Vapour Intrusion and Soil Gas: When Does Sparse Monitoring Become an R&D Activity?

24 August 2026 — this article describes the current rules. The 2026-27 Federal Budget announced proposed changes to the R&DTI; the ATO states the measure is not yet law, and industry.gov.au states the changes would apply to income years starting on or after 1 July 2028 if enacted.

The quantity that matters in a vapour intrusion assessment is the concentration of a volatile compound in the air inside a building. The quantity you usually have is a soil gas concentration from a handful of wells in the ground outside it, measured on a particular morning. Everything between those two numbers — partitioning, diffusion through the vadose zone, advection through the slab, dilution by the building's air exchange — is inference, and the NSW EPA practice note is explicit that each step further away from the receptor introduces more uncertainty (epa.nsw.gov.au).

That inferential gap is not, by itself, an unknown outcome for R&D Tax Incentive purposes. It is the ordinary condition of the discipline, and the national framework already supplies a conservative way to close it. This article is about where the framework runs out and a genuine experiment can begin.

The unknown here is also not the statistical sparse-data problem — the kind where the model is agreed and more observations tighten the estimate. It is a physical one: a contaminant fate-and-transport question about a compartment you cannot instrument, where more wells in the same medium may not resolve it at all.

What the Accepted Framework Already Answers

The ASC NEPM supplies screening criteria for exactly this pathway, and the derivation is documented in enough detail that a practitioner can see what has been assumed on their behalf.

For volatile organic chlorinated compounds, the interim soil gas health investigation levels in Schedule B1 are stated to be based on "a conservative indoor air to soil gas attenuation factor of 0.01" (nepc.gov.au, Schedule B1). For petroleum hydrocarbons, the health screening levels adopt the Johnson and Ettinger model as the primary method, applied with a finite source and without biodegradation, and the same Schedule records the building envelope those numbers assume: slab-on-ground construction, a specified slab fracture area, and an air exchange rate set at 0.6 building volumes per hour. Soils are binned into sand, silt and clay under the US soil texture classification, and criteria are tabulated by depth band and land use. Where oxygen exceeds 5% in soil at 1 m depth immediately adjacent to the slab, biodegradation multipliers of 10 and 100 may be applied to the >2–<4 m and >4 m values respectively, limited to a maximum slab width of 15 m with oxygen access on both sides.

Read that as a research instrument rather than a compliance table and it says something precise: the framework has already fixed the source term, the transport medium, the building and the failure mode, and chosen conservative values for each. Selecting the right table, measuring the soil texture and depth, comparing the numbers and reporting the comparison is skilled professional work whose outcome is determinable in advance from the framework itself. What follows from the comparison is for the accredited professionals engaged to answer it.

Schedule B1 is equally clear about where its petroleum hydrocarbon screening levels stop applying: where contaminated groundwater sits less than 2 m below the ground or basement surface or is entering a basement, where a measurable separated free-phase layer is present in a borehole or monitoring well, or where hydrocarbon odour in buildings or utilities indicates a preferential migration pathway. In those circumstances "a site-specific approach will need to be developed which is likely to involve direct intervention". A site-specific approach still is not automatically experimental — most of the time the practitioner reaches for a documented higher-tier method under Schedule B4 and applies it. But it is the region where an experiment becomes possible.

The Statutory Tests, in Short

Core R&D activities are experimental activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that is based on principles of established science and proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions; and that are conducted for the purpose of generating new knowledge, including new knowledge in the form of new or improved materials, products, devices, processes or services (s 355-25(1), ITAA 1997). Supporting R&D activities are activities directly related to core R&D activities; and where an activity is one referred to in s 355-25(2), produces goods or services, or is directly related to producing goods or services, s 355-30(2) adds a further bar — it is a supporting R&D activity only if undertaken for the dominant purpose of supporting core R&D activities. Both definitions are set out at length on business.gov.au, and each limb is tested against the particular activity, never against the project or the firm.

Two features of contaminated land work bear on the first test. Advective-diffusive transport in porous media, three-phase partitioning and the pressure-driven entry of soil gas through slab penetrations are settled physics — which is what supplies the established-science basis a progression here can be built on, though whether the limb is satisfied turns on how the particular progression is designed, conducted and evaluated, not on the maturity of the discipline. That same maturity is why routine assessment sits uncomfortably with the outcome limb: the framework tells you in advance, conservatively, what the screening comparison will yield.

Where the Inference Question Can Become the Experiment

Three conditions recur in which the answer is genuinely not available from current knowledge:

The distinguishing feature in each case is that the target is fixed before the work, the measure is specified, and a negative result is a real and reportable possibility.

A Worked Hypothetical: Can Sub-Slab Vapour Be Predicted from Exterior Wells?

Hypothetical and illustrative. The figures are invented to show the shape of an experiment; nothing here indicates that any activity is eligible, and nothing here is a statement about any real site or method.

An Adelaide environmental engineering firm is engaged on a former metal fabrication site in the inner west. TCE and PCE are present in shallow groundwater at ~4.5 m below ground, beneath ~2 m of imported sandy fill over clay. Twenty-two slab-on-ground buildings sit over the plume. Access for sub-slab ports is granted at six of them; the rest cannot be entered without agreements the owners have declined.

