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Economic Impact Analysis for the Proposed
National Emission Standards for Hazardous Air
Pollutants: Chemical Manufacturing Area
Sources
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EPA-452/P-25-001
January 2025
Economic Impact Analysis for the Proposed National Emission Standards for Hazardous Air
Pollutants: Chemical Manufacturing Area Sources
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Health and Environmental Impacts Division
Research Triangle Park, NC
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CONTACT INFORMATION
This document was prepared by staff from the Office of Air and Radiation at the U.S.
Environmental Protection Agency. Questions related to this document should be addressed to the
Air Economics Group in the Office of Air Quality Planning and Standards, Research Triangle
Park, North Carolina 27711 (email: OAQPSeconomics@epa.gov).
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TABLE OF CONTENTS
Table of Contents v
List of Tables vi
1 Introduction 1-1
1.1 Background 1-1
1.2 Economic Basis for this Rulemaking 1-2
1.3 Cost Impacts 1-3
1.4 Impacts on Small Entities 1-5
1.5 Emissions Impacts and Benefits 1-5
1.6 Summary of Results 1-7
2 Regulatory Background 2-1
2.1 Regulatory History 2-1
2.2 Proposed Requirements 2-3
3 Engineering Cost Analysis 3-1
3.1 Introduction 3-1
3.2 Affected Facilities 3-2
3.3 Engineering Costs 3-3
3.4 Present Value of Costs 3-5
3.5 Uncertainties 3-7
4 Emissions Impacts and Benefits Analysis 4-1
4.1 Introduction 4-1
4.2 Health Effects from Exposure to HAP Reduced by this Rule 4-2
4.2.1 Summary of Risk Analysis for CMAS Category 4-4
4.3 Secondary Emissions Impacts 4-5
4.4 Climate Impact Valuation 4-6
4.5 PM2.5 and Ozone-related Health Impacts 4-11
4.6 Uncertainties 4-12
5 Small Entity Impact Analysis 5-1
5.1 Introduction 5-1
5.2 Small Entity Screening Analysis 5-1
5.2.1 Description and Estimate of Affected Small Entities 5-1
5.2.2 Compliance Cost Impact Estimates 5-3
5.2.3 Uncertainties 5-7
5.3 Economic and Employment Impacts 5-7
6 Net Benefits 6-1
6.1 Uncertainties 6-2
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LIST OF TABLES
Table 1-1. Estimated Costs and Emissions Impacts from 2027 to 2041 (Millions 2022$) 1-6
Table 1-2. Present Value of GHG Emissions Impacts from 2027 to 2041 (millions 2022$) 1-7
Table 1-3. Summary of Benefits, Costs, and Net Benefits for the Proposed CMAS Amendments from 2027 to 2041
(Millions 2022$) 1-8
Table 3-1. Engineering Cost Estimates by Requirement or Cost Component (2022$) 3-4
Table 3-2. Engineering Cost Summary (millions 2022$) 3-5
Table 3-3. Present Value of Costs and Undiscounted Costs of Proposed Rule (millions 2022$) 3-6
Table 4-1. Secondary Emissions Impacts 4-5
Table 4-2. Social Cost per Metric Ton of CO2, CH4, and N20 (2022$) 4-8
Table 4-3. Undiscounted Values of CO2, CH4, and N20 Emissions Impacts (millions of 2022$) 4-9
Table 4-4. Present Value of Emissions Impacts for CO2, CH4, and N20 Discounted to 2027 (millions of 2022$) 4-9
Table 4-5. Undiscounted Values of GHG Emissions Impacts (millions of 2022$) 4-10
Table 4-6. Present Value of GHG Emissions Impacts Discounted to 2027 (millions of 2022$) 4-11
Table 5-1. Affected NAICS Codes 5-3
Table 5-2. Number of Percent of Entities and Facilities by Entity Size 5-3
Table 5-3. Average Costs per Entity and Cost-to-Sales Ratios by Entity Size 5-5
Table 5-4. Total Costs of Proposed Requirements by Entity Size (millions of 2022$) 5-5
Table 5-5. Small Entity Screening Summary 5-6
Table 6-1. Summary of Benefits, Costs, and Net Benefits for the Proposed CMAS Amendments from 2027 to 2041
(Millions 2022$) 6-1
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1 INTRODUCTION
1.1 Background
The U.S. Environmental Protection Agency (EPA) is proposing amendments to the
National Emission Standards for Hazardous Air Pollutants (NESHAP) for Chemical
Manufacturing Area Sources (40 CFR Part 63, Subpart WWW). The Chemical
Manufacturing Area Sources (CMAS) categories are comprised of area sources in nine source
categories in the chemical manufacturing sector: Agricultural Chemicals and Pesticides
Manufacturing, Cyclic Crude and Intermediate Production, Industrial Inorganic Chemical
Manufacturing, Industrial Organic Chemical Manufacturing, Inorganic Pigments Manufacturing,
Miscellaneous Organic Chemical Manufacturing, Plastic Materials and Resins Manufacturing,
Pharmaceutical Production, and Synthetic Rubber Manufacturing. The standards and associated
requirements for the nine area source categories are combined in one subpart. Facilities currently
subject to the CMAS NESHAP emit one or more of 15 urban air toxics.1 This document presents
the economic impact analysis (EIA) for this proposed rule.
Facilities in the CMAS categories manufacture a wide variety of specialty chemicals and
products. The CMAS NESHAP was promulgated in 2009 and contained requirements for the 15
urban hazardous air pollutants (HAP) for: process vents, storage tanks, wastewater systems, heat
exchange systems, transfer operations, and equipment leaks. This rule proposes to list an
additional area source category alongside the nine currently regulated by the CMAS NESHAP,
Chemical Manufacturing with Ethylene Oxide, and add ethylene oxide (Eto) to the list of
pollutants regulated by the CMAS NESHAP. eto is emitted by area source chemical
manufacturers and carries higher risks than previously understood at the time the CMAS
NESHAP was originally promulgated in 2009. The EPA identified approximately 280 area
source facilities that may be impacted by the proposed revisions to the CMAS NESHAP, 33 of
which emit EtOH and may be affected by the proposed EtOH standards. Henceforth the 280
facilities are referred to as CMAS facilities.
1 The 15 urban HAP regulated by the CMAS NESHAP are: 1,3-butadiene, 1,3-dichloropropene, acetaldehyde,
chloroform, ethylene dichloride, hexachlorobenzene, methylene chloride, quinoline, hydrazine, arsenic
compounds, cadmium compounds, chromium compounds, lead compounds, manganese compounds, and nickel
compounds.
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To meet the requirements of Clean Air Act (CAA) section 112(d)(6), the EPA must
review, and revise standards promulgated under CAA section 112 no less often than every eight
years. This review takes into account developments in practices, processes, and control
technologies and determines which may be appropriate for the considered source category or
source categories. This process is known as a 'technology review.'
This proposed rule adds new EtO-specific requirements to the CMAS NESHAP pursuant
to CAA section 112(d)(5) for equipment leaks, heat exchange systems, process vents, storage
tanks, pressure relief devices (PRDs), flares, and wastewater in EtO service. The EPA is also
proposing a fenceline monitoring requirement for EtO. As part of the technology review, the
EPA is proposing to add new leak detection and repair (LDAR) requirements to the CMAS
NESHAP for equipment leaks and for heat exchange systems in organic HAP service. In
addition, the EPA is proposing to add new generally available control technology (GACT)
standards pursuant to CAA section 112(d)(5) for pressure vessels and PRDs in organic HAP
service. The EPA is also proposing to require performance testing once every five years to
demonstrate compliance with emission limits, in addition to changes to the recordkeeping and
reporting requirements to require the use of electronic reporting of certain reports. More
information on these proposed requirements can be found in the preamble for this proposal.
1.2 Economic Basis for this Rulemaking
Regulation can be used to address market failures, which otherwise lead to a suboptimal
allocation of resources within a free market. Many environmental problems are classic examples
of "negative externalities", which arise when private entities do not internalize the full
opportunity cost of their production, and some of this opportunity cost is borne by members of
society who are neither consumers nor producers of the goods produced {i.e., they are
"external"). For example, the smoke from a factory may adversely affect the health of nearby
residents, and local soil quality and visibility. Public goods such as air quality are valued by
individuals but suffer from a lack of property rights, so the value of good air quality tends to be
unpriced in markets that generate air pollution. In such cases, markets fail to allocate resources
efficiently and regulatory intervention is needed to address the problem.
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While recognizing that the socially optimal level of pollution is often not zero, the
emissions from CMAS facilities impose costs on society {i.e., adverse human health and
environmental impacts) that may not be reflected in the equilibrium market prices for the
chemicals they produce. If emissions from CMAS facilities increase risks to human health and
the environment, some social costs will be borne not by affected firms and their customers but
rather imposed on communities near the facilities and other individuals exposed to their
emissions. Consequently, absent a regulation limiting emissions from CMAS facilities and
causing firms to internalize the external costs of their operations, emissions will likely exceed the
socially optimal level.
1.3 Cost Impacts
The impacts of regulatory actions are evaluated relative to a baseline that represents the
world without the regulatory action. Throughout this document, the EPA focuses the analysis on
the requirements that result in quantifiable compliance costs or emissions changes compared to
the baseline.
The cost impacts of this rule were estimated over a 15-year timeframe from 2027 to 2041.
The EPA chose a 15-year analytical time horizon to be consistent with the equipment lifetime of
some of the capital components that would be required to comply with the rule (lifetimes are not
consistent across all capital equipment). The 15-year timeframe was also chosen to capture
lasting regulatory impacts while avoiding uncertainties that would be introduced if a longer
timeframe were used. The EPA assumes that impacts begin in 2027, the year that compliance is
expected to be required for the proposed EtO standards {i.e., two years after the presumed
publication of the final rule). We note that affected sources have three years after publication to
comply with the proposed amendments to the non-EtO standards.
The EPA identified approximately 280 area source facilities currently operating in the
U.S. that may be impacted by the proposed revisions to the CMAS NESHAP, 33 of which emit
EtO and may be affected by the proposed standards for EtO. All cost impacts were estimated in
association with these 280 existing facilities, although new sources could become impacted by
these proposed requirements in the future. Although the action contains requirements for new
sources, the EPA is not aware of any new sources being constructed now or planned in the
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future, and, consequently, did not estimate any cost or other impacts for new sources. Hence, the
impacts estimated in this EIA solely reflect those for the 280 existing facilities.
The EPA estimates that the proposed requirements will allow owners of affected CM AS
facilities to recover some sellable products. The EPA provides estimates of the costs including
and excluding the value of recovered product. The total annual costs (annualized capital costs
plus annual operating, maintenance, and testing costs) of the proposed rule are estimated to be
about $38 million without product recovery and about $36.4 million including product recovery
in 2022 dollars. Hence, product recovery accounts for about $1.6 million in annual cost savings,
or about four percent of the total annual costs without product recovery.
The present value (PV) of the estimated costs of this proposed rule discounted at a two
percent rate over the 15-year period from 2027 to 2041, excluding the value of product recovery,
is $495 million in 2022 dollars. The equivalent annualized value2 (EAV) of the costs excluding
product recovery is $38.5 million at a two percent discount rate. The PV and EAV of the costs
including product recovery are estimated to be $474 million and $37 million, respectively, using
a two percent discount rate. Most of the estimated costs associated with this proposed rule are
due to the new requirements for CMAS facilities that emit EtO.
