• New EPA Regulations Will Ease Air Permitting Requirements for Fuel Ethanol Facilities
  • March 3, 2006 | Authors: Carolyn V. Wolski; James J. Bertrand
  • Law Firm: Leonard, Street and Deinard, Professional Association - Minneapolis Office
  • The Environmental Protection Agency (EPA) proposed February 28, 2006, that air permitting requirements for fuel ethanol facilities be the same as those for corn-milling facilities that produce ethanol for human consumption. The changes will ease the requirements imposed on fuel ethanol facilities under Clean Air Act Prevention of Significant Deterioration (PSD), New Source Review (NSR) and Title V permitting programs.

    Under the Clean Air Act, a facility is a "major source" subject to NSR if its emissions of certain pollutants meet one of two thresholds: 100 tons per year or 250 tons per year. EPA uses Standard Industrial Classification (SIC) codes to determine which threshold applies to a particular facility. The SIC code for a facility is based on its primary activity, which in the case of a manufacturing facility is its product or products. If the source falls within one of the 27 SIC codes listed in the NSR regulations, the facility faces the 100-ton threshold. If not, the 250-ton threshold applies.

    One SIC code listed in the NSR regulations applies to chemical process plants. Included in "chemical process plants" are facilities primarily engaged in manufacturing ethanol fuel. As a result, fuel ethanol facilities currently face the more stringent 100-tons-per-year threshold. Wet or dry corn-milling facilities that create food products (starch, syrup, oil, sugar and other products) or ethanol for human consumption are subject to the less stringent threshold of 250 tons per year. The only differences in the processes for producing ethanol for fuel versus human consumption are the use of gasoline or solvent-based denaturants added to make fuel ethanol undrinkable and the equipment is not food-grade.

    Under the EPA's proposed new definition for "chemical process plants," corn-milling facilities will be treated the same whether they produce ethanol for fuel or human consumption. This change will significantly raise the threshold for the PSD permitting program for fuel ethanol facilities from 100 tons per year to 250 tons per year. In addition, fuel-producing ethanol plants would no longer have to count fugitive emissions when assessing the thresholds for the Title V, NSR or PSD permitting programs. Without having to consider fugitive emissions, some existing fuel-producing ethanol facilities may be able to expand production.

    EPA will accept comment on this proposal for 60 days following publication in the Federal Register.