Citing limited ability to pay fines, biofuel producer settles with EPA

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Quad County Corn Processors Cooperative in Galva.

An Iowa biofuels producer who is set to receive $3.9 million in federal aid is also being sued by the federal government for alleged violations of the Clean Air Act.

In June, the U.S. Department of Agriculture announced $70.8 million in grants to help provide financial support to 10 Iowa biofuel producers who suffered unexpected market losses due to the coronavirus pandemic. COVID-19.

The funds were made available through the USDA’s Biofuels Production Program, which was created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). One of the 10 federal grant recipients is the Quad County Corn Processors Cooperative in Ida County, which is expected to raise $3,991,563.

Last week, another branch of the federal government, the Environmental Protection Agency, sued Quad County for up to $21.7 million in civil penalties, alleging violations of federal environmental protection law. air quality.

The federal government’s Renewable Fuels Standards program requires producers of renewable fuels to generate fuel credits, known as Renewable Identification Numbers, or RINs, in proportion to the amount of renewable fuel they produce. The program aims to reduce the country’s dependence on foreign oil and increase the production of renewable fuels, while continuing to reduce greenhouse gas emissions.

The lawsuit alleges that Quad County, at its Galva facility, produces non-cellulosic renewable fuel using corn as a feedstock. The company generates RINs for this production, according to the lawsuit. From May 26, 2015 to October 12, 2015, Quad County reportedly produced renewable fuel using equipment that introduced starch into the production process – although this step was not described in the information shared with the EPA.

The EPA also alleges that Quad County failed to submit EPA chemical analysis and data pertaining to the process that introduced the starch into the cellulosic fermenter.

And finally, as a third cause of action, the EPA claims that the company’s actions caused Quad County to create invalid RINs that benefited the company financially.

For each of the three alleged violations, the EPA says Quad County faces daily civil penalties of up to $51,796 for each of the 140 days the company allegedly violated federal standards. This liability totals $21,754,320.

Additionally, the EPA asserts that the company is liable for any economic benefits or savings generated by each of the alleged violations. The agency’s lawsuit does not include an estimate of these benefits or savings.

Quad County has yet to file a response to the lawsuit, and company executives did not immediately respond to calls and emails from the Iowa Capital Dispatch on Tuesday.

The EPA is the federal agency responsible for enforcing the requirements of the Renewable Fuel Standard program. To protect the integrity of the program and maintain a level playing field for all companies, the agency says it has taken enforcement action against producers accused of generating invalid RINs.

In addition to the civil lawsuit against Quad County, the EPA has filed lawsuits against other companies accused of creating invalid RINs.

In 2016, for example, the EPA settled a case against Western Dubuque Biodiesel of Iowa, accused of generating more than 36 million invalid RINs. The company agreed to pay a civil penalty of $6 million.

In a related matter, the EPA announced in 2018 that it had reached a settlement with NGL Crude Logistics regarding invalid RINs the company allegedly generated in connection with Western Dubuque Biodiesel. NGL agreed to pay a civil penalty of $25 million.

That same year, the EPA reached a settlement with the Chemoil Corporation that required the company to withdraw 65 million renewable fuel credits to resolve allegations that it violated the terms of the Renewable Fuel Standard program. The market value of the credits was over $71 million. Chemoil also agreed to pay a civil penalty of $27 million.

Find this story on Iowa Capital Dispatch, part of States Newsroom, a grant-supported network of news outlets and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Managing Editor Kathie Obradovich with questions: [email protected]

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