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MEMORANDUM

DATE: September 16, 2014

SUBJECT: Economic Impact Analysis for the Final Amendments to the NESHAP for Acrylic 

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

FROM: Julia Gamas, EPA/OAR/OAQPS/HEID/AEG

TO: Nick Parsons, EPA/OAR/OAQPS/SPPD/RCG

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

the NESHAP for Acrylic and Modacrylic Fibers, Amino/Phenolic Resins, and Polycarbonate 

Production.

Economic Impact Analysis for the Final Amendments to the Acrylic and Modacrylic Fibers, 

Amino/Phenolic Resins, and Polycarbonate Production NESHAP

The economic impact and small business analyses for this final rulemaking are reported 

in this document. Two National Emission Standards for Hazardous Air Pollutants (NESHAP) rule 

reviews are finalized for: Acrylic and Modacrylic Fibers, Amino/Phenolic Resins, and 

Polycarbonate Production. The rules are: NESHAP for Source Categories: Generic Maximum 

Achievable Control Technology Standards; and NESHAP: Manufacture of Amino/Phenolic 

Resins. Table 1 lists the industries affected by these rules and covered in this analysis. These 

rules are promulgated under court order by September 16, 2014. More information on the final 

rules can be found in the preamble for this rulemaking.

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

NAICS Code (2012) Category & Description Plants

325220 Acrylic and Modacrylic Fibers and Filaments Manufacturing (AMF): Production 

of either of the following synthetic fibers:

(i) Acrylic fiber.

(ii) Modacrylic fiber.

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325211 Polycarbonate Resins Manufacturing (PC) 4

325211 Amino and Phenolic Resins Manufacturing (APR) 19

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

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

total capital costs of the rule reviews are estimated to be $4.1 million 2013 dollars and the 

annualized costs (annualized capital costs, operation and maintenance costs and labor 

expenses) are estimated to be $1.05 million 2013 dollars. The rule will affect plants owned by 

large, mostly U.S. owned multinational companies with substantial annual revenues and 
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extensive product mixes. Therefore, we assume zero or very small impacts outside of the 

affected industries.

A partial equilibrium analysis, a type of economic impact analysis that estimates changes 

in prices and output for the regulated sector resulting from a rule’s implementation, 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 final regulation. The “sales test” is the impact methodology 

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.1 This 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 0.02%, and at an average of 0%.

None of the affected companies are small businesses, either because their employment 

levels exceed the Small Business Administration (SBA) threshold for a small business or because 

they are owned by a parent company that is not a small business given its annual receipts in 

dollars or employment levels.2 Therefore there is no small business impact from these NESHAP 

rule reviews, and there is no significant impact on a substantial number of small entities 

(SISNOSE) that results from this rulemaking.

 

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 

July 14, 2014. NAICS codes in this table reflect the 2012 NAICS version.
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Table 2. Economic Impacts to Parent Firms

Source Category Parent Company

Number 

of 

plants

Parent Company 

Revenues 

(Thousand 

2013 Dollars)

Total Annualized Costs for 

Affected Parent Company 

(Thousand 

2013 Dollars)

Total 

Annualized 

Cost/Revenues 

for Affected 

Parent

Companies (%)

Acrylic and 

Modacrylic 

Fibers (AMF)

Cytec Industries Inc. 1 $ 1,935,000.00 $ 11.57 0.00%

Polycarbonates 

Production (PC)

Bayer AG 1 $ 51,286,079.18 $ 13.74 0.00%

Dow Chemical Company 1 $ 57,080,000.00 $ 6.87 0.00%

General Electric Company 2 $ 146,045,000.00 $ 6.87 0.00%

Amino and 

Phenolic Resins 

(APR)

Dynea Oy 1 $ 477,520.00 $ 7.97 0.00%

Emerald Performance Materials, LLC 1 $ 163,600.00 $ 7.97 0.00%

Ineos Capital Limited 1 $ 47,000,000.00 $ 7.97 0.00%

Koch Industries, Inc. 6 $ 115,000,000.00 $ 916.01 0.00%

Momentive Performance Materials Holdings, LLC 1 $ 2,577,300.00 $ 7.97 0.00%

Nuplex Resins 1 $ 1,310,953.54 $ 7.97 0.00%

Occidental Petroleum Corporation 1 $ 2,577,300.00 $ 7.97 0.00%

Panolam Industries International 2 $ 75,200.00 $ 15.94 0.02%

SI Group International 1 $ 1,600,000.00 $ 7.97 0.00%

Eastman 1 $ 9,350,000.00 $ 7.97 0.00%

Tembec 1 $ 1,555,555.56 $ 7.97 0.00%

3M 2 $ 30,871,000.00 $ 15.94 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.