The amendments to the CMAS NESHAP constitute a significant regulatory action.
However, the proposal is not (3)(f)(l) significant, under Executive Order (EO) 14094 (which
amended EO 12866), because it has an estimated annual effect on the economy that is less than
$200 million and is not expected to adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public health or safety, or state,
local, or tribal governments or communities.3
2 The EAV is the value of the costs at time / if the stream of costs were equally distributed across periods in the time
horizon. It is the amount that, if incurred each year over the time horizon, would generate the same present value
as the actual (i.e., time-varying) stream of expenditures. In other words, the sum of EAVs across years in present
value terms yields the total present value of the costs.
3 EO 14094 1(f)(1) specifies that impacts of $200 million or greater (costs, or benefits, in any single year) would
indicate a rule is significant. EO 14094 can be found at:
https://www.federalregister.gov/documents/2023/04/! 1/2023-07760/modernizing-regulatory-review.
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1.4 Impacts on Small Entities
Based on the analysis of cost impacts on small entities, the EPA does not expect this
proposed rule to have a Significant Impact on a Substantial Number of Small Entities
(SISNOSE) under the Regulatory Flexibility Act as amended by the Small Business Regulatory
Enforcement Fairness Act (SBREFA).
This proposed rule affects 58 small entities out of a total of 187 businesses that own
affected CMAS facilities. Out of the 280 facilities expected to incur costs to comply with the
proposed requirements, 64 facilities, or about 23 percent of facilities, are owned by the 58
ultimate parent companies that are classified as small entities based on the business size
standards defined by the U.S. Small Business Administration (SBA).4 The EPA estimated total
annual costs per entity as a share of each entity's annual revenues to assess potential impacts on
small entities. There are five small entities with an estimated cost-to-sales ratio of one percent or
greater, which accounts for about nine percent of all affected small entities. There is one small
entity with an estimated cost-to-sales ratio of three percent or greater, which accounts for about
two percent of small entities. Thus, four small entities have estimated cost-to-sales ratios
between one and three percent. Considering the low number and percentage of small entities
with cost-to-sales ratios above one and three percent, the EPA does not anticipate that this action
would result in a SISNOSE.
1.5 Emissions Impacts and Benefits
The EPA estimates that the proposed amendments will reduce HAP emissions (excluding
EtO) from affected CMAS sources by approximately 158 tons per year (tpy) and reduce EtO
emissions by approximately 4.6 tpy. Table 1-1 contains a summary of the estimated cost impacts
and HAP emissions reductions for this proposed rule.
4 U.S. Small Business Administration. (2023). Table of Small Business Size Standards. Found at
https://www.sba.gov/document/support-table-size-standards.
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Table 1-1. Estimated Costs and Emissions Impacts from 2027 to 2041 (Millions 2022$)
Total Capital Costs
$37.6
Total Annual Costs w/o product recovery
$38.0
Total Annual Costs w/ product recovery
$36.4
Present Value of Costs (2%) w/o product recovery
$495
Present Value of Costs (2%) w/ product recovery
$474
Equivalent Annualized Value (2%) w/o product recovery
$38.5
Equivalent Annualized Value (2%) w/ product recovery
$36.9
EtO Emissions Reductions (tpy)
4.6
HAP Emissions Reductions (tpy)
158
The total annual costs are the sum of the annualized capital costs and other annual costs. The capital costs were
annualized over the lifetime of the equipment at an 8.5 percent interest rate.
This EIA includes qualitative discussion of the human health risks associated with
exposure to EtO and other HAP emissions. However, the EPA did not monetize the benefits
from the estimated HAP emission reductions associated with this proposed action. The EPA is
unable to monetize benefits associated with HAP risk reductions for this rulemaking. However,
the EPA expects that the HAP emission reductions will lower the risk of adverse health effects,
including cancer, for individuals in communities near CMAS facilities. Monetization of the
benefits of reductions in HAP-related cancer incidences would require several important inputs,
including central estimates of cancer risks, estimates of exposure to the urban HAP, and
estimates of the value of avoided cases of cancer (fatal and non-fatal, and specific to the type of
cancer).
The proposed requirements are also associated with secondary changes in emissions of
several non-HAP pollutants. The EPA estimates that the proposed requirements would reduce
volatile organic compound (VOC) emissions by about 1,560 tpy and methane (CH4) emissions
by about 250 tpy due to improved flaring efficiency. Due to supplemental fuel or additional
electricity needed to comply with the proposed standards, the EPA estimates that emissions of
several pollutants would increase, including an additional 36 tpy of carbon monoxide (CO),
57,000 tpy of carbon dioxide (CO2), 43 tpy of nitrogen oxides (NOx) (including 0.97 tpy of
nitrous oxide (N2O)), 3.3 tpy of fine particulate matter (PM2.5), and 0.26 tpy of sulfur dioxide
(S02).
This EIA provides monetized estimates of the impacts associated with the methane
emissions reductions and the net increases in CO2 and N2O emissions using the EPA's social
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cost of greenhouse gas (SC-GHG) estimates.5 The EPA was not able to monetize the health and
environmental impacts associated with the estimated changes in criteria air pollutant emissions
for this proposed rule, which include increased PM2.5 and PM2.5 precursor emissions and changes
in VOC and NOx emissions, which impact the formation of ground-level ozone.
Table 1-2 shows the PV and EAV of the estimated benefits of the GHG emissions
changes from 2027 to 2041 discounted to 2027 at rates of 1.5 percent, 2 percent, and 2.5 percent.
For purposes of this EIA, we will focus on the SC-GHG using the two percent discount rate. The
estimated climate benefits are negative on net. The PV of the climate benefits for the 15-year
period from 2027 to 2041 is estimated to be negative $195 million in 2022 dollars discounted at
a two percent rate, and the EAV is estimated to be negative $15 million.
Table 1-2. Present Value of GHG Emissions Impacts from 2027 to 2041 (millions 2022$)
Discount Rate
2.5%
2.0%
1.5%
Present Value in 2027
(117.7)
(194.5)
(335.2)
Equivalent Annualized
Value
(9.5)
(15.1)
(25.1)
Monetized climate benefits are based on changes in methane, N20, and CO2 emissions and are calculated using the
respective estimates of the SC-GHG for the three pollutants using a 1.5 percent, 2 percent, and 2.5 percent near-term
Ramsey discount rate.
1.6 Summary of Results
Table 1-3 summarizes the costs, benefits, and net benefits estimated for this proposed
rule. The monetized net benefits are negative as they include the estimated costs and the impacts
of the secondary GHG impacts, which are negative (i.e., climate damages). The EPA was unable
to monetize the benefits associated with the estimated HAP reductions for this proposed rule,
however these reductions are expected to reduce adverse health effects, including cancer, and
would presumably increase the net benefits of this rule if monetized. The PV of the monetized
net benefits of the proposed amendments to the CMAS NESHAP is estimated to be about
negative $670 million for the 15-year period from 2027 to 2041 discounted at a two percent rate
5 U.S. EPA. (2024). Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific
Advances. Found at https://www.epa.gov/environmental-economics/scghg.
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in 2022 dollars. The EAV of the net benefits is estimated to be negative $52 million using a two
percent discount rate.
Table 1-3. Summary of Benefits, Costs, and Net Benefits for the Proposed CMAS
Amendments from 2027 to 2041 (Millions 2022$)
2% Discount Rate
PV EAV
158 tpy of reduced non-EtO HAP and
4.6 tpy of reduced EtO
$474 $37
$495 $39
($21) ($1.6)
($195) ($15)
Reduced adverse health effects of reduced HAP exposure
Reduced VOC emissions of 1,560 tpy
Increased emissions of SO2 (0.26 tpy), NOx (43 tpy), PM2.5
(3 tpy), and CO (36 tpy)
Health and environmental impacts associated with effects
on PM2 5 and ozone
($670) ($52)
Monetized climate benefits are based on changes in methane, N20, and CO2 emissions and are calculated using the
respective estimates of the SC-GHG for the three pollutants using a 2 percent near-term Ramsey discount rate.
Values rounded to three significant figures. While we expect these emissions reductions to have beneficial effects on
air quality and public health for populations exposed to emissions from CMAS facilities, we have determined that
quantification of those benefits cannot be accomplished for this proposed rule. This is not to imply that there are no
benefits of the amendments. Rather, it is a reflection of the difficulties in modeling the health effects and monetizing
the benefits of reducing HAP and EtO emissions from this source category with the data currently available. EPA is
not including monetized estimates of the criteria pollutant emissions impacts for this proposal in the net monetized
impacts in this EIA.
The remainder of this document is organized as follows. Chapter 2 provides regulatory
history for the source category and describes the proposed requirements and new standards.
Chapter 3 presents the cost analysis for the proposed rule. Chapter 4 presents the estimated
emissions impacts and the benefits. Chapter 5 contains the small entity analysis. Chapter 6
concludes with a presentation of net benefits.
Benefits
Net Compliance Costs
Compliance Costs
Value of Product Recovery
Monetized Climate Benefits
Non-Monetized Benefits *
Net Benefits
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2 REGULATORY BACKGROUND
2.1 Regulatory History
This section provides the regulatory history for the CMAS category and the baseline
regulatory requirements for CMAS sources. CMAS facilities are primarily synthetic area source
chemical manufacturing facilities that produce a wide variety of specialty chemicals and
products.
Collectively, CAA sections 112(c)(3), (d)(5), and (k)(3) are the basis of the Area Source
Program under the Urban Air Toxics Strategy, which provides the framework for regulation of
area sources under CAA section 112. Section 112(k)(3)(B) of the CAA requires the EPA to
identify at least 30 HAP that pose the greatest potential health threat in urban areas with a
primary goal of achieving a 75 percent reduction in cancer incidence attributable to HAP emitted
from stationary sources. The HAP identified by the EPA (see the Integrated Urban Air Toxics
Strategy (64 FR 38706, 38715, July 19, 1999)) are commonly referred to as the "30 urban HAP."
CAA section 112(c)(3), in turn, requires the EPA to list sufficient categories or subcategories of
area sources to ensure that area sources representing 90 percent of the emissions of the 30 urban
HAP are subject to regulation.
In October 2009, the EPA promulgated the final NESHAP for area sources in the
chemical manufacturing industry. The CMAS NESHAP affected area sources in nine source
categories, including: Agricultural Chemicals and Pesticides Manufacturing, Cyclic Crude and
Intermediate Production, Industrial Inorganic Chemical Manufacturing, Industrial Organic
Chemical Manufacturing, Inorganic Pigments Manufacturing, Miscellaneous Organic Chemical
Manufacturing, Plastic Materials and Resins Manufacturing, Pharmaceutical Production, and
Synthetic Rubber Manufacturing. The rule established GACT standards pursuant to CAA section
112(d)(5). Determining what constitutes GACT involves considering the control technologies
and management practices that are generally available to and appropriate for area sources in the
category. The EPA considers technical capabilities of affected sources, costs, and economic
impacts in establishing and amending GACT standards.
