Non-heme-dependent dioxygenase that catalyzes the conversion of 2-hydroxyethylphosphonate (HEP) to hydroxymethylphosphonate (HMP) in the biosynthesis of phosphinothricin tripeptide (PTT). PTT contains the unusual amino acid phosphinothricin attached to 2 alanine residues. Synthetic phosphinothricin (glufosinate) is a key component of commercial herbicides. 2-hydroxyethylphosphonate + O2 = formate + H(+) + hydroxymethylphosphonate Binds 1 Fe(2+) ion per subunit. kcat is 0.35 sec(-1). Phosphorus metabolism; phosphonate biosynthesis. Homodimer. Mediates the cleavage of the carbon-carbon bond of 2-hydroxyethylphosphonate (HEP) to produce hydroxymethylphosphonate (HMP) and formate without input of electrons or use of any organic cofactors. Reaction was initially supposed to follow a Criegee rearrangement with a phosphorus-based migrating group (PubMed:19839620). However, it was laster shown that it is not the case (PubMed:21381767). Phosphinothricin tripeptide (PTT) herbicide and fosfomycin antibiotic biosynthesis pathways share early steps starting with phosphoenolpyruvate before the pathways diverge after formation of 2-hydroxyethylphosphonate (HEP) (PubMed:17632514). HepD is involved in phosphinothricin tripeptide (PTT) herbicide biosynthesis after divergence of the 2 pathways (PubMed:19516340). Belongs to the non-heme iron-dependent dioxygenase family. Truncated N-terminus.