Compressed air holds a lot of water vapour. Once that vapour becomes cooled into a liquid (condensate) it’s a dirty, oily mixture that can’t simply be poured down the drain. Its disposal is regulated under the 1991 Water Resources Act.
Since the condensate is approximately 95% water and 5% oil, condensate management systems (oil/water separators) should be used to reduce or eliminate the amount of oil in the condensate. Once the water has been through the separator it should then be piped into the foul sewage system.