The 2009 rule established GACT emission standards in the form of management
practices for each chemical manufacturing process unit as well as emission limits for certain
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subcategories of process vents and storage tanks. The rule also established management practices
and other emission reduction requirements for subcategories of wastewater systems, heat
exchange systems, transfer operations, and equipment leaks.
In terms of management practices, the 2009 rule required quarterly inspections for
equipment leaks, required owners and operators to keep lids on process vessels and to keep them
closed whenever they were in organic HAP or metal HAP service, required the use of certain
emission control techniques when transferring liquid to tank trucks and railcars, and required the
development and operation of an inspection plan to identify leaks from small heat exchange
systems. In addition to these management practices, the 2009 rule included standards for certain
process vents, storage tanks, heat exchange systems, and wastewater systems. Specifically, the
rule required:
• Emission reductions of total organic HAP greater than or equal to 95 percent (85 percent
during periods of startup and shutdown), to a concentration of 20 parts per million by
volume (ppmv), or by routing emissions via closed vent system to a flare for certain
continuous process vents;
• Emission reductions of total organic HAP greater than or equal to 85 percent, to a
concentration of 20 ppmv, or by routing emissions via closed vent system to a flare for
certain existing batch process vents (90 percent for new sources);
• Emission reductions of total organic HAP greater than or equal to 95 percent for certain
vents emitting metal toxic air pollutants;
• Emission reductions of certain halogenated vent streams by greater than or equal to 95
percent, to less than or equal to 0.45 kilograms per hour, or to a concentration of less
than or equal to 20 ppmv;
• Improved controls for storage tanks varying in stringency depending on capacity;
• Quarterly monitoring via water sampling for heat exchange systems with flow rates
greater than 8,000 gallons per minute;
• Separation of the organic and water phases or hard piping of the wastewater stream to
either onsite treatment or a transfer point for offsite treatment for certain wastewater
streams.
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CMAS facilities were also required to submit one-time notifications of applicability and
compliance status, semiannual compliance reports under certain circumstances, and keep records
to demonstrate compliance with the final rule.
In December of 2012, the EPA finalized a reconsideration of the CMAS NESHAP to
address minor technical corrections; to remove startup, shutdown, and malfunction exemptions;
and to add affirmative defense provisions.
2.2 Proposed Requirements
The amendments being proposed in this rule are the result of the statutory authority
comes from CAA section 112(d)(6). Technology reviews assess developments in practices,
processes, or control technologies and revise the standards as necessary, considering factors like
cost and cost-effectiveness. The EPA is required to conduct a technology review every eight
years after a NESHAP is promulgated. In addition to the technology review, this rule is
proposing to list a new source category, Chemical Manufacturing with Ethylene Oxide, pursuant
to CAA section 112(c)(5) and is proposing new GACT standards for EtO pursuant to CAA
section 112(d)(5). Refer to the preamble of this action, available in the docket for this
rulemaking, for additional details.
For categories of area sources subject to GACT standards, CAA sections 112(d)(5) and
(f)(5) provide that the EPA is not required to conduct a residual risk review. However, in light of
the revisions to the cancer risk value for EtO,6 the EPA performed a risk assessment to determine
if a category of area source chemical manufacturers emitting EtO is adversely affecting human
health or the environment, pursuant to CAA section 112(c)(3) as referenced by CAA section
112(c)(5). The risk assessment, available in the docket for this rulemaking, estimated lifetime
cancer risks and noncancer effects from both chronic and acute inhalation exposures. Based on
the risk assessment, the EPA determined it was appropriate to propose a new source category for
regulation as part of the CMAS NESHAP and to set standards for EtO emissions from CMAS
sources.
6 EPA updated the Integrated Risk Information System (IRIS) value associated with EtO in 2016 and the unit risk
estimate for EtO is nearly 60 times higher than it was prior to the 2016 IRIS update. An update in risk value of
this magnitude is not typical for regulated HAPs. Additional information on the IRIS program is available here:
https://www.epa.gov/iris.
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In this proposed rule, the EPA is proposing new standards and management practices to
the CMAS NESHAP for facilities that emit EtO, including requirements for:
• Heat exchange systems in EtO service, namely quarterly monitoring requirements
using the Modified El Paso Method, a requirement to repair leaks more quickly,
and removal of delay of repair;
• Equipment in EtO service, including monthly instrument monitoring requirements
for valves, connectors, and pumps;
• Fenceline monitoring for EtO emissions;
• Process vents and storage tanks in EtO service, including new performance
standards and testing requirements;
o For process vents in EtO service, the EPA is proposing to require owners
and operators to route emissions via closed vent system to a flare, reduce
EtO emissions by greater than or equal to 99.9 percent, to a concentration
less than 1 ppmv for each process vent, or to less than 5 pounds per year
for all combined process vents.
o For storage tanks containing greater than or equal to 0.1 percent EtO by
weight, the EPA is proposing to require owners and operators to route
emissions via closed vent system to a flare, reduce EtO emissions by
greater than or equal to 99.9 percent, or to a concentration less than 1
ppmv for each storage tank.
• Flares in EtO service, including monitoring to ensure the flares are achieving
control efficiencies greater than or equal to 98 percent.
• Wastewater in EtO service, proposing that any wastewater stream containing an
annual average concentration of EtO greater than or equal to 1 ppmw to be treated
and reduce EtO in the wastewater to less than 1 ppmw.
• Pressure relief devices in EtO service, proposing that PRDs be equipped with
preventative measures and monitoring equipment and specifying that any EtO
release to atmosphere from a PRD is a deviation. We expect all affected facilities
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are already monitoring PRDs in EtO service, so there are no costs estimated for
this practice.
• Transfer operations, proposing that owners and operators transferring liquids
containing EtO to tank trucks or railcars comply with the same management
practices that are already required for CMAS operations for non-EtO HAP. We
expect all affected facilities are already complying with this requirement, so there
are no costs estimated for this practice.
This proposed rule also updates several of the non-EtO standards in the CMAS NESHAP,
including for:
• Pressure vessels, which will have updated leak detection and repair requirements.
• Pressure relief devices, proposing to require PRDs to be equipped with preventive
measures and monitoring equipment and specify that PRDs may not release to the
atmosphere more than twice over a rolling three year period.
• Equipment leaks, proposing to require instrument monitoring of valves, pumps,
and connectors via EPA Method 21.
• Heat exchange systems with flow rates greater than 8,000 gallons per minute,
proposing quarterly monitoring via the Modified El Paso Method.
The EPA is also proposing to require performance testing of non-flare control devices
once every five years to demonstrate compliance with the emissions limits and amending the
recordkeeping and reporting requirements to require the use of electronic reporting of certain
reports. The EPA is proposing that affected sources must be in compliance with the proposed
EtO requirements within two years of this rule being finalized and must be in compliance with
the non-EtO requirements within three years of this rule being finalized. For fenceline
monitoring, the EPA is proposing that facilities must start collecting data two years after the
effective date of the final rulemaking and must begin root cause analysis and corrective action
upon exceedance of the annual average concentration action level three years after the effective
date of the final rulemaking.
The preamble contains a more thorough discussion of the analyses conducted to
determine the amendments in this proposed rule, including the range of technologies, practices,
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and other requirements considered and the EPA's reasoning for ultimately choosing the
standards being proposed.
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3 ENGINEERING COST ANALYSIS
3.1 Introduction
This section describes the EPA's estimates of the engineering costs associated with this
proposed rule's requirements for affected CMAS operations. This EIA focuses on the
requirements that result in quantifiable compliance cost or emissions changes compared to a
regulatory baseline that represents the status quo without this rule. The EPA assumed each
facility achieved emissions control sufficient to meet the baseline standards and estimated the
emissions reductions and cost of fully complying with the proposed requirements relative to this
baseline. The costs were estimated by multiplying facility and source counts by engineering cost
estimates for the various requirements in the rule.
The technical memoranda in the docket describe the methodology, data, and assumptions
used to estimate the costs (capital and annual costs) and the emission reductions for the proposed
requirements for the CMAS NESHAP (40 CFR Part 63, Subpart VVVVVV). For greater detail
on the methods for estimating the cost and emissions impacts associated with each emissions
process group, see the documents titled Clean Air Act Section 112(d)(5) GACTStandard
Analysis for Equipment Leaks that Emit Ethylene Oxide and Section 112(d)(6) Technology
Review for Equipment Leaks from Chemical Manufacturing Process Units at Area Sources
Subject to the CMAS NESHAP, Clean Air Act Section 112(d)(5) GACT Standard Analysis and
CAA Section 112(d)(6) Technology Review for Fenceline Monitoring for Chemical
Manufacturing Process Units Associated with the Chemical Manufacturing Area Sources
NESHAP, Clean Air Act Section 112(d)(5) GACT Standard Analysis for Flares that Emit
Ethylene Oxide and Section 112(d)(6) Technology Review for Flares Associated with Chemical
Manufacturing Process Units at Area Sources Subject to the CMAS NESHAP, Clean Air Act
Section 112(d)(5) GACT Standard Analysis for Heat Exchange Systems that Emit Ethylene Oxide
and Section 112(d)(6) Technology Review for Heat Exchange Systems Associated with Chemical
Manufacturing Process Units at Area Sources Subject to the CMAS NESHAP, Clean Air Act
Section 112(d)(5) GACT Standard Analysis for Pressure Relief Devices Associated with
Processes Subject to the CMAS NESHAP, Clean Air Act Section 112(d)(5) GACT Standard
Analysis for Process Vents and Storage Tanks that Emit Ethylene Oxide and Section 112(d)(6)
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Technology Review for Process Vents and Storage Tanks Associated with Chemical
Manufacturing Process Units at Area Sources Subject to the CMAS NESHAP, Clean Air Act
Section 112(d)(5) GACT Standard Analysis for Pressure Vessels Associated with Processes
Subject to the CMAS NESHAP, Clean Air Act Section 112(d)(5) GACT Standard Analysis for
Wastewater Streams that Emit Ethylene Oxide and Clean Air Act Section 112(d)(6) Technology
Review for Wastewater Systems Associated with Chemical Manufacturing Process Units at Area
Sources Subject to the CMAS NESHAP, and the preamble, in the docket.
3.2 Affected Facilities
The EPA estimated costs for 280 CMAS facilities, including 33 facilities that emit EtO
and will be affected by the EtO-specific requirements. It was assumed that these 280 facilities
would continue to operate and be affected by the rule throughout the 15-year analytical
timeframe from 2027 to 2041. The EPA did not estimate compliance costs for any new sources
that may become affected by this rule in the future. Although the action contains requirements
for new sources, the EPA is not aware of any new sources being constructed now or planned in
the future, and, consequently, did not estimate any costs for new sources.
It should be noted that the EPA's rule, "Reclassification of Major Sources as Area
Sources Under Section 112 of the Clean Air Act" (MM2A), that was finalized in September
2020, may offer some chemical manufacturing sources that are currently major HAP sources the
opportunity to reclassify as area sources under certain conditions. In addition, the EPA finalized
an amendment to the MM2A rule in 2024 to include a requirement that sources subject to certain
major source NESHAP used to meet the Agency's obligations under CAA section 112(c)(6) for
seven specific persistent and bioaccumulative pollutants must remain subject to those NESHAP
even if those sources reclassify from major source status to area source status.7 The EPA was not
able to estimate how many major sources may reclassify that would then become affected by the
CMAS NESHAP. While MM2A may result in a greater number of CMAS affected sources in
the future, reclassification to area source status is generally expected to reduce costs for those
sources relative to the costs that would be associated with the relevant major source standards, all
7 Federal Register, "Review of Final Rule Reclassification of Major Sources as Area Sources under Section 112 of
the Clean Air Act," 89 FR 73293. September 10, 2024.
