Understanding the Final PEPO NESHAP: Key Changes and Implications

Author: Andrew Kelley & Dayana Flores Granda

The U.S. Environmental Protection Agency (U.S. EPA) has finalized updates to the Polyether Polyols (PEPO) Production National Emission Standards for Hazardous Air Pollutants (NESHAP), 40 CFR Part 63, Subpart PPP. PEPO are chemical products used to make lubricants, adhesives, sealants, cosmetics, pharmaceuticals, soaps, and as feedstock for polyurethanes production. The final rule, effective March 18, 2026, reflects the technology review required under Clean Air Act (CAA) section 112(d)(6) and responds to prior petitions for reconsideration of the 2014 PEPO NESHAP.

Rule History

U.S. EPA promulgated the original PEPO production source category maximum achievable control technology (MACT) standards on June 1, 1999, with amendments published on July 1, 2004 and March 27, 2014. Following the 2014 amendment to the rule, Louisiana Environmental Action Network, Ohio Valley Environmental Coalition, and Sierra Club petitioned for reconsideration, primarily to address concerns regarding the affirmative defense provisions and the updated pressure relief device requirements. A complaint was filed in December 2023 that claimed U.S. EPA had unreasonably delayed final action in response to the petition for reconsideration and failed to conduct a technology review within 8 years. U.S. EPA entered into a consent decree to take actions in response to these complaints on November 22, 2024.

An initial proposed rule published on December 27, 2024 outlined the technology review conducted by the U.S. EPA under Section 112(d)(6) of the CAA, but it also described a “discretionary” residual risk review and contained proposed standards (specifically for ethylene oxide [EtO]) pursuant to Section 112(f) of the CAA. In this final rule, the U.S. EPA has not finalized any standards based on its the Section 112(f) review. Instead, standards are finalized pursuant to Section 112(d)(6), which allows U.S. EPA to factor cost into their review of the standards, including EtO requirements.

What the PEPO NESHAP Covers

The PEPO NESHAP establishes emissions limits, control requirements, monitoring, and reporting obligations for Hazardous Air Pollutants (HAP) at major source facilities that manufacture PEPO. The MACT standards are designed to reflect the best-performing technologies and practices currently available, ensuring significant emissions reductions while maintaining practical compliance pathways. The changes to the final rule incorporate several changes, including the following:

• Updates to monitoring requirements;
• Incorporating EtO-specific standards; and
• Various other amendments.

Each finalized set of updates is discussed further below.

Monitoring Updates

U.S. EPA finalized new standards for monitoring existing and new heat exchanger systems that now include quarterly monitoring using the Modified El Paso method and require leak repair with a newly defined leak threshold of 6.2 parts per million by volume (ppmv) or greater. In addition, U.S. EPA has included a second option for leak monitoring to allow owners and operators to use their current systems when 99% by weight or more of the organic compounds that could leak are water soluble and have a certain Henry’s Law constant. Leak definition thresholds also decreased for valves in gas/vapor and light liquid service from 500 ppmv to 100 ppmv, which significantly increases the required sensitivity for leak detection and will result more frequent identification and repair of smaller leaks.

Incorporating EtO-Specific Standards

U.S. EPA finalized EtO standards for various equipment types that are similar in nature to the requirements of 40 CFR Part 63, Subparts F, G and H (Hazardous Organic NESHAP [HON]). Unlike the HON rule, the standards finalized under Section 112(d)(6) of the CAA have a higher threshold for equipment to be in ethylene oxide service. The table below provides a comparison of in ethylene oxide service thresholds between the PEPO rule and the HON rule:

Table 1 – Comparison of Ethylene Oxide Service Thresholds

For heat exchangers in EtO service, the leak monitoring requirements increased from a quarterly monitoring schedule to a monthly monitoring schedule and any leaks above the leak action level must be repaired no later than 45 days after the sample was collected.

For process vents and storage vessels in EtO service, the control requirements largely reference the HON requirements by requiring a 99.9% control efficiency for EtO in non-flare control devices or an outlet  concentration less than 1 ppmv. Continuous process vents can also be controlled to a total annual mass emissions rate of 100 lb/yr for all combined process vents, which provides more flexibility than the 5 lb/yr EtO for all combined process vent under the HON rule.

