Ethanol: Information for Facilities
- Planning Guidance
- How Do I Propose an Ethanol Facility?
- Financial Assistance
- How Do I Apply for Permits?
The MPCA, along with the departments of Agriculture, Natural Resources, Employment and Economic Development, Transportation, and Commerce, developed a guidance document for assistance in planning to build an ethanol facility in Minnesota.
- Planning and Constructing an Ethanol Plant in Minnesota: A Guidance Document (file size = 1.8 MB)
The MPCA Small Business Assistance Unit has published a guide to assist small businesses in working through the permitting and environmental review process. Each chapter begins with a flowchart to help determine whether a permit is needed. It can be accessed as either a complete PDF, or as individual chapters. The guide also includes a list of sources for loans, grants and clean-up reimbursement funds.
The U.S. Environmental Protection Agency has compiled a manual which details many of the federal rules and regulations that are applicable to ethanol plants. The manual was developed by the EPA Region 7 Biofuels Workgroup, which includes the states of Kansas, Missouri, Nebraska and Iowa. Though it was not directly intended for Minnesota ethanol plants, many of the same policies and regulations apply. Contact MPCA and other state and local regulatory agencies to learn about Minnesota-specific requirements for ethanol facilities.
Minnesota is unique among midwestern states in mandating environmental review for certain types of projects. The environmental review process in Minnesota looks at how a proposed project could potentially affect the environment and ways to avoid or minimize impacts before the project is permitted and built. Environmental review can be a one or two-step process — the shorter, less detailed Environmental Assessment Worksheet (EAW) or the longer, more complex and detailed Environmental Impact Statement (EIS). Environmental review operates according to the rules of the Environmental Quality Board (EQB), but is carried out by a designated local government unit or a state agency. For industrial projects such as ethanol plants, as well as many other types of projects, the MPCA leads the review.
The goal of an EAW is to provide the public with a multi-program analysis of a proposed project's environmental effects. Once an EAW is written, it is put on public notice for a 30-day comment period, during which any interested party may ask questions and provide written comments on the proposed project. Following the public comment period, the project manager for the EAW responds to written comments and works with MPCA staff to write the Findings of Fact. For most projects, the EAW provides adequate information to determine potential impacts. If more information is needed, the review process may proceed to an EIS. The EAW project manager makes a recommendation to the commissioner on whether an EIS is needed. If an EIS is deemed unnecessary, and there is no request for an EIS during the public comment period, the environmental review process is complete and the facility may pursue issuance of any required permits. If an EAW is controversial or there are formal requests for an EIS, the EAW is likely to brought before the MPCA Citizens’ Board for the board’s determination about the need for an EIS.
An EAW is mandatory for any proposed new ethanol facility with a capacity of five million gallons or more per year. Likewise, an EAW is mandatory for increases of at least the same amount to capacity of existing facilities. An EIS is mandatory for construction or expansion projects of 125 million gallons or more per year (or 50 million gallons if the project is located in the seven-county Twin Cities metro area). A more complete description of the environmental review process and requirements included is located at the MPCA’s Environmental Review page.
Recently, the MPCA has developed guidance on greenhouse gas emissions and carbon footprint analysis. Proposers of projects that must complete environmental review and require an air-emissions permit are asked to prepare a carbon footprint as part of their environmental review. Additionally, if a project requires environmental review and completion of an Air Emissions Risk Assessment (AERA), an evaluation of the project’s greenhouse gas (GHG) emissions should be completed and submitted with the air permit application. See the section on Air Quality Permitting (below) for links to guidance documents on evaluating GHG emissions and carbon footprints.
Financial assistance programs for ethanol project proposers include the following:
Environmental Assistance Grant Program — consists of a competitive, two-stage application process used to identify and assist projects that will be most beneficial in furthering the MPCA’s mission of working with Minnesotans to protect, conserve, and improve our environment and enhance our quality of life, particularly within the focus areas identified each fiscal year.
Small Business Environmental Improvement Loan Program — provides low-interest loans to small businesses to finance environmental projects such as capital equipment upgrades that meet or exceed environmental regulations, and costs associated with the investigation and cleanup of contaminated sites.