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other considerations being equal. Any major source considering reclassification will need to
consider both the MM2A requirements and the requirements of the CMAS NESHAP.
3.3 Engineering Costs
The engineering costs estimated for the different proposed requirements are presented in
Table 3-1. The 'total annual costs' are the sum of the annualized capital costs and other annual
costs (e.g., operating and maintenance costs, recordkeeping and reporting costs). Annualization
of capital costs involves establishing an annual "payment" sufficient to finance the investment
over the expected lifetime of the equipment or loan period. This payment is often referred to as
the "capital recovery cost." To obtain annualized capital costs, a capital recovery factor is
applied to the total capital cost estimate. The capital recovery factor is based on the lifetime of
the capital equipment as well as the interest rate. To annualize the capital costs, the EPA
assumed an 8.5 percent interest rate,8 a 15-year lifetime for the pressure relief device equipment,
a 5-year lifetime for the equipment leaks capital, a 5-year lifetime for the pressure vessel capital,
a 5-year lifetime for the fenceline monitoring equipment, a 5-year lifetime for the EtO heat
exchange system equipment, a 20-year lifetime for the EtO flare capital, a 20 year lifetime for
process vent and storage vessel capital, and a 20-year lifetime for the capital associated with the
EtO wastewater requirements. The other proposed requirements were not assumed to require
capital expenditures.
The EPA estimated impacts for 15 years from 2027 to 2041. Capital costs are projected to
be incurred in their entirety in 2027 (Year 1). For the purposes of this analysis, we assume all
capital costs are incurred in 2027, rather than being spread out over the compliance period
(which is two years for the EtO standards and three years for the non-EtO standards). While the
affected firms may instead spread out these capital costs over the compliance timeframe, our
methodological approach presents a worst-case scenario where all capital costs across the
affected industry are incurred in one year.
In this EIA, the EPA also estimated the revenues that could be earned from selling the
product that is estimated to be recoverable as a result of complying with the proposed
requirements. The product recovery revenues are treated as an offset to the compliance costs
8 The interest rate was obtained from https://fred.stlouisfed.org/series/PRIME on August 10, 2024.
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(i.e., cost savings), though the revenues may also be considered as a benefit of the action.
Regardless of whether the revenue from product recovery is considered a compliance cost offset
or a benefit, the net benefits are equivalent. The cost estimates for this proposed rule are
provided both including and excluding the value of product recovery.9 When included, product
recovery is embedded in the annual cost estimate. When the value of product recovery is
included, the total annual cost estimate for the proposed rule is about four percent lower.
Table 3-1 presents the capital cost estimates and the total annual cost estimates (including
and excluding product recovery) by requirement for the EtO-specific requirements and the other
requirements.
Table 3-1. Engineering Cost Estimates by Requirement or Cost Component (2022$)
Capital costs
Total Annual Costs
(w/o Product
Recovery)
Total Annual Costs
(w/ Product
Recovery)
EtO-specific
Requirements
Fenceline Monitoring
Equipment Leaks
488,000
511,000
20,996,000
1,261,000
20,996,000
1,129,000
Heat Exchange
Systems
122,000
157,000
118,000
Pressure Vessels/
Storage Vessels
1,395,000
2,126,000
2,126,000
Wastewater
12,899,000
5,471,000
5,471,000
Flares
3,770,000
960,000
960,000
Total
19,185,000
30,971,000
30,800,000
Other
Requirements
Equipment Leaks
Pressure Relief
Devices
2,500,000
15,878,000
2,221,000
4,743,000
862,000
4,743,000
Heat Exchange
Systems
0
57,100
16,900
Pressure Vessels
3,800
3,300
3,300
Total
18,382,000
7,024,000
5,625,000
All Requirements
37,567,000
37,995,000
36,425,000
Total annual costs include annualized capital costs, annual operating and maintenance costs, and one-time costs. All
estimates are rounded to three significant figures.
9 Product recovery revenues were estimated per ton of VOC recovered at an estimate of $900 per ton based on the
estimates for SOCMI facilities (see https://www.epa.gov/stationary-sources-air-pollution/synthetic-organic-
chemical-manufacturing-industry-organic-national).
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Most of the estimated costs associated with this proposed rule are due to the new EtO-
specific requirements and standards for CMAS facilities that emit EtO. The largest component of
the total annual cost estimated for this proposed rule is the fenceline monitoring cost for affected
facilities that emit EtO, which is estimated to be about $21 million in 2022 dollars. This
requirement accounts for roughly 55 percent of the rule's total annual cost estimate without
product recovery and 58 percent of the total annual cost with product recovery. For additional
details on the cost analysis for fenceline monitoring, see the document titled Clean Air Act
Section 112(d)(5) GACT Standard Analysis and CAA section 112(d)(6) Technology Review for
Fenceline Monitoring for Chemical Manufacturing Process Units Associated with the Chemical
Manufacturing Area Sources NESHAP, available in the docket for this action. The updated
requirements for pressure relief devices (not an EtO-specific standard) are associated with the
highest estimated capital cost for any single requirement in Table 3-1 at about $16 million, which
accounts for 42 percent of the total capital costs estimated for the proposed rule.
Table 3-2 contains a summary of the estimated costs of all the requirements in the
proposed rule. The total capital cost of the proposed rule is estimated to be $37.6 million in 2022
dollars. The total annual cost without the value of product recovery is estimated to be $38
million, and with product recovery it is estimated to be $36.4 million.
Table 3-2. Engineering Cost Summary (millions 2022$)
Total Capital Costs
Total Annual Costs w/o product recovery
Total Annual Costs w/ product recovery
$37.6
$38.0
$36.4
3.4 Present Value of Costs
As part of fulfilling the analytical requirements of EO 12866, as amended by 14094, the
EPA presents estimates of the present value (PV) of the costs over the period 2027 to 2041.
Costs are in 2022 dollars and discounted to 2027 at a two percent discount rate per the
recommendation in OMB Circular A-4. The EPA also presents the equivalent annualized value
(EAV) at a two percent discount rate. The EAV takes the "lumpy" stream of costs (i.e., different
costs in different years) and converts them into a single value that, if paid each year from 2027 to
2041, would equal the original stream of values in present value terms. In other words, the sum
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of uniform EAVs across years in the analytical timeframe in present value terms yields the total
present value (i.e., the total discounted stream of costs across years).
Table 3-3 shows the estimated capital costs, annual operating and maintenance costs,
value of product recovery, and the total PV and EAV of the costs discounted at a two percent
rate for the 15 years from 2027 to 2041 in 2022 dollars. The values in the columns for capital
costs, annual costs, and product recovery are the undiscounted costs. Table 3-1 also shows the
sum of those undiscounted values (with product recovery savings included). The PV of the costs
without including the value of product recovery for the 15-year period from 2027 to 2041 is
estimated to be $495 million using a two percent discount rate and the EAV is $38.5 million. The
PV of the costs including the value of product recovery is estimated to be $474 million,
discounted at a two percent rate, and the EAV is $36.9 million. The PV and EAV of the costs are
about four percent lower when including the value of product recovery.
Table 3-3. Present Value of Costs and Undiscounted Costs of Proposed Rule (millions
2022$)
Year
Capital
costs
Annual
operating &
maintenance
costs
Value of
product
recovery
Total
undiscounted
costs (w/ product
recovery)
Discounted
stream of costs
(2%) w/o product
recovery
Discounted
stream of costs
(2%) w/ product
recovery
2027
$37.6
$34.9
($1.6)
$70.9
$72.4
$70.9
2028
$34.9
($1.6)
$33.3
$34.2
$32.6
2029
$34.9
($1.6)
$33.3
$33.5
$32.0
2030
$34.9
($1.6)
$33.3
$32.9
$31.4
2031
$34.9
($1.6)
$33.3
$32.2
$30.8
2032
$34.9
($1.6)
$33.3
$31.6
$30.2
2033
$34.9
($1.6)
$33.3
$31.0
$29.6
2034
$34.9
($1.6)
$33.3
$30.4
$29.0
2035
$34.9
($1.6)
$33.3
$29.8
$28.4
2036
$34.9
($1.6)
$33.3
$29.2
$27.9
2037
$34.9
($1.6)
$33.3
$28.6
$27.3
2038
$34.9
($1.6)
$33.3
$28.0
$26.8
2039
$34.9
($1.6)
$33.3
$27.5
$26.3
2040
$34.9
($1.6)
$33.3
$27.0
$25.7
2041
$34.9
($1.6)
$33.3
$26.4
$25.2
Present value $495 $474
Equivalent annualized value $38.5 $36.9
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3.5 Uncertainties
The cost estimates are subject to several sources of uncertainty. This analysis includes
many data sources as inputs, including source counts, equipment and labor costs, and
assumptions regarding the current state of the industry and how individual facilities carry out
their operations, the future state of the industry, and the future state of the world (e.g.,
regulations, technology, economic activity, and human behavior). There is also uncertainty about
the specific components of the engineering costs, such as the costs of the equipment and labor
required to comply with the rule and how the costs might change over time. Facilities may
comply with the requirements through alternative methods that were not accounted for in the
EPA's estimates. Each of the inputs and assumptions used are uncertain to some degree and
generate uncertainty in the overall cost estimates. When the uncertainties from each stage of the
analysis are compounded, even small uncertainties can have large effects on the total cost
estimates.
This analysis assumes full compliance with the rule across affected sources. This analysis
also assumes that compliance will start in 2027 and that all capital costs will be incurred that
year, and this may not be the case. Companies have two years to comply with the requirements
once the final rule is published (assuming finalization in 2025) but facilities may begin incurring
compliance related costs in the years leading up to the compliance date. The cost impacts were
estimated out to 2041 and more uncertainty is introduced when impacts are estimated farther into
the future.
The total number of facilities subject to the action could change. The EPA estimated
costs for existing facilities, but other new facilities may be constructed and become subject to the
requirements. Facilities may modify or upgrade in ways that affect the counts of the various
emissions sources impacted by this rule. Additionally, new control technology may become
available in the future at lower cost, and the EPA is unable to predict exactly how industry will
comply with the rule in the future. Some firms, such as small businesses, may not be able to
obtain financing at the assumed interest rate (i.e., the U.S. bank prime rate).
There may be an opportunity cost associated with the installation of environmental
controls for purposes of mitigating emissions that is not reflected in the compliance cost
estimates. If investment in environmental compliance displaces other productive investment, the
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difference between the rate of return on the displaced investment and the mandatory compliance-
related investment is a measure of the opportunity cost of the regulation. The opportunity cost is
the value lost to society of any goods and services that will not be produced and consumed
because some resources are reallocated towards pollution mitigation activities that yield lower
returns to society. To the extent that any opportunity costs are not included in the control costs,
the compliance costs for this action may be underestimated.
