reassuring finding is that most sites did not show soil contamination. The reason the file cannot be closed is that local contamination was found at the terminal and point contamination was also found at Elroi, and the company is acting to treat both in line with the authorities’ instructions.
Above that sits an older unresolved layer. The company cites a 1997 Ministry of Environmental Protection report, according to which there is massive soil and groundwater contamination in the fuel-pipeline corridor near the Haifa fuel port, attributed to historical leaks, as well as claimed contamination hotspots at the terminal and at Elroi from the period when the sites were operated by Bazan. The company says it cannot currently estimate the financial exposure because the scope of contamination, the time of origin, and the identity of the responsible party are not known to it. It also argues that it has no pipeline in that corridor and therefore bears no responsibility there. This is a material point: even when there is a legal defense line, the exposure is still not numerically closed.
The air front tells a similar story. For years there was a dispute over the need to establish a continuous monitoring array around the Kiryat Haim terminal. In June 2025 that dispute escalated into a hearing notice from Haifa municipality, among other things on alleged poison-permit breaches and possible cancellation of the business license. In November 2025 the monitoring array was installed, approved by the Ministry of Environmental Protection, and anchored in the poison permit. That is an important step, but it matters precisely because it shows how regulatory pressure, not routine voluntary compliance, was what ultimately forced the issue forward.
Over all of this still hangs the criminal indictment filed in November 2024 after the May 2022 fire in an empty tank at the Kiryat Haim facility during roof-dismantling works. The company describes a mediation process that did not lead to agreement and then a return to the main litigation track, with evidence hearings set for May and June 2026. At this stage the company’s legal advisers say they cannot estimate either the outcome or the extent of exposure. The analytical implication is straightforward: even if the monitoring line has now been addressed, the enforcement front itself is still active.
North Lands: Where the Big Money Sits
The Haifa overhang is not only about the terminal, the tanks, and monitoring. It also sits on the North Lands, and that is where the biggest number now sits. Back in June 2021 the company was required to pay Haifa municipality a road levy of about ILS 170 million for road works that, according to the municipality, were performed on the North Lands. The petition it filed was rejected by the district court in February 2024, and by the end of 2025 the total provision for the claim stood at about ILS 249 million, including about ILS 79 million of linkage and interest. The levy principal itself, about ILS 170 million, was capitalized to fixed assets as part of the cost of the North Lands.
The key point here is not just the size of the number, but its nature. This is no longer a theoretical exposure that may or may not crystallize. It is a liability the company has already booked, while the appeal it filed to the Supreme Court in May 2024 is still pending and its legal advisers cannot estimate either the odds of success or the odds of settlement. Anyone building an upside case around the North Lands therefore has to remember that part of that upside is already encumbered by a municipal and legal fight.
The issue runs deeper because that same upside is not clean planning-wise either. The company writes that if one of the Haifa Bay innovation plans advances, the North Lands project will not be executable. So the road levy is not just a big number next to a land parcel with optionality. It sits on an asset whose realization depends both on the legal outcome and on the planning direction of Haifa Bay. That is exactly why the road levy belongs inside the Haifa overhang, not as a technical real-estate footnote.
PFAS: The Next Cost Wave Still Has No Final Estimate
Another layer that has not yet fully entered the numbers is PFAS. In November 2024 the Ministry of Environmental Protection published a regulatory policy for these materials in industry, and it is meant to be embedded in the company’s poison permit. The company already received additional permit conditions across all facilities and national pipeline lines that will require it to replace all firefighting concentrates with PFAS-free concentrates.
The problem here is not only buying new foam. The company explains that the process will also require cleaning pipelines and tanks, replacing system components, adapting the system to the new foam type, and disposing of the old concentrates as hazardous material. The company did materially reduce PFAS-containing foam concentrates already in 2024 and continued that process in 2025, and expired PFAS concentrates were already removed as hazardous waste. But as of the report date there is still no final estimate for the total cost, because the relevant standards and guidance from the fire services and the environmental ministry have not yet been finalized. On the company’s own initial estimates, material costs may ultimately be required.
That matters especially in a company that is already loaded with infrastructure projects and Haifa-related compliance work. PFAS is not a one-off accounting event. It is another layer of regulatory capex and maintenance that could arrive exactly while the company is still dismantling, monitoring, and regularizing the terminal.
Bottom Line
The post-2025 Haifa message is simpler than the accounting suggests. One line item became smaller, but the system as a whole did not become clean. On one hand, demolition permits were obtained, the monitoring array was installed, the dismantling liability fell to ILS 21 million, and the municipality moved from direct confrontation into a more supervised execution track. On the other hand, contamination is not closed, the indictment is alive, the road levy is already booked, and PFAS still has no final price tag.
That is why Haifa should be read not as a one-off disturbance in the 2025 report, but as a multi-year transition cloud. The accounting front has eased. The operating, legal, and regulatory fronts have not.
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