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Environmental Management Assistance Program

The Impact of Ethylene Oxide Regulation on Small Businesses

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The recent regulatory developments by the U.S. Environmental Protection Agency (EPA) have far-reaching implications, particularly for small businesses in the sterilization industry. The EPA has finalized the National Emission Standards for Hazardous Air Pollutants concerning Ethylene Oxide Commercial Sterilization and Fumigation Operations. This rule aims to reduce emissions of hazardous air pollutants from facilities using ethylene oxide (EtO) for sterilization purposes. While the regulation targets environmental protection, it also raises concerns about its potential impact on small businesses and entities operating in the sterilization industry.

Small businesses play a vital role in the commercial EtO sterilization sector, providing essential services for medical device manufacturers and healthcare facilities. However, the new regulatory requirements may pose challenges for these enterprises. Compliance costs, changes in market dynamics, and potential adjustments needed to meet the stringent standards could strain the resources of small entities.

The Regulatory Impact Analysis highlights the significance of the rule on small businesses, emphasizing the potential for significant cost impacts on a substantial share of affected entities. Small businesses may face difficulties in navigating the compliance landscape, which could lead to increased operational expenses and impact their competitiveness in the market.

In Chapter 5 “Economic Impacts” of EPA’s Regulatory Impact Analysis, EPA found the following:

  • The EPA identified 88 EtO sterilization facilities currently operating in the U.S. that will be impacted by this final rule and incur costs.
  • Two additional facilities are expected to start operating before the compliance deadline, bringing the total number of affected facilities to 90.
  • There are 50 ultimate parent companies that own these 90 facilities. About 44 percent (22) of these companies are small entities.
  • Out of the 90 facilities expected to incur costs to comply with the rule, 28 facilities, or about 31 percent, are owned by small entities.

One important caveat to note is that the regulation may trigger shifts in prices and supply of sterilization services, affecting small entities both within the sterilization industry and those reliant on sterilization services for their operations. Transitional effects, such as job losses in declining industries or regions with high unemployment rates, could further compound the challenges faced by small businesses.

As small businesses and their stakeholders assess the implications of the Ethylene Oxide regulation, it is crucial for small businesses to proactively address the potential impacts. Strategies to mitigate compliance costs, adapting to changing market conditions, and exploring collaboration opportunities with larger entities or industry stakeholders may help small businesses navigate the regulatory landscape effectively.

While the Ethylene Oxide regulation sets important environmental standards, its impact on small businesses cannot be overlooked. By understanding the challenges and opportunities presented by the rule, small entities can position themselves for resilience and sustainable growth in the evolving regulatory environment.

Learn more about the Final Air Toxics Rule for EtO Sterilization Facilities.

Jeremy Hancher is the EMAP Program Manager located at the Widener University SBDC.  He holds over 15 years of experience in environmental compliance, environmental policy, and program management.  He is proud to be the team lead of the award-winning EMAP program which provides free and confidential environmental assistance to the Pennsylvania small business community in fulfillment of the requirements of the Pennsylvania Air Pollution Control Act and Section 507 of the federal Clean Air Act.
In 2015, Jeremy was part of the team effort when EMAP was recognized by US EPA Administrator Gina McCarthy for Outstanding Accomplishments by a State Small Business Environmental Assistance Provider in Providing Technical Environmental Assistance to the Small Business Community. Jeremy holds a Bachelor’s degree from the University of Pittsburgh, a Master’s degree from the University of Pennsylvania, and a certificate from the Wharton School.