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4 EMISSIONS IMPACTS AND BENEFITS ANALYSIS
4.1 Introduction
The EPA estimates that the proposed amendments will reduce HAP emissions (excluding
EtO) from affected CMAS sources by approximately 158 tpy and reduce EtO emissions by
approximately 4.6 tpy. The benefits of the HAP and EtO emissions reductions are not monetized
in this EIA, but a description of the health effects associated with exposure to some of the HAP
emissions, including EtO, is provided. The other HAP emissions reductions from this rulemaking
may include, but are not limited to, acrolein and nickel.
The proposed rule will also have secondary emissions impacts on non-HAP pollutants.
The secondary emissions impacts include net reductions in VOC and methane emissions, and
increases in PM2.5, SO2, NOx (including N2O), CO2, and CO emissions. This section presents
secondary emissions impact estimates and the monetized impacts for the GHG changes (CH4,
N2O, and CO2) and using the EPA's SC-GHG estimates.10 The EPA acknowledges that some of
the secondary emissions changes may have health and environmental impacts associated with
PM2.5 and ozone changes, however, the EPA was not able to formally monetize these impacts for
inclusion in this EIA. Changes in emissions of NOxand VOCs affect ozone formation while
changes in PM2.5, SO2, and NOx affect PM2.5 concentrations. For information on the health
impacts associated with ozone and PM, see the Regulatory Impact Analysis (RIA) for the PM
National Ambient Air Quality Standards11 (NAAQS) and the Ozone NAAQS RIA.12
The EPA estimates that the proposed requirements would reduce VOC emissions by
1,560 tpy and methane emissions by about 250 tpy. Due to supplemental fuel or additional
electricity needed to comply with the proposed standards, the EPA estimates that emissions of
10 U.S. EPA. (2024). Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific
Advances. Found at https://www.epa.gov/environmental-economics/scghg. Or, see the Integrated Science
Assessment found here: https://www.epa.gov/isa/integrated-science-assessment-isa-particulate-matter.
11 U.S. EPA. (2024). Final Regulatory Impact Analysis for the Reconsideration of the National Ambient Air Quality
Standards for Particulate Matter. Found at: https://www.epa.gov/system/files/documents/2024-
02/naaqs_pm_reconsideration_ria_final.pdf. Or, see the Integrated Science Assessment found here:
https://www.epa.gov/isa/integrated-science-assessment-isa-ozone-and-related-photochemical-oxidants.
12 U.S. EPA. (2015). Regulatory Impact Analysis of the Final Revisions to the National Ambient Air Quality
Standards for Ground-Level Ozone. Found at: https://www.epa.gov/sites/default/files/2016-
02/documents/20151001ria.pdf.
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several pollutants would increase, including an additional 36 tpy of CO, 57,000 tpy of CO2, 43
tpy of NOx (including 0.97 tpy of N2O), 3 tpy of PM, and 0.26 tpy of SO2.
In accordance with executive orders and Agency policy, the EPA has carefully
considered the impacts of this action on communities with environmental justice concerns. This
is summarized in Section V.F of the preamble for this proposed rule.
4.2 Health Effects from Exposure to HAP Reduced by this Rule
This section contains qualitative discussion of the human health risks associated with
exposure to EtO and other HAP emissions. Due to methodology and data limitations, we did not
attempt to monetize the health benefits of reductions in HAP in this analysis. Instead, we are
providing a qualitative discussion of the health effects associated with HAP emitted from sources
subject to control under the final action.
Estimating the economic value of HAP is made challenging by the wide array of HAPs
and the many human health endpoints affected. For example, though EPA can quantify the
number and economic value of HAP-attributable deaths resulting from cancer, it is difficult to
monetize the value of reducing an individual's potential non-fatal cancer risk attributable to HAP
exposure. An alternative approach of conducting willingness to pay studies specifically on risk
reduction may be possible, but such studies have not yet been pursued. Furthermore, monetizing
non-fatal health effects remains a challenge for a variety of noncancer endpoints. EPA solicits
comments on data or methods that can be used to quantify and monetize non-fatal cancer and
noncancer health effects.
This rule proposes several standards to specifically reduce EtO emissions. This section
provides a qualitative discussion of the health risks associated with exposure to EtO and several
other HAP that may be reduced due to the proposed rule. The other HAP emissions reductions
from this rulemaking may include, but are not limited to, acrolein and nickel.
EtO
Ethylene oxide is used as a chemical intermediate in the manufacture of ethylene glycol
(antifreeze), textiles, detergents, polyurethane foam, solvents, medicine, adhesives, and other
products. EtO is also used to sterilize medical devices. The Department of Health and Human
Services and the International Agency for Research on Cancer have classified EtO as a known
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human carcinogen. The EPA has concluded that EtO is carcinogenic to humans by the inhalation
route of exposure. Evidence in humans indicates that exposure to EtO increases the risk of
lymphoid cancer (including non-Hodgkin lymphoma, myeloma, and lymphocytic leukemia) and,
for females, breast cancer.13 Noncancer health endpoints affected by chronic exposure to EtO
include irritation of the eyes, skin, nose, throat, and lungs, and damage to the brain and nervous
system. Health effects from acute (short-term) exposure consist mainly of central nervous system
depression and irritation of the eyes and mucous membranes. There is also some evidence
linking EtO exposure to reproductive,14 developmental, and endocrine effects.15 EtO is a
mutagen, meaning it acts directly on DNA and causes chromosome damage. Children may be
particularly susceptible to the harmful effects of mutagenic substances.16
Acrolein
Acrolein is primarily used as an intermediate in the synthesis of acrylic acid and as a
biocide. It may be formed from the breakdown of certain pollutants in outdoor air or from the
burning of organic matter including tobacco, or fuels such as gasoline or oil. It is toxic to humans
following inhalation, oral or dermal exposures. Acute (short-term) inhalation exposure may
result in upper respiratory tract irritation and congestion. The major effects from chronic (long-
term) inhalation exposure to acrolein consist of general respiratory congestion and eye, nose, and
throat irritation.17
Nickel
Nickel exists naturally in the environment.. Nickel dermatitis, consisting of itching of the
fingers, hands, and forearms, is the most common effect in humans from chronic (long-term)
skin contact with nickel. Respiratory effects have also been reported in humans from inhalation
13 U.S. EPA. (2016). Evaluation of the Inhalation Carcinogenicity of Ethylene Oxide (CASRN 75-21-8) In Support
of Summary Information on the Integrated Risk Information System (IRIS). National Center for Environmental
Assessment, Office of Research and Development. Washington, DC. EPA/635/R-16/350Fa. Found at
https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/1025tr.pdf.
14 U.S. EPA. (2018). Ethylene Oxide. Health Effects Notebook for Hazardous Air Pollutants. Found at
https://www.epa.gov/sites/default/files/2016-09/documents/ethylene-oxide.pdf.
15 Agency for Toxic Substances and Disease Registry (ATSDR). (2022). Toxicological Profile for Ethylene Oxide.
Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service.
16 U.S. EPA. (2005). Supplemental Guidance for Assessing Susceptibility from Early-Life Exposure to Carcinogens.
Found at https://www.epa.gov/sites/default/files/2013-09/documents/childrens_supplement_final.pdf.
17 U.S. EPA. (2009). Acrolein. Health Effects Notebook for Hazardous Air Pollutants. Found at
https://www.epa.gov/sites/default/files/2016-08/documents/acrolein.pdf.
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exposure to nickel. Human and animal studies have reported an increased risk of lung and nasal
cancers from exposure to nickel refinery dusts and nickel subsulfide. Animal studies of soluble
nickel compounds (i.e., nickel carbonyl) have reported lung tumors. The EPA has classified
nickel refinery dust and nickel subsulfide as Group A, human carcinogens, and nickel carbonyl
as a Group B2, probable human carcinogen.18
4.2.1 Summary of Risk Analysis for CMAS Category
The EPA's risk analysis for this proposed rule considered potential health impacts of all
HAP emitted by current and proposed CMAS source categories, including noncancer health
effects from chronic and acute exposure to HAP in addition to evaluating cancer risk.
Based on the assessment, seven CMAS facilities under the baseline were estimated to
have maximum cancer risks greater than 100-in-l million, all of which were driven primarily
(>90 percent) by EtO emissions. The maximum individual lifetime [cancer] risk (MIR)19 posed
by the evaluated sources is 800-in-l million under the baseline, driven by EtO emissions from
process vents (97 percent). Under the baseline, 3,600 people within 10 km of the evaluated
CMAS facilities are estimated to have cancer risks above 100-in-l million due to emissions from
the evaluated CMAS sources.
The chronic noncancer effects that were observed under the baseline are driven by
emissions of nickel compounds from two facilities. The acute noncancer risks are driven by
acrolein.
After the controls proposed in this action are implemented, the maximum individual
cancer risk is estimated to be 100-in-l million and no facilities are estimated to pose cancer risk
greater than 100-in-l million, thus zero people are projected to be exposed to CMAS-driven
18 U.S. EPA. (2000). Nickel Compounds. Health Effects Notebook for Hazardous Air Pollutants. Found at
https://www.epa.gov/sites/default/files/2016-09/documents/nickle-compounds.pdf.
19 For each facility, the EPA calculates the Maximum Individual Risk (MIR) as the cancer risk associated with a
continuous lifetime (24 hours per day, 7 days per week, 52 weeks per year, 70 years) exposure to the maximum
concentration at the centroid of each census block. Individual cancer risk is calculated by multiplying the
estimated lifetime exposure to the ambient concentration of each emitted HAP (in micrograms per cubic meter)
by the corresponding unit risk estimate (URE) for each HAP. The URE is an upper-bound (i.e., conservative)
estimate of an individual's incremental risk of contracting cancer over a lifetime of exposure to a concentration
of 1 microgram of the pollutant per cubic meter of air (|ig/m3). The MIR is the highest individual lifetime cancer
risk estimated for any census block within 50 km of a facility.
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cancer risk greater than 100-in-l million post implementation of the proposed requirements. See
section HE of the preamble and the document titled Risk Assessment for the CMAS Source
Category in Support of the 2025 Technology Review Proposed Rule, available in the docket for
this rulemaking, for additional details.
4.3 Secondary Emissions Impacts
The proposed rule will have secondary emissions impacts on non-HAP pollutants. This
NESHAP targets urban HAP, so impacts on other pollutants emitted by CMAS facilities that are
due to compliance with the proposed requirements are considered secondary. The secondary
emissions impacts include net reductions in VOC and methane emissions, and increases in
emissions of PM2.5, SO2, NOx (including N2O), CO2, and CO.
The EPA estimates that the proposed requirements would reduce VOC emissions by
1,560 tpy and methane emissions by about 250 tpy. Due to supplemental fuel or additional
electricity needed to comply with the proposed standards, the EPA estimates that emissions of
several pollutants would increase, including an additional 36 tpy of CO, 57,000 tpy of CO2, 43
tpy of NOx (including 0.97 tpy of N2O), 3 tpy of PM, and 0.26 tpy of SO2. The net GHG increase
due to the proposed rule in CO2 equivalent (CO2Q) is about 50,000 tpy. The secondary emissions
impacts are summarized in Table 4-1. For details on the methods and assumptions used to
estimate the secondary emissions impacts, see the memo titled Secondary Impacts for Flares,
Thermal Oxidizers, and Wastewater Controls for the CMAS NESHAP in the docket.