What the Records Have to Carry

A defensible candidate boundary for this hypothetical would begin at the dated hypothesis and acceptance criteria of 11 March and end at the single read of the sealed events. Each item outside it — drilling and installing the wells and ports, the NATA-accredited laboratory analysis, the quarterly regulatory rounds and their comparison against the NEPM criteria, the report to the regulator, the site audit, and the human health risk assessment that is a matter for the accredited professionals engaged to do it — would need its own supporting-activity analysis on its own facts. Describing work this way is not classifying it: whether any activity meets s 355-25 or s 355-30 is determined on its own facts, and the company self-assesses.

The awkward cases are the dual-purpose ones. A single sample can populate the paired dataset and discharge a quarterly reporting obligation; s 355-30(2)(a) reaches it through paragraph (f), and s 355-30(2)(c) reaches fieldwork directly related to producing the consultant's deliverable. Only contemporaneous records separate them afterwards: the dated hypothesis and acceptance tolerance; the search establishing what was and was not already known; the pre-collection holdout draw and the seal on those results; the schedule marking which events were experimental and which regulatory; and the failed trials, written up with what they ruled out. Work of this kind is naturally registered against the pollution and contamination research field.

Where an RSP Fits

business.gov.au describes Research Service Providers as scientific or technical service providers, registered in specific fields, that a company can engage to provide R&D services within those registered fields. Eligible R&D expenditure incurred to a registered research service provider may be treated differently where the usual $20,000 R&D expenditure threshold is not met, subject to the requirements in s 355-100(2) and the underlying activities satisfying the R&D eligibility tests. In mechanism, where a company's total notional deductions are under $20,000, s 355-100(2) substitutes a different base, the first kind of expenditure in it being expenditure incurred to a registered research service provider that is not an associate of the R&D entity, for services within a research field for which the provider is registered. See claiming R&D under $20,000 and what an RSP is; offset rates are covered in refundable vs non-refundable offset.

Frequently Asked Questions

Q: Is soil gas monitoring an eligible R&D activity in Australia?
A: Not by virtue of being soil gas monitoring. Sampling wells and screening the results against the NEPM criteria is generally unlikely to be a core R&D activity on those facts, subject to the activity's own facts and the statutory tests, and s 355-25(2)(f) expressly reaches routine testing and analysis of soils and atmospheres. A core R&D activity may exist where it could not be determined in advance whether any inference method reaches a stated predictive tolerance at a particular site, and could only be determined by a systematic progression of work based on principles of established science, conducted to generate new knowledge. You self-assess.

Q: Does using the Johnson and Ettinger model make site assessment R&D?
A: Not by itself. The model is the accepted method underpinning the NEPM health screening levels, and applying it with documented inputs produces an outcome whose direction is determinable in advance. The position can differ where the question is whether the model's assumptions can be replaced by a site-specific formulation that meets an accuracy condition fixed before the work — provided a negative result was a real possibility.

Q: Are attenuation factors a technical uncertainty for R&DTI purposes?
A: The existence of scatter in published attenuation factors is a known feature of the field, not an unknown outcome. What can be unknown is whether a specific, measurable quantity — for example the predictive error of a stated method against paired sub-slab measurements at one site — falls inside a tolerance set in advance. The measure and the threshold are what make it a question rather than an observation.

Q: Is the drilling and well installation core or supporting R&D?
A: Fieldwork of that kind is normally considered against the supporting-activity provision rather than the core test. It must be directly related to a core R&D activity; and where an activity is of a kind referred to in s 355-25(2), produces goods or services, or is directly related to producing goods or services, it is a supporting R&D activity only where undertaken for the dominant purpose of supporting core R&D activities. A monitoring round that also discharges a reporting obligation may require consideration of the dominant-purpose test where s 355-30(2) applies.

Sources & Further Reading

• nepc.gov.au — National Environment Protection (Assessment of Site Contamination) Measure

• nepc.gov.au — Schedule B1: Investigation levels for soil and groundwater

• nepc.gov.au — Schedule B2: Site characterisation

• nepc.gov.au — Schedule B4: Site-specific health risk assessments

• legislation.gov.au — National Environment Protection (Assessment of Site Contamination) Measure 1999

• epa.nsw.gov.au — Vapour Intrusion: Technical Practice Note

• epa.sa.gov.au — Site contamination audit system and auditor accreditation

• business.gov.au — Check if you are eligible for the R&DTI

• business.gov.au — Conducting supporting R&D activities

• business.gov.au — Get help from a research service provider

• ATO — Tax Reform: better targeting the R&D Tax Incentive

• industry.gov.au — Research and Development Tax Incentive

• legislation.gov.au — Income Tax Assessment Act 1997 — Div 355, incl. ss 355-25, 355-30 and 355-100

• Related: pollution and contamination research field · what does not qualify · what an RSP is · claiming R&D under $20,000 · refundable vs non-refundable offset · Insights