State must seek EPA approval before reclassifying ethanol plants

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Even though the Environmental Protection Agency changed a rule to exclude ethanol plants from the category of chemical process plants which would affect emissions permitting, Indiana had to seek approval from the federal agency before it could reclassify the ethanol production facilities.

In 2010, the Indiana Department of Environmental Management issued permits to some fuel-grade ethanol production facilities which did not categorize them as “chemical process plants,” as had been the case in the past. Those that fall under the chemical process plant category are permitted to emit only 100 tons of certain air pollutants a year. Other facilities not under that category may emit up to 250 tons of certain air pollutants a year.

The Natural Resources Defense Council challenged the reclassification, which led IDEM’s Office of Environmental Adjudication to find the plants should have been considered under the chemical process plants category. But the Marion Superior Court reversed.

The issue before the Indiana Court of Appeals is whether the state could properly exclude fuel-grade ethanol plants from this category without EPA approval of a modification of the Indiana State Implementation Plan.

The last EPA-approved SIP from 2001 includes these plants as chemical process plants. In 2007, the EPA promulgated a final rule excluding the ethanol plants from the definition of “chemical process plant.” Indiana never sought approval from the EPA to change its SIP but did enact a new law and administrative rule making the modifications.

“As the EPA rule change was more than a mere ‘clarification,’ Indiana was obliged to seek approval of an amendment to its SIP. Because it did not, the OEA was correct that the facilities were chemical process plants pursuant to the Indiana SIP and permits allowing pollutant emissions at the 250 ton-per-year level should not have been issued absent an EPA-approved change in the Indiana SIP,” Judge Melissa May wrote in Natural Resources Defense Council v. Poet Biorefining-North Manchester, LLC; Poet Biorefining-Cloverdale, LLC; Central Indiana Ethanol, Inc., et al., 49A02-1205-MI-423.

“Even if the failure to amend Indiana SIP could be disregarded, as the appellees suggest, IDEM’s past consistent treatment of fuel ethanol plants as chemical process plants would dictate the result we reach,” she continued. “Because IDEM had, in its prior permitting decisions, given the term ‘chemical process plant’ a ‘definitive interpretation, and later significantly revise[d] that interpretation,’ it was obliged to seek EPA approval for an amended SIP.”



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