Table 4-1. Secondary Emissions Impacts
Pollutant
Net Secondary Emissions Impacts (tpy)
VOC
(1,557)
PM
3.3
SO2
0.26
NOx
43
CO
36
CO2
57,000
N2O
0.97
ch4
(251)
Total C02e
49,700
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The proposed flare requirements for EtO are estimated to result in GHG emission impacts
including increased CO2 emissions and a net reduction in CH4 emissions due to improved
combustion efficiency of steam-assisted flares, decreased steam demand, and increased need for
supplemental natural gas. There is a very slight increase of N2O emissions of in 0.1 tpy that
results from the improvement in flare destruction efficiencies. While CO2 emissions from flares
will increase with higher flare destruction efficiencies, emissions of methane will decrease and
there will be a net decrease in GHG emissions on a CChe basis associated with the flare
requirements.
The proposed rule will also require some facilities to install thermal oxidizers as a result
of the proposed standards requiring control of EtO emissions from certain process vents and
storage vessels, which are estimated to decrease HAP and VOC emissions but increase GHG
emissions and criteria air pollutant emissions. The secondary emissions impacts for the thermal
oxidizers come from the combustion of pollutants and from the combustion of any auxiliary
natural gas needed to operate the thermal oxidizer controls. The thermal oxidizers increase
emissions of CO2, N2O, and CH4, as well as several criteria air pollutants including PM, NOx,
S02, and CO.
Finally, the wastewater requirements are estimated to increase electricity usage and water
usage. As a result of the proposed standards requiring control of HAP emissions from certain
wastewater streams, the EPA anticipates that some CMAS facilities will need to install steam
strippers. The EPA estimates that the revised standards for controlling HAP from wastewater
will lead to an increase in electricity usage of 0.38 million kWh per year and an increase in water
usage of 290 million gallons per year.
The next section provides the monetized estimates of the GHG emissions changes for this
proposed rule. The EPA acknowledges that some of the secondary emissions changes may have
health and environmental impacts associated with PM2.5 and ozone changes, however, the EPA
was not able to monetize these impacts for inclusion in this EIA.
4.4 Climate Impact Valuation
The EPA estimates the climate impacts of GHG emissions changes expected from the
proposed rule using estimates of the social cost of greenhouse gases (SC-GHG) that reflect
recent advances in the scientific literature on climate change and its economic impacts. The SC-
4-6
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GHG is the monetary value of the net harm to society associated with a marginal increase in
GHG emissions in a given year, or the benefit of avoiding that increase. In principle, SC-GHG
includes the value of all climate change impacts (both negative and positive), including (but not
limited to) changes in net agricultural productivity, human health effects, property damage from
increased flood risk and natural disasters, disruption of energy systems, risk of conflict,
environmental migration, and the value of ecosystem services. The SC-GHG, therefore, reflects
the societal value of reducing emissions of the gas in question by one metric ton and is the
theoretically appropriate value to use in conducting benefit-cost analyses of policies that affect
GHG emissions.
In practice, data and modeling limitations restrain the ability of SC-GHG estimates to
include all physical, ecological, and economic impacts of climate change, implicitly assigning a
value of zero to the omitted climate damages. The estimates are, therefore, a partial accounting
of climate change impacts and likely underestimate the marginal impacts of abatement. A more
detailed explanation of each input and the modeling process to estimate the SC-GHG, as well as
characterizations of the various uncertainties associated with the SC-GHG estimates, are
provided in the final technical report, EPA's Report on the Social Cost of Greenhouse Gases:
Estimates Incorporating Recent Scientific Advances.20
This EIA provides monetized estimates of the benefits associated with the methane
emissions reductions and the disbenefits associated with the net increases in CO2 and N2O
emissions using the EPA's SC-GHG estimates. Monetized climate effects are presented using 1.5
percent, 2 percent, and 2.5 percent Ramsey discount rates. See Table 4-2 for the EPA's social
cost estimates per metric ton of CO2, CH4, or N2O in 2022 dollars for the years in the analytical
timeframe used for this analysis. These values are multiplied by the annual emissions change
estimates due to the proposed requirements and then discounted to 2027 to estimate the PV of the
climate impacts of the proposal.
20 U.S. EPA. (2023). Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific
Advances. Found at https://www.epa.gov/environmental-economics/scghg.
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Table 4-2. Social Cost per Metric Ton of CO2, CH4, and N2O (2022$)
2% Near-term Ramsey Discount Rate
Emission Year CO2 CH4 N2O
2027
245
2,436
70,212
2028
250
2,521
71,585
2029
253
2,605
72,956
2030
257
2,690
74,329
2031
262
2,788
75,728
2032
265
2,886
77,127
2033
270
2,985
78,527
2034
274
3,083
79,925
2035
278
3,182
81,324
2036
282
3,279
82,724
2037
287
3,378
84,123
2038
290
3,476
85,522
2039
294
3,575
86,922
2040
299
3,672
88,321
2041
303
3,778
89,900
Found at: https://www.epa.gov/environmental-economics/scghg
Table 4-3 shows the annual undiscounted monetized impacts of the changes in emissions
of CO2, CH4, and N2O while Table 4-4 shows these impacts discounted to 2027 over the 15-year
period using discount rates of 2.5 percent, 2 percent, and 1.5 percent to estimate the PV. The
estimated CO2 benefits are the largest in absolute terms at an estimated PV of negative $203.5
million for the years 2027 to 2041 discounted at a two percent rate in 2022 dollars. The estimated
methane benefits are about $10 million from 2027 to 2041 at a two percent discount rate.
4-8
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Table 4-3. Undiscounted Values of CO2, CH4, and N2O Emissions Impacts (millions of
2022$)
O
O
ch4
N20
2.5%
2.0%
1.5%
2.5%
2.0%
1.5%
2.5%
2.0%
1.5%
2027
(8.7)
(14.0)
(23.6)
0.5
0.6
0.8
(0.0)
(0.1)
(0.1)
2028
(8.9)
(14.2)
(23.9)
0.5
0.6
0.8
(0.0)
(0.1)
(0.1)
2029
(9.0)
(14.4)
(24.2)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2030
(9.2)
(14.7)
(24.5)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2031
(9.4)
(14.9)
(24.8)
0.6
0.7
0.9
(0.0)
(0.1)
(0.1)
2032
(9.6)
(15.1)
(25.1)
0.6
0.7
0.9
(0.1)
(0.1)
(0.1)
2033
(9.8)
(15.4)
(25.4)
0.6
0.7
1.0
(0.1)
(0.1)
(0.1)
2034
(9.9)
(15.6)
(25.7)
0.6
0.8
1.0
(0.1)
(0.1)
(0.1)
2035
(10.1)
(15.8)
(26.0)
0.7
0.8
1.0
(0.1)
(0.1)
(0.1)
2036
(10.3)
(16.1)
(26.3)
0.7
0.8
1.1
(0.1)
(0.1)
(0.1)
2037
(10.5)
(16.3)
(26.6)
0.7
0.8
1.1
(0.1)
(0.1)
(0.1)
2038
(10.7)
(16.5)
(26.9)
0.7
0.9
1.1
(0.1)
(0.1)
(0.1)
2039
(10.8)
(16.8)
(27.2)
0.7
0.9
1.1
(0.1)
(0.1)
(0.1)
2040
(11.0)
(17.0)
(27.5)
0.8
0.9
1.2
(0.1)
(0.1)
(0.1)
2041
(11.2)
(17.3)
(27.8)
0.8
0.9
1.2
(0.1)
(0.1)
(0.1)
Note: Negative values imply climate disbenefits associated with GHG emissions increases (CO2 and N20). Positive
values imply positive benefits (reduced CH4).
Table 4-4. Present Value of Emissions Impacts for CO2, CH4, and N2O Discounted to 2027
(millions of 2022$)
O
O
ch4
N20
2.5%
2.0%
1.5%
2.5%
2.0%
1.5%
2.5%
2.0%
1.5%
2027
(8.7)
(14.0)
(23.6)
0.5
0.6
0.8
(0.0)
(0.1)
(0.1)
2028
(8.7)
(14.0)
(23.6)
0.5
0.6
0.8
(0.0)
(0.1)
(0.1)
2029
(8.6)
(13.9)
(23.5)
0.5
0.6
0.8
(0.0)
(0.1)
(0.1)
2030
(8.5)
(13.8)
(23.4)
0.5
0.6
0.9
(0.0)
(0.1)
(0.1)
2031
(8.5)
(13.8)
(23.4)
0.5
0.6
0.9
(0.0)
(0.1)
(0.1)
2032
(8.5)
(13.7)
(23.3)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2033
(8.4)
(13.7)
(23.2)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2034
(8.3)
(13.6)
(23.2)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2035
(8.3)
(13.5)
(23.1)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2036
(8.2)
(13.5)
(23.0)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2037
(8.2)
(13.4)
(22.9)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2038
(8.1)
(13.3)
(22.9)
0.5
0.7
0.9
(0.0)
(0.1)
(0.1)
2039
(8.1)
(13.2)
(22.7)
0.5
0.7
1.0
(0.0)
(0.1)
(0.1)
2040
(8.0)
(13.2)
(22.7)
0.6
0.7
1.0
(0.0)
(0.1)
(0.1)
2041
(7.9)
(13.1)
(22.6)
0.6
0.7
1.0
(0.0)
(0.1)
(0.1)
Total
(124.9)
(203.5)
(347.1)
7.9
10.1
13.5
(0.7)
(1.0)
(1.6)
Note: Negative values imply climate disbenefits associated with GHG emissions increases (CO2 and N20). Positive
values imply positive benefits (reduced CH4).
4-9
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Table 4-5 shows the undiscounted values of the changes in all the GHGs combined, and
Table 4-6 shows the impacts discounted to 2027 over the 15-year period using discount rates of
2.5 percent, 2 percent, and 1.5 percent to estimate the PV. The total monetized GHG benefits,
which are negative on net, are estimated to be $194.5 million from 2027 to 2041 using a two
percent discount rate. The corresponding EAV at a discount rate of two percent is about negative
$15 million.
Table 4-5. Undiscounted Values of GHG Emissions Impacts (millions of 2022$)
2.5%
2.0%
1.5%
2027
(8.2)
(13.4)
(22.9)
2028
(8.4)
(13.7)
(23.2)
2029
(8.5)
(13.8)
(23.5)
2030
(8.7)
(14.1)
(23.7)
2031
(8.9)
(14.3)
(24.0)
2032
(9.0)
(14.5)
(24.3)
2033
(9.2)
(14.7)
(24.5)
2034
(9.3)
(14.9)
(24.8)
2035
(9.5)
(15.1)
(25.1)
2036
(9.7)
(15.3)
(25.4)
2037
(9.8)
(15.6)
(25.6)
2038
(10.0)
(15.7)
(25.9)
2039
(10.2)
(16.0)
(26.2)
2040
(10.3)
(16.2)
(26.5)
2041
(10.5)
(16.4)
(26.7)
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Table 4-6. Present Value of GHG Emissions Impacts Discounted to 2027 (millions of 2022$)
2.5%
2.0%
1.5%
2027
(8.2)
(13.4)
(22.9)
2028
(8.2)
(13.4)
(22.9)
2029
(8.1)
(13.3)
(22.8)
2030
(8.1)
(13.3)
(22.7)
2031
(8.0)
(13.2)
(22.6)
2032
(8.0)
(13.1)
(22.6)
2033
(7.9)
(13.1)
(22.4)
2034
(7.8)
(13.0)
(22.4)
2035
(7.8)
(12.9)
(22.3)
2036
(7.7)
(12.8)
(22.2)
2037
(7.7)
(12.8)
(22.1)
2038
(7.6)
(12.7)
(22.0)
2039
(7.6)
(12.6)
(21.9)
2040
(7.5)
(12.5)
(21.8)
2041
(7.4)
(12.5)
(21.7)
Total PV
(117.7)
(194.5)
(335.2)
EAV
(9.5)
(15.1)
(25.1)
Note: Negative values imply climate disbenefits associated with GHG emissions impacts.