For equipment leaks in EtO service, increased leak monitoring is required by component type and service. The table below provides a summary of the leak action levels and monitoring schedule:

Table 2 – Summary of Leak Monitoring

Following a detected leak for a component in EtO service, the repair must be completed within 15 days. However, delay of repair is permissible depending on the number of components in EtO service and the magnitude of the leak. For a facility with less than 5,000 components in EtO service, up to five components can be in delay of repair at any given time. Facilities with more than 5,000 components in EtO service cannot exceed 0.1% of equipment in delay of repair at any given time.

Wastewater streams in EtO service are required to (1) reduce EtO concentrations to below 1 part per million by weight (ppmw), (2) operate and maintain a steam stripper that meets the requirements of 40 CFR §63.138(d), or (3) reduce the concentration of EtO by 99%. Wastewater streams that do not contain more than 1 megagram (1.1 tons) of EtO per year are exempted from these requirements but must perform annual sampling.

Fenceline monitoring requirements are not included in the final rule due to identified implementation challenges and the uncertainty associated with the data used to justify the proposed fenceline monitoring requirements.

Various Other Amendments:

The final rule includes various other changes to the PEPO rule including:

1. PEPO Flares: Must meet MACT standards at all times, including during emergency flaring.
2. Pressure Vessel Monitoring: Requires verification that no detectable emissions are present.
3. Closed Vent Systems: Any bypass of an air pollution control device is considered a violation.
4. Process Vent Alignment: Standards for surge control vessels and bottoms receivers revised to align with process vent requirements.
5. Epoxide and HAP Updates: Definition of “epoxide” expanded and HAP list updated to include butylene oxide.
6. Performance Testing: Requires five-year performance testing for process vent control devices to verify ongoing compliance with MACT standards.
7. Transfer Operations: Establishes a new MACT standard requiring vapor balance systems or equivalent emission reductions for loading operations that exceed defined thresholds.
8. Work Practice Standards: Sets standards for activities with feasible alternatives, including maintenance vents, equipment openings, storage vessel degassing, and routine storage vessel maintenance, to ensure emissions are minimized.
9. Storage Vessel Controls: Revised applicability thresholds require controls for storage vessels with capacities as small as 38 cubic meters (m³) (10,000 gallons) and maximum true vapor pressure ≥ 6.9 kilopascals (kPa), expanding the range of storage vessels subject to regulation. The final rule also requires upgraded deck fittings and guidepole controls for all storage vessels equipped with an internal floating roof (IFR).
10. Continuous Process Vents: Retains the total resource effectiveness (TRE) index method for the determination of Group 1 continuous process vents.
11. Batch Process Vents: Lowers the control applicability threshold for batch process vents associated with nonepoxide organic HAP from 26,014 pounds per year (lb/yr) to 10,000 lb/yr, significantly expanding the number of emission points subject to control.

How does this impact other Chemical Sector Regulations currently under Reconsideration?

The PEPO rule is a good litmus test to see how the new U.S. EPA administration implements the Reconsideration of Air Rules Regulating American Energy, Manufacturing, Chemical Sectors that was announced by the Administrator in March 2025. This also give us a glimpse into the path that facilities with equipment in EtO service can expect as other chemical sector rules under reconsideration (HON, Ethylene Oxide Sterilizer Rule) get finalized. In general, this administration is walking back some of the most stringent and costly requirements that the previous administration added to the NESHAP.

Next Steps

Facilities subject to 40 CFR Part 63 Subpart PPP are encouraged to review the final PEPO NESHAP carefully to determine which sources at their site are affected. They should assess existing controls, monitoring, and maintenance practices to identify any gaps relative to the updated EtO limits, enhanced monitoring requirements, and other revised standards. Based on this assessment, facilities can develop clear implementation plans with defined strategies and timelines to meet the revised emission limits and operational obligations. Finally, all recordkeeping, reporting, and internal compliance documentation should be updated to reflect the new requirements, helping ensure that the facility maintains ongoing compliance with the final rule.

ALL4 has been following the evolution of the various chemical sector rules and has assisted facilities and industry associations with technical comments on proposals, so we have a deep understanding of how these rules are evolving. We can assist you with evaluating the impacts of the final PEPO NESHAP, developing gap analyses and compliance strategies, and implementing necessary monitoring and control measures. If you have any questions regarding the final rule updates to 40 CFR Part 63, Subpart PPP or ALL4’s strategy and compliance services, please reach out to your contact at ALL4 or Andrew Kelley at akelley@all4inc.com or 602.492.1523.