1

MEMORANDUM

DATE: December 11, 2013

SUBJECT: Draft Economic Impact Analysis for the Proposed Amendments to the NESHAP 

for Acrylic and Modacrylic Fibers Production, Polycarbonate Production, and 

Amino/Phenolic Resins Production Source Categories

FROM: Julia Gamas (AEG, HEID)

TO: Nick Parsons (RCG, SPPD)

This memorandum contains the economic impact analysis for the proposed amendments to the 

National Emissions Standards for Hazardous Air Pollution (NESHAP) for Acrylic and 

Modacrylic Fibers Production, Polycarbonate Production, and Amino/Phenolic Resins

Production.

Economic Impact Analysis for the Proposed Acrylic and Modacrylic Fibers Production, 

Polycarbonate Production, and Amino/Phenolic Resins NESHAP

The economic impact and small business analysis for this proposed rulemaking are reported in 

this document. Risk and technology reviews are proposed for the following source categories: 

Acrylic and Modacrylic Fibers Production (AMF), Polycarbonate Production (PC), and 

Amino/Phenolic Resins Production (APR). The rules are: NESHAP for Source Categories: 

Generic Maximum Achievable Control Technology Standards (40 CFR part 63, subpart YY); 

and NESHAP: Manufacture of Amino/Phenolic Resins (40 CFR part 63, subpart OOO). Table 1 

lists the industries affected by these rules and covered in this analysis. More information on the 

proposed rules can be found in the preamble for this rulemaking.

Table 1. Industrial Source Categories Affected by this Proposed NESHAP Review

NAICS Code 

2007/(2012) Category & Description Plants

325222/(325220)

Acrylic and Modacrylic Fibers and Filaments Manufacturing (AMF): Production 

of either of the following synthetic fibers:

(i) Acrylic fiber.

(ii) Modacrylic fiber.

1

325211/(325211) Polycarbonate Resins Manufacturing 4

325211/(325211) Amino and Phenolic Resins Manufacturing 18

This document contains a screening analysis for these three industries. It is expected that the 

economic and small business impact of the proposed standard will be small given that the total 

capital costs of the rule reviews are estimated to be $1.6 million 2012 dollars and the annualized 

costs (annualized capital costs, operation and maintenance costs and labor expenses) are 

estimated to be $0.5 million 2012 dollars. The rule will affect plants owned by large, mostly U.S. 

owned multinational companies with substantial annual revenues and extensive product mixes. 

Therefore, we assume zero or very small impacts outside of the affected industries. No small 

businesses will be affected by the rulemaking.
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A partial equilibrium analysis is deemed more than necessary given the expected size of the 

impacts. Therefore, a screening analysis was conducted by calculating the percent of sales that 

the annual costs of compliance represent. The annualized cost per sales estimated for a company 

represents the maximum price increase in affected product needed for the company to 

completely recover the annualized costs imposed by the proposed regulation. The “sales test” is 

the impact methodology the EPA employs in economic impact analysis such as this one as 

opposed to a “profits test”, in which annualized compliance costs are calculated as a share of 

profits.1This is because revenues or sales data are commonly available data for entities normally 

impacted by EPA regulations and profits data normally made available are often not the true 

profits earned by firms due to accounting and tax considerations. Firms and entities often have 

ways legally available in the tax code to minimize their reported profits; thus, using reported 

profits may lead to a less than accurate estimate of the economic impact of a regulation to an 

affected firm or entity and their consumers. While screening level analyses are often employed to 

estimate impacts to small business or entities as part of an analysis in compliance with the 

Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement 

Fairness Act (SBREFA), a screening level analysis can also be employed in an economic impact 

analysis such as this one whose focus is on large, regulated companies.

Table 2 shows the estimated annualized cost faced by each parent company in order to comply as 

well as the percentage this cost represents from its total revenues. The percentages for all of the 

industries are between 0% and 0.11%, and at an average of 0.01%.

None but one of the affected companies are small businesses, and none of the parent companies 

have an employee size below the small business size definition established by the Small Business 

Administration (SBA) for their industries. For NAICS 325211, the small business size definition 

is 750 employees or less; for NAICS 325222, the definition is 1,000 employees or less.2

Therefore there is no small business impact from these NESHAP rule reviews. For the 

manufacture of Amino/Phenolic Resins, Emerald Performance Materials reported 750 employees 

in 2012. However, the compliance costs represent 0.00% of its revenues and thus, there is no 

significant impact on a substantial number of small entities.

 

1 More information on sales and profit tests as used in analyses done by U.S. EPA can be found at 

http://www.epa.gov/sbrefa/documents/rfaguidance11-00-06.pdf, pp. 32-33. 

2

SBA small business size definitions are found at 

http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. This is the small business size table as of 

March 26, 2012. NAICS codes in this table reflect the 2007 NAICS version.
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Table 2. Economic Impacts to Parent Firms

Source Category Parent Company Number of 

plants

Parent Company 

Revenues 

(Thousand 2012 

Dollars)

Total Annualized Costs 

for Affected Parent 

Company (Thousand 

2012 Dollars)

Total 

Annualized 

Cost/Revenues 

for Affected 

Parent 

Companies (%)

Acrylic and Modacrylic Fibers 

(AMF) Cytec 1 $ 1,708,100.00 $ 10.80 0.00%

Polycarbonates Production 

(PC)

Bayer 1 $ 49,147,095.18 $ 14.93 0.00%

Dow Chemical Company 1 $ 56,786,000.00 $ 7.46 0.00%

General Electric 2 $ 147,359,000.00 $ 7.46 0.00%

Amino and Phenolic Resins 

(APR)

Dynea 1 $ 7,354.94 $ 8.32 0.11%

Emerald Performance Materials 1 $ 164,800.00 $ 8.32 0.01%

Ineos 1 $ 43,000,000.00 $ 8.32 0.00%

Koch Industries 6 $ 115,000,000.00 $ 220.60 0.00%

Momentive 1 $ 747,900.00 $ 8.32 0.00%

Nuplex Resins 1 $ 1,257,507.39 $ 8.32 0.00%

Panolam Industries International 2 $ 67,800.00 $ 16.64 0.02%

SI Group International 1 $ 492,600.00 $ 8.32 0.00%

Eastman 1 $ 1,950,000.00 $ 8.32 0.00%

Tembec 1 $ 1,601,923.08 $ 178.99 0.01%

3M 2 $ 29,904,000.00 $ 16.64 0.00%

Source: Plant and cost data: U.S. EPA ; Revenue data: Company Annual Reports, company website reported revenues and sales, and Hoovers company profiles.