4.5 PM2.5 and Ozone-related Health Impacts
This proposed rule is expected to increase annual emissions of direct PM2.5, NOx, and
SO2 as a secondary impact. Because NOx and SO2 are also precursors to secondary formation of
ambient PM2.5, increasing these emissions would increase human exposure to ambient PM2.5
throughout the year and would increase the incidence of PIVh.s-attributable health effects. This
rule is also expected to reduce ozone season VOC emissions and increase ozone season NOx
emissions. In the presence of sunlight, NOx and VOCs undergo chemical reactions in the
atmosphere resulting in ozone formation. Reducing VOC emissions (and increasing NOx
emissions) could impact formation of ground-level ozone and the incidence of ozone-related
health effects, though ozone response to changes in these emissions depends on local conditions.
To summarize, changes in emissions of NOxand VOCs affect ozone formation while changes in
PM2.5, SO2, and NOx affect PM2.5 concentrations. For information on the health impacts
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associated with ozone and PM2.5, see the Regulatory Impact Analysis (RIA) for the PM National
Ambient Air Quality Standards21 (NAAQS) and the Ozone NAAQS RIA.22
4.6 Uncertainties
Uncertainty is inherent in estimating baseline emissions from the source category, the
emission reduction estimates for the assumed compliance methods, how the industry will comply
and thus how emissions will be affected, the future of the industry and future source counts, the
assumptions regarding the GHG and criteria pollutant impacts associated with increased
electricity use to power the controls, as well as the SC-GHGs used to monetize the climate
impacts. In practice, data and modeling limitations restrain the ability of SC-GHG estimates to
include all physical, ecological, and economic impacts of climate change, implicitly assigning a
value of zero to the omitted climate damages. The estimates are, therefore, a partial accounting
of climate change impacts and likely underestimate the marginal impacts of abatement. A more
detailed explanation of each input and the modeling process to estimate the SC-GHG, as well as
characterizations of the various uncertainties associated with the SC-GHG estimates, are
provided in the final technical report, EPA's Report on the Social Cost of Greenhouse Gases:
Estimates Incorporating Recent Scientific Advances.23 For risk assessments, including the one
performed for this rule, there are uncertainties in the emissions datasets, dispersion modeling,
inhalation exposure estimates, and dose-response relationships.
21 U.S. EPA. (2024). Final Regulatory Impact Analysis for the Reconsideration of the National Ambient Air Quality
Standards for Particulate Matter. Found at: https://www.epa.gov/system/files/documents/2024-
02/naaqs_pm_reconsideration_ria_final.pdf. Or, see the Integrated Science Assessment found here:
https://www.epa.gov/isa/integrated-science-assessment-isa-particulate-matter.
22 U.S. EPA. (2015). Regulatory Impact Analysis of the Final Revisions to the National Ambient Air Quality
Standards for Ground-Level Ozone. Found at: https://www.epa.gov/sites/default/files/2016-
02/documents/20151001ria.pdf. Or, see the Integrated Science Assessment found here:
https://www.epa.gov/isa/integrated-science-assessment-isa-ozone-and-related-photochemical-oxidants.
23 U.S. EPA. (2023). Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific
Advances. Found at https://www.epa.gov/environmental-economics/scghg.
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5 SMALL ENTITY IMPACT ANALYSIS
5.1 Introduction
This proposed rule is a significant regulatory action. The presentation of the compliance
cost estimates in chapter 3 does not speak directly to potential economic and distributional
impacts of the rule, which may be important consequences to consider. This chapter contains a
discussion of the small entity analysis conducted for this rule and a qualitative discussion of
potential market and employment impacts.
5.2 Small Entity Screening Analysis
This section describes the methods used to perform the small entity screening analysis, as
well as the results of the screening analysis for this proposed rule. A small entity screening
analysis is used to determine whether a regulatory action may have a SISNOSE. Guidelines for
what constitutes 'significant' for economic impacts and 'substantial' for the number of small
entities are outlined in guidance prepared for the Regulatory Flexibility Act (RFA) as amended
by SBREFA.
The small entity impact analysis determined that this proposed rule will not have
significant cost impacts on a substantial number of small entities, thus EPA made a 'no
SISNOSE' determination for this proposed rule.
5.2.1 Description and Estimate of Affected Small Entities
The RFA describes small entities as "small businesses," "small governments," and "small
organizations" (5 USC 601). The amendments being finalized by the EPA in this action are
expected to affect a variety of businesses, including small businesses, but would not affect any
small governments or small organizations. The "business" is defined as the parent owner rather
than the facility. The EPA evaluates affected entities at the highest level of business ownership,
or the 'ultimate parent company' level. The analysis uses the annual revenues of the ultimate
parent company to determine the resources it has available to comply with the rule.
To conduct a small entity screening, the EPA first identifies the ultimate parent
companies that own affected facilities, and obtains those companies' most recent annual
5-1
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revenues, number of employees, and North American Industrial Classification System (NAICS)
code using the Dun & Bradstreet Hoover's online database.24 The annual revenues for each entity
should correspond to the year 2022 in most cases. U.S. Small Business Administration (SBA)
size standards are defined for each NAICS code based on either annual revenues or number of
employees. To determine whether an entity is small, the EPA identifies the size standard
corresponding to the NAICS code of the ultimate parent company and compares the company's
annual revenues (or number of employees) to the size standards. To assess potential impacts on
small entities, the EPA calculates cost-to-sales ratios, which compare facility-level total annual
compliance cost estimates aggregated to the ultimate parent company level (in case one company
owns multiple affected facilities) to the annual sales revenues of the ultimate parent company.
This metric for evaluating impacts is known as the "sales test" and is consistent with guidance
published by SBA's Office of Advocacy.25
The sales test is an impact methodology the EPA employs in analyzing entity impacts as
opposed to a "profits test," in which annualized compliance costs are calculated as a share of
profits. The sales test is frequently used because revenues or sales data are commonly available
for entities impacted by EPA regulations, and profits data normally made available are often not
the true profit earned by firms because of accounting and tax considerations.
Table 5-1 shows some of the most common NAICS codes for the ultimate parent
companies that own facilities affected by this proposed rule. The table shows a wide variety of
industries, although the most common code of the companies affected (21 out of 187, or 11
percent) is NAICS 551112: 'Offices of Other Holding Companies.' The second most common is
NAICS 325412: 'Pharmaceutical Preparation Manufacturing,' with 14 affected companies.
24 Dun & Bradstreet, Inc. (2024). D&B Hoovers. Retrieved from https://app.dnbhoovers.com/.
25 U.S. SB A. Office of Advocacy. (2017). A Guide for Government Agencies: How to Comply with the Regulatory
Flexibility Act. Retrieved from https://advocacy.sba.gov/2017/08/31/a-guide-for-government-agencies-how-to-
comply-with-the-regulatory-flexibility-act/.
5-2
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Table 5-1. Affected NAICS Codes
2022
NAICS
Parent
Facilities
Affected
NAICS Description
Companies
Affected
551112
Offices of Other Holding Companies
21
33
325412
Pharmaceutical Preparation Manufacturing
14
23
325211
Plastics Material and Resin Manufacturing
10
21
325180
Other Basic Inorganic Chemical Manufacturing
10
18
325998
All Other Miscellaneous Chemical Product and Preparation
Manufacturing
7
17
325199
All Other Basic Organic Chemical Manufacturing
13
17
424690
Other Chemical and Allied Products Merchant Wholesalers
11
11
325120
Industrial Gas Manufacturing
3
8
334516
Analytical Laboratory Instrument Manufacturing
4
7
523150
Investment Banking and Securities Intermediation
1
6
325320
Pesticide and Other Agricultural Chemical Manufacturing
6
6
325510
Paint and Coating Manufacturing
4
5
325612
Polish and Other Sanitation Good Manufacturing
3
5
See Table 5-2 for the number of entities and facilities by entity size. The EPA identified
280 CMAS facilities currently operating in the U.S. that will be impacted by this rule and incur
costs, 64 of which are owned by small entities. This rule is expected to impact a total of 187
businesses, 58 of which are small entities based on the business size standards defined by the
SB A.26 Thus, approximately 31 percent of businesses affected by this proposed rule are small
entities and they own about 23 percent of the affected CMAS facilities.
Table 5-2. Number of Percent of Entities and Facilities by Entity Size
Entity
Size
Number of Affected
Entities
Percent of Affected
Entities
Number of Affected
Facilities
Percent of Affected
Facilities
Small
58
31%
64
23%
Large
129
69%
216
77%
All
187
280
5.2.2 Compliance Cost Impact Estimates
The EPA calculated cost-to-sales ratios by first estimating the total annual compliance
cost for each affected entity by summing annualized capital costs with other annual costs such as
26 U.S. Small Business Administration. (2024). Table of Small Business Size Standards. Found at
https://www.sba.gov/document/support-table-size-standards.
5-3
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operating and maintenance costs. The EPA summed the annual compliance costs across facilities
owned by an affected entity (when an entity owns more than one affected facility) and divided
the company level total annual cost estimate by the company's annual sales to obtain the cost-to-
sales ratio. Small entities incurring total annual costs less than one percent of annual sales are
generally not expected to experience significant economic impacts due to the rule. Small entities
with costs greater than three percent of their annual revenues may potentially experience
significant economic impacts. The EPA also examines how many entities have cost-to-sales
ratios of one percent or greater. The EPA believes the one and three percent ratio thresholds,
which are from EPA guidance, are appropriate for analyzing impacts of this rule.
Table 5-3 shows by business size the average annual sales, employees, capital cost, total
annual cost (with and without product recovery), cost-to-sales ratio, and the max cost-to-sales
ratio. The table also shows the number and percent of businesses above the one and three percent
cost-to-sales ratio thresholds by business size. The average total annual cost (not including the
value of product recovery) per entity of the proposed requirements is about $66,000 for small
entities and about $265,000 for large entities. When including the value of product recovery, the
average total annual cost for small entities is about $59,000 and for large entities it is $256,000.
Average annual sales for the 58 small entities is $230 million while the 129 affected large
businesses have average annual sales of about $18 billion.