Environmental Assistance Loan Program — allows the MPCA to loan up to a maximum of $100,000 at zero percent interest. Program guidelines call for loan funds to be matched by a minimum dollar-for-dollar match by loans from a participating financial institution.
Well before submitting any applications, call the MPCA project coordinator, listed under contacts on the MPCA’s ethanol Web page, to set up a preliminary meeting to discuss the proposed project more completely. It’s important to begin considering permitting issues such as air emissions control technology, source-water quantity and quality, and discharge-water quality and quantity, among other factors, while still considering potential sites and other variables for the proposed project. This consideration should begin well in advance of application for environmental review. Though the review and permitting processes may proceed concurrently, no permits can be issued for a facility until environmental review is complete.
The MPCA has developed a checklist to determine whether an Air Emissions Risk Analysis (AERA) will be required for proposed ethanol projects as part of the environmental assessment and air permitting process.
If a proposed project increases the potential to emit any air pollutant in excess of 100 tons per year, or meets one of the other criteria for an AERA (guidance for the AERA process can be found at: www.pca.state.mn.us/air/aera.html), you must also complete and submit a GHG Emissions Evaluation with the air permit application.
Note: if a project requires environmental review but does NOT meet the criteria for an AERA, proposers still should complete a carbon footprint analysis as part of environmental review, found at:
Water-related permits required for many ethanol plants include permitting of source-water quantity used (water appropriations) and the amount of water discharged from the site, including wastewater and stormwater.
Water Quantity Permitting
The Minnesota Department of Natural Resources issues water appropriations permits for facilities to use ground water or surface waters as water sources for proposed projects. Depending on the geographic location and details of the proposed project, the issue of water use has frequently been a controversial issue for ethanol plants. To learn more about the water appropriations permitting process, visit the DNR’s Water Appropriations Permit Program Web page.
The following DNR presentations, developed in February 2007, may be useful to proposers trying to understand environmental review and permitting as they relate to water-quantity protection.
- February 2007 Training Agenda
- DNR Introduction
- Ethanol Plants and Environmental Review by DNR
- Water Supply Management and Appropriation Permitting Regulations
- DNR - Permitting and Environmental Review Process for a Large Water User
Water Quality Management Issues
While potential sites are being evaluated for a proposed project, it is important to determine the quality of the water source that the facility plans to use. MPCA staff developed the following presentations to provide information about critical water quality management issues in ethanol project planning.
- Water Quality Protection Issues for New Water Supply Wells (file size = 1.6 MB)
- Minnesota DNR/MPCA Water Appropriation for High Volume Uses, Environmental Review Presentation
- Ethanol Production Facility WQ Management, (January 23, 2009)
- Biofuels: Reusing Municipal Wastewater (wq-wwr2-01)
Wastewater Discharge Permit
- NPDES/SDS Permits
If a facility proposes to discharge any wastewater, it must apply for a National Pollutant Discharge Elimination System/State Disposal System permit. Developing an accurate, well-defined water balance for the facility is an essential part of obtaining this permit. Often referred to as “water quality” permits, these combination federal/state permits are the primary tool for regulating wastewater discharges. MPCA has delegated authority from the U.S. Environmental Protection Agency to issue NPDES permits and also issues the state SDS permits. Together these water-quality permits establish specific limits and requirements to protect the quality of Minnesota's surface and ground waters for a variety of uses, including drinking water, fishing and recreation. Permits are regularly reviewed and updated as they expire, allowing the MPCA to incorporate new information about the impacts of pollutants on the environment in subsequent permits. The permits are enforced through a combination of self-reporting (to the MPCA, EPA or both) and compliance monitoring. Visit the Water-quality permitting forms Web page for more information and applications.
