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Ethanol Plant Clean Air Act Enforcement Initiative

In 2002, the US Environmental Protection Agency (EPA) began investigating a suspected pattern of noncompliance with the Prevention of Serious Deterioration/ New Source Review (PSD/NSR) requirements of the Clean Air Act (CAA) within the ethanol industry. The Clean Air Act's NSR program requires a source to install pollution controls and undertake other pre-construction obligations to control air pollution emissions. Subsequent investigations of several companies in the ethanol industry found them to be in violation for failure to obtain either PSD or minor source permits for new construction and/or modifications made at twelve facilities in Minnesota.

The ethanol industry sector manufactures ethanol for blending with automobile fuel, principally from industrial corn. Ethanol's high oxygen content allows automobile engines to combust fuel better, resulting in reduced tail pipe emissions. During the ethanol manufacturing process, dry mills burn off gasses which emit volatile organic compounds and carbon monoxide into the air.

A global settlement has been reached with Archer Daniels Midland (ADM), the largest competitor in this industry, encompassing 52 plants in 16 states. The settlement is the result of an unprecedented joint federal and state enforcement effort with 14 states and counties signing onto the consent decree. Under the settlement, ADM will implement broad sweeping environmental improvements at plants nationwide that will result in a reduction of at least 63,000 tons of air pollution a year. A similar settlement was reached in September 2005 with Cargill, the second largest competitor in this grain processing industry sector, which will result in emission reductions at 27 plants in 12 states with actual reductions of about 25,000 tons per year and reductions in permitted emissions of 40,000 tons per year.

Earlier agreements announced on October 2, 2002 will ensure each of twelve plants installs air pollution control equipment to greatly reduce air emissions. Emissions of volatile organic compounds (VOCs) will be reduced by 2,400-4,000 tons per year and carbon monoxide (CO) by 2,000 tons per year. In addition to contributing to ground-level ozone (smog), VOCs can cause serious health problems such as cancer and other effects; CO is harmful because it reduces oxygen delivery to the body's organs and tissues. The settlement also will result in annual reductions of nitrogen oxides (NOx) by 180 tons, particulate matter (PM) by 450 tons and hazardous air pollutants by 250 tons.

All the companies are required to install the Best Available Control Technology (BACT) and obtain appropriate permits from the state of Minnesota. Under the settlements, the plants will install thermal oxidizers that reduce VOC emissions by 95 percent from the feed dryers and meet new, more restrictive emission limits for NOx, PM, CO and hazardous air pollutants. In addition to emission control requirements valued at about $2 million per plant, each facility will also pay a civil penalty ranging from $29,000 - $39,000. The companies cooperated with the state and federal enforcement officials resulting in a expedited settlement process.

The following Minnesota facilities that have the combined capacity to produce more than 400 million gallons of ethanol per year, which is 17 percent of the national production, agreed to install state-of-the-art air pollution control technology at their dry corn mills:

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