On average, small entities are estimated to experience a 0.3 percent cost-to-sales ratio not
including the value of product recovery to comply with the proposed rule, compared to an
average of 0.01 percent for large entities and about 0.1 percent for all entities. The highest cost-
sales-ratio estimated is 5.5 percent and is experienced by a small entity. It is important to note
that the small entities that own facilities affected by the proposed EtO standards have relatively
higher estimated cost-to-sales ratios, with an average cost-to-sales ratio of 3 percent for the three
EtO facilities that are owned by small entities. The small entity with the maximum cost-to-sales
ratio of 5.5 percent owns a facility affected by the proposed EtO standards. These three small
entities also have smaller average annual revenues compared to the whole population of small
entities, averaging $47 million in annual revenues compared to $230 million for all small
entities.
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Table 5-3. Average Costs per Entity and Cost-to-Sales Ratios by Entity Size
Large Small
All Businesses Businesses Businesses
Average Annual Revenues (millions)
$12,500
$18,100
$230
Average Employees
32,300
46,800
250
Average Capital Cost
$200,900
$255,100
$80,300
Average Total Annual Cost
$203,200
$265,100
$65,500
Average Total Annual Cost w/ Product
Recovery
$194,800
$255,700
$59,300
Average Cost-to-Sales Ratio
0.11%
0.01%
0.32%
Average Cost-to-Sales Ratio w/ Product
Recovery
0.10%
0.01%
0.29%
Maximum Cost to Sales Ratio
5.48%
0.40%
5.48%
Number and Percent of Businesses with Cost-
to-Sales ratio greater than or equal to 1%
5 (3%)
0 (0%)
5 (9%)
Number and Percent of Businesses with Cost-
to-Sales ratio greater than or equal to 3%
1 (1%)
0 (0%)
1 (2%)
Number of Businesses
187
129
58
Number of Facilities
280
216
64
Table 5-4 shows the total capital costs, total annual costs, product recovery value, and
annual operating and maintenance costs by business size. Out of a total capital cost estimate for
the rule of about $37.6 million, small entities are expected to incur about $4.7 million, or about
12 percent of the total capital costs. Additionally, out of a total annual cost estimate for the
proposed rule of about $38 million, small entities are expected to incur about $3.8 million, or
about 10 percent of the total annual costs. Large entities incur most of the total costs estimated
for the rule and they incur higher total annual costs per entity on average than small entities.
Table 5-4. Total Costs of Proposed Requirements by Entity Size (millions of 2022$)
All Businesses
Large Businesses
Small Businesses
Capital Costs
$37.6
$32.9
$4.7
Total Annual Costs
$38
$34.2
$3.8
Value of Product Recovery
$1.6
$1.2
$0.36
Total Annual Costs w/ Product Recovery
$36.4
$33
$3.4
Operating and Maintenance Costs
$34.9
$31.3
$3.5
Number of Businesses
187
129
58
Number of Facilities
280
216
64
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Table 5-5 shows the number of small and large entities with cost-to-sales ratios above
one percent and three percent. These cost-to-sales ratios were estimated using the total annual
costs without the cost savings from product recovery to be conservative. There are five small
entities, which account for about nine percent of the 58 affected small entities, with estimated
cost-to-sales ratios greater than or equal to one percent. There is one small entity, which accounts
for about two percent of all 58 small entities, with an estimated cost-to-sales ratio greater than or
equal to three percent. This small entity has an estimated cost-to-sales ratio of about 5.5 percent
(this entity has comparatively low annual revenues). Thus, four small entities have estimated
cost-to-sales ratios between one and three percent. No large entities have a cost-to-sales ratio
estimated to exceed one percent.
Table 5-5. Small Entity Screening Summary
Capital Cost
(Million 2022$)
Total Annual Cost
(w/o recovery
credits)
Entities with
1% or greater
Cost-to-Sales
Entities with
3% or greater
Cost-to-Sales
All Entities
$37.6
$38
5
1
Small Entities
$4.7
$3.8
5
1
Large Entities
$32.9
$34.2
0
0
Total annual costs do not include the value of product recovery.
The results of this small entity screening analysis do not indicate that a substantial share
of the small entities affected by this rule would incur potentially high costs relative to their
revenues. EPA guidance on RFA implementation suggests that when less than 20 percent of
small entities are estimated to experience annual compliance costs greater than or equal to one
percent of their annual revenues, it may be appropriate to determine that the rule would not have
a significant impact on small entities.27 The EPA believes the example thresholds provided in the
guidance are appropriate for the small entity analysis of this rule. Since a low percentage of
small entities that own CMAS facilities have estimated cost-to-sales ratios that exceed the
example thresholds in the guidance, the EPA does not expect this proposed rule to have
significant economic impacts on a substantial number of small entities, therefore the EPA has
certified a no SISNOSE determination for the proposed rule.
27 US EPA. (2006). Final Guidance for EPA Rulewriters: Regulatory Flexibility Act as amended by the Small
Business Regulatory Enforcement Fairness Act. Found at: https://www.epa.gov/sites/default/files/2015-
06/documents/guidance-regflexact.pdf.
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5.2.3 Uncertainties
The cost-to-sales ratios estimated in this analysis may be overstated or understated
depending on the accuracy of the information in the underlying data on parent company
ownership and parent company revenues in addition to the accuracy of the facility-level cost
estimates. The uncertainties associated with the cost estimates are discussed in chapter 3.
Regulatory costs can disproportionately impact small entities for several reasons, even
when larger firms incur higher absolute costs. In addition to potentially holding more market
power, larger companies may be better positioned financially than small businesses to invest in
proven compliance mechanisms, obtain financing for upgrades, raise prices to recoup regulatory
costs, or conduct research and development needed to innovate and identify more efficient
compliance methods. Small firms have fewer units of production to spread compliance costs
over. In some situations, larger firms may also have the advantage of being closer to meeting a
more stringent new standard under baseline conditions. This analysis assumes that small and
large entities both obtain financing for capital expenses at the same interest rates (8.5 percent). It
is possible that small businesses have less opportunities to obtain financing or receive higher
interest rates than larger businesses.
While a "sales test" can provide some insight as to the economic impact of an action such
as this one, it assumes that the impacts of a regulation are solely incident on a directly affected
firm (therefore, no impact to consumers of the affected product), or solely incident on consumers
of output directly affected by this action (therefore, no impact to companies that are producers of
the affected product). Thus, an analysis such as this one is best viewed as providing insight on a
polar example of economic impacts: maximum impact to directly affected companies. A "sales
test" analysis does not consider shifts in supply and demand curves to reflect intermediate
economic outcomes. EPA solicits comment on data, methods, or models that can be used to
reduce uncertainties in all aspects of the small entity impact analysis.
5.3 Economic and Employment Impacts
The EPA does not expect this proposed rule to affect market prices or the supply of the
products manufactured by affected CMAS facilities, regardless of whether costs are passed on to
consumers or absorbed by affected firms, and thus the EPA does not expect this rule to have
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market impacts. The costs of this rule are estimated to be low relative to the earnings of the
companies that ultimately own impacted CMAS facilities. The average cost-to-sales ratio for the
affected ultimate parent owners of CMAS facilities is 0.1 percent. Even if CMAS firms have
market power and/or demand is inelastic and affected firms are able to raise prices for their
chemical products in response to increased regulatory costs, it is reasonable to infer that the
impact on consumers from this rule is likely to be minor given the low cost-to-sales ratios. Given
the relatively low costs of the rule and the limited impacts on affected firms, the EPA also does
not expect this rule to impact employment.28 Any other economic impacts, such as changes in
firm concentration within the affected industry or movement of CMAS facilities outside of the
U.S., are also expected to be minor.
28 The employment analysis in this EIA is part of EPA's ongoing effort to "conduct continuing evaluations of
potential loss or shifts of employment which may result from the administration or enforcement of [the Act]"
pursuant to CAA section 321(a).
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6 NET BENEFITS
The costs, benefits, and net benefits of the proposed amendments to the NESHAP for
CMAS operations are shown in Table 6-1. The monetized net benefits are negative as they
include the estimated costs and the impacts of the secondary GHG impacts, which are negative
(i.e., climate damages). The EPA was unable to monetize the benefits associated with the
estimated HAP reductions for this proposed rule, however these reductions are expected to
reduce adverse health effects, including cancer, and would presumably increase the net benefits
of this rule if monetized. The PV of the monetized net benefits of the proposed amendments is
estimated to be about negative $670 million for the 15-year period from 2027 to 2041 discounted
at a two percent rate in 2022 dollars. The EAV is estimated to be negative $52 million using a
two percent discount rate.
Table 6-1. Summary of Benefits, Costs, and Net Benefits for the Proposed CMAS
Amendments from 2027 to 2041 (Millions 2022$)
2% Discount Rate
PV EAV
158 tpy of reduced non-EtO HAP and
4.6 tpy of reduced EtO
$474 $37
$495 $39
($21) ($1.6)
($195) ($15)
Reduced adverse health effects of reduced HAP exposure
Reduced VOC emissions of 1,560 tpy
Increased emissions of SO2 (0.26 tpy), NOx (43 tpy), PM2.5
(3 tpy), and CO (36 tpy)
Health and environmental impacts associated with effects
on PM2 5 and ozone
($670) ($52)
Monetized climate benefits are based on changes in methane, N20, and CO2 emissions and are calculated using the
respective estimates of the SC-GHG for the three pollutants using a 2 percent near-term Ramsey discount rate.
As noted in the table, the primary benefits of the rulemaking, the HAP reductions
associated with the proposed standards, are not monetized. However, as indicated by the risk
assessment and the magnitude of anticipated risk reductions, we expect health benefits from
reducing exposure to HAP.
Benefits
Net Compliance Costs
Compliance Costs
Value of Product Recovery
Monetized Climate Benefits
Non-Monetized Benefits *
Net Benefits
6-1
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6.1 Uncertainties
The results of this analysis are subject to many sources of uncertainty. This analysis
includes many data sources as inputs, including source counts, equipment and labor costs, and
assumptions regarding the current state of the chemical manufacturing industry and how
individual facilities carry out their operations, the future state of the industry, and the future state
of the world (e.g., regulations, technology, economic activity, and human behavior). There is
also uncertainty about the specific components of the engineering costs, such as the costs of the
equipment and labor required to comply with the rule and how the costs might change over time,
as well as the interest rate firms may be able to obtain when financing capital expenditures.
The EPA estimated costs for existing CMAS facilities, but other new facilities may be
constructed in the future and become subject to the requirements. Facilities may modify or
upgrade in ways that affect the number of the various emissions points impacted by this rule.
Additionally, new control technology may become available in the future at lower cost.
For the small entity analysis, the cost-to-sales ratios for individual firms estimated and
presented in Chapter 5 are based on the best information the EPA had available, but because the
cost estimates are subject to the uncertainty described above, the cost-to-sales ratios may
overestimate or underestimate the true impact for affected firms.
There is also uncertainty in the baseline emissions dataset and the modeling conducted to
estimate the emissions reductions due to the rule. Finally, there is uncertainty regarding the
benefits of the rule due to methodology and data limitations related to the association between
HAP pollutant exposure and the reductions in cancer and non-cancer endpoints, as well as the
monetary value of avoiding those health impacts. There is also uncertainty inherent to the GHG
impact estimates due to the many limitations associated with estimating SC-GHG values.
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United States Office of Air Quality Planning and Standards Publication No. EPA-452/P-25-001
Environmental Protection Health and Environmental Impacts Division January 2025
Agency Research Triangle Park, NC
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