The rule, covering 218 organic chemical and polymer manufacturing plants, imposes stringent emission limits on six chemicals without exemptions for startup, shutdown, and malfunction.

On April 9, 2024, the US Environmental Protection Agency (EPA) issued a final rule amending the Clean Air Act New Source Performance Standards (NSPS) that apply to emissions from the Synthetic Organic Chemical Manufacturing Industry (SOCMI). The rule also finalizes amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP) that apply to the SOCMI (also called the Hazardous Organic NESHAP or HON) and to Group I and II Polymers and Resins Industries (P&R I and P&R II). Some of these amendments include updates to the maximum available treatment technology (MACT) standards, including those addressing heat exchange systems, storage vessels, and process vents, depending on the source category.

The rule will be effective 60 days after publication in the Federal Register but will likely be challenged.

EPA asserts that the rule “will provide critical health protections to hundreds of thousands of people living near chemical plants” by reducing both emissions of hazardous air pollutants as well as the pollution that contributes to smog. According to EPA, the rule will “dramatically reduce lifetime air toxics-related cancer risks for people living in communities near chemical plants that emit EtO and chloroprene.” The cancer risk evaluations were conducted under EPA’s Integrated Risk Information System (IRIS) and are a point of contention between EPA and regulated entities that believe the IRIS risk values are higher than what the evidence indicates.

EPA is targeting EtO emissions seriatim; the agency recently addressed EtO emissions from commercial sterilization facilities by amending a separate NESHAP.

Key Aspects of the Rule

1. Impacted Facilities: The NESHAP portion of the rule applies to 218 existing facilities listed in a document EPA published with the rule. Future facilities will be subject to the amended NESHAP to the extent they meet the source category criteria in the applicable NESHAP. The NSPS amendments will apply to covered SOCMI facilities that are constructed, reconstructed, or modified after April 25, 2023.
2. Impacted Chemical Emissions: While the rule mainly targets EtO and chloroprene, the NSPS and NESHAP amendments also apply stringent emissions limits to benzene, 1,3-butadiene, ethylene dichloride, and vinyl chloride.[1] The rule also affects standards related to specific facility equipment: for example, the NSPS and three NESHAP contain new MACT standards for process vents, storage vessels, equipment leaks, heat exchange systems, maintenance vents, and certain wastewater, depending on the applicable NSPS or NESHAP and implicated process.
3. Fenceline Monitoring: A significant facet of the rule is a new fenceline monitoring regime in the HON and P&R I NESHAP that requires such monitoring if any equipment or processes covered by the rule use, produce, store, or emit any of the above six chemicals.[2] The fenceline monitoring requirements are largely unchanged from the April 25, 2023, proposed rule and vary by type of facility and chemical at issue:
   • Neoprene Producers Only: Fenceline monitoring of chloroprene at neoprene production facilities in the US — of which there is only one — must begin within 90 days of the effective date of the rule, unless an extension is sought.[3]
   • Non-Neoprene Producers: All covered facilities that do not produce neoprene must begin fenceline monitoring within two years of the rule’s effective date.[4]
   • “Action Levels”: The rule sets action levels, on an annual average basis, for each of the covered chemicals:[5] EtO – 0.2 μg/m³; chloroprene – 0.3 μg/m³ (neoprene production facilities) and 0.8 μg/m³ (all other covered facilities)[6]; 1,3-butadiene – 3 μg/m³; vinyl chloride – 3 μg/m³; benzene – 9 μg/m³;and ethylene dichloride – 4 μg/m³. If any of these action levels are exceeded, the owner or operator must, beginning three years after the rule’s effective date, conduct a root cause analysis, potentially undertake more frequent sampling (including real-time sampling[7]), and institute corrective action.[8] All of this must be done on a compressed timeframe; initial corrective actions must be taken “no later than 45 days after determining there is an exceedance of an action level.”[9]
4. Fenceline Data Sharing: Beginning three years from the rule’s effective date, facilities subject to the HON or P&R I NESHAP must submit quarterly Fenceline Monitoring Reports.[10] These reports must contain, among other things, the sampling dates and results for each chemical, differences in concentrations between sampling periods, and information regarding any required corrective action plan.[11]
5. No Exemptions Related to Startup, Shutdown, and Malfunction: The rule eliminates exemptions that previously allowed for less stringent emissions controls during periods of startup, shutdown, and malfunction under the HON and the P&R I and P&R II NESHAP[12] as well as NSPS subparts IIIa, NNNa, and RRRa.[13] For facilities that commenced construction or reconstruction on or before April 25, 2023, these exemptions will be eliminated three years after the effective date or upon initial construction, whichever is later.[14] For sources beginning construction or reconstruction after April 25, 2023, the exemptions will be eliminated the later of 50 days after publication of the rule in the Federal Register or upon initial startup.[15]
6. Pressure Relief Devices (PRDs): For sources subject to the NSPS or the HON, any atmospheric release from a PRD in EtO service will constitute a violation of the pressure release management work practice standards.[16] The amendments in the rule also require owners and operators to implement measures to prevent emissions caused by PRDs, and, in the event of a violation, perform a root cause analysis and undertake corrective action as applicable.[17]

Challenges Are Likely

Manufacturers of EtO and the other implicated chemicals reportedly plan to challenge the substantive provisions of the rule. At least one manufacturer has publicly stated that it plans to challenge both the substance of the rule as well as the deadline to institute fenceline monitoring.

Any challenges to the rule are likely to include a request to stay the rule pending the outcome of the legal challenge. If the request to stay is granted, the effective date of the rule could be pushed back by a year or more. In that scenario, the fenceline monitoring requirements for non-neoprene manufacturers would not take effect for approximately at least three years, which would be right in the middle of the next presidential administration.

Latham & Watkins will continue to monitor developments in this area.

Endnotes

[1] 40 C.F.R. § 63.184.

[2] 40 C.F.R. §§ 63.184 and 63.502.

[3] 40 C.F.R. § 63.481(p)(2); 42 U.S.C. § 112(f)(4)(B); 40 C.F.R. § 63.6(i)(4)(ii).

[4] 40 C.F.R. § 63.481(p)(1).

[5] 40 C.F.R. § 63.184(d)(3).

[6] 40 C.F.R. § 63.502(a).

[7] 40 C.F.R. § 63.184(e)(1)(ii)(B).

[8] 40 C.F.R. § 63.184(e)(2).

[9] 40 C.F.R. § 63.184(e)(3).

[10] 40 C.F.R. §§ 63.182(d) and (e).

[11] Id.

[12] 40 C.F.R. §§ 63.102(e) and 63.525(j).

[13] 40 C.F.R. §§ 60.612a, 60.662a, 60.702a.

[14] 40 C.F.R. §§ 63.102(e) and (f); 40 C.F.R. § 63.100(k)(10).

[15] Id.

[16] 40 C.F.R. § 63.165(e)(3)(v)(D).

[17] 40 C.F.R. § 63.165(e).