An Iowa biofuels producer that stands to gather $3.9 million in federal help can be being sued by the federal authorities over alleged violations of the Clear Air Act.

In June, the U.S. Division of Agriculture introduced $70.8 million in grants to assist present monetary help for 10 Iowa biofuel producers that sustained sudden market losses as a result of COVID-19 pandemic.

The funds have been made out there by way of the USDA’s Biofuel Producer Program, which was created as a part of the Coronavirus Support, Aid, and Financial Safety Act (CARES Act). One of many 10 recipients of the federal grants is Ida County’s Quad County Corn Processors Cooperative, which stands to gather $3,991,563.

Final week, one other arm of the federal authorities, the Environmental Safety Company, sued Quad County for as much as $21.7 million in civil penalties, alleging violations of the federal Clear Air Act.

The federal authorities’s Renewable Gasoline Normal program requires producers of renewable fuels to generate gas credit, often known as Renewable Identification Numbers, or RINs, in proportion to the quantity of renewable gas they produce. This system is meant to cut back the nation’s dependence on international oil and enhance the manufacturing of renewable fuels, all whereas pursuing reductions in greenhouse fuel emissions.

The lawsuit alleges that Quad County, at its amenities in Galva, produces non-cellulosic renewable gas utilizing corn as a feedstock. The corporate generates RINs for that manufacturing, based on the lawsuit. From Might 26, 2015, by way of Oct. 12, 2015, Quad County allegedly produced renewable gas utilizing tools that launched starch into the manufacturing course of — though that step was not described in data shared with the EPA.

The EPA additionally alleges Quad County didn’t undergo the EPA chemical evaluation and knowledge associated to the method that launched starch into the cellulosic fermenter.

And at last, as a 3rd reason behind motion, the EPA claims that the corporate’s actions resulted in Quad County creating invalid RINs that have been of monetary profit to the corporate.

For every of the three alleged violations, the EPA says Quad County is accountable for civil, every day penalties of as much as $51,796 for every of the 140 days the corporate is claimed to be in violation of federal requirements. That legal responsibility totals $21,754,320.

As well as, the EPA says the corporate is accountable for any financial advantages or financial savings generated by every of the alleged violations. The company’s court docket petition doesn’t embrace an estimate of these advantages or financial savings.

Quad County has but to file a response to the lawsuit, and firm executives