- Industrial Stormwater Discharge
All ethanol facilities must have permit coverage for stormwater discharges. Stormwater requirements are based on a facility’s SIC code and are typically included in the individual NPDES/SDS permit (above), which contains requirements for both the industrial wastewater discharge as well as the stormwater discharge. If the ethanol facility does not need an individual NPDES/SDS permit (e.g., if its wastewater discharge will be to a municipal wastewater treatment plant), the facility must apply for coverage under a permit for industrial stormwater. (In cases where a discharge is to be handled by another existing facility, any permit modifications for that facility must be completed prior to new permits being issued for the ethanol facility). Visit the Stormwater Program for industrial activities for more information.
Most tanks located above ground containing liquid substances (i.e., not gaseous or solid at ambient temperature and pressure) are subject to the MPCA’s rules for design, operation and permitting of ASTs. Tank appurtenances such as piping, valves, containment areas, and loading areas are also covered. Definitions in the rules can be found at this link. Minnesota Rules, Chapter 7151.1200 More general information on ASTs can be found on the AST Web page.
Facilities with one or more regulated ASTs with a total liquid substance storage capacity of one million gallons or more must obtain an individual permit from the MPCA following procedures outlined in Minnesota Rules Chapter 7001.4205-4250. The ethanol industry is included in this requirement, and details for obtaining this permit are included on the AST Web page for facilities with a capacity of one million gallons or more.
The MPCA’s main training Web page offers a number of training events, certification programs, and conferences. Some of this training may be applicable to the ethanol industry.
Between 2005 and 2009 anyone watching the ethanol industry — or for that matter the newspapers — noticed a marked increase in the number of MPCA-issued enforcement actions involving the ethanol industry. Since 2005 the ethanol sector has been required to perform various environmental improvement projects and has paid more than $1 million in monetary penalties for noncompliance with environmental rules, and compliance schedules were instituted at a number of production facilities.
Concerned with this trend, and despite the increased regulatory attention the sector was getting, MPCA management decided a comprehensive outreach program was needed to assist the industry to stay in compliance with its environmental permits. In 2009 an MPCA team was created to work on the issue full-time for a period of one year. Ethanol stakeholders were brought into the discussion, and a series of meetings were held during the next year.
The process concluded recently with publication of a final report on the effort. The report details a number of strategies the team developed which are now being used successfully, including creation of a monthly newsletter and e-mail distribution lists, an educational seminar, and voluntary, non-punitive compliance audits.
How to maintain compliance
One of the best ways t o maintain compliance with your MPCA permits is to carefully read through and make sure you understand the permit requirements. If conditions and terms are confusing, please ask questions of the MPCA compliance staff assigned to your facility; they can be of great help in providing assistance. It’s also helpful to keep your records organized and up to date, make the records available for inspections, track due dates, and ensure employees are trained so that required documents are submitted in a timely fashion. MPCA enforcement staff offer the following top 10 steps to compliance:
- Obtain appropriate permit approvals before construction or installation of new equipment or for changes from the originally permitted facility design.
- Track permit requirements carefully and know which submittal requirements need to be included to ensure that required records and reports are submitted in a timely fashion.
- Maintain your required plans, including those for Operation and Maintenance, Fugitive Emission Control, and Stormwater Pollution Prevention.
- Develop and implement a plan to meet limits during stack testing or water sampling.
- Conduct sampling and testing in a timely manner.
- Conduct and document the routine inspections of facility control equipment required in your permits.
- Calibrate gauges (e.g. pressure drop, water-flow rate, temperature monitoring devices) on an annual basis.
- Monitor and address significant deviations of control-equipment operating parameters such as temperature, pressure drop, or water flow rates.
- Conduct and document visible emission readings as required.
- Verify that monitoring equipment required by your permits has been installed.
Learn more about the types of enforcement tools the MPCA uses on the Enforcement Web page. For air-quality compliance questions related to ethanol facilities, contact the MPCA at 651-296-6300 and ask to speak with the compliance coordinator for air quality.
Benchmarking and Best Practices
- In 2007, the Minnesota Technical Assistance Program (MnTAP), in partnership with the MPCA's Prevention and Assistance Division, researched and developed initial benchmarks and potential best practices for improving efficiency of energy, water, and feedstock use and pollutant loading in Minnesota's corn ethanol industry. While MnTAP will further develop its findings through ongoing site work and intern projects, the first edition of the report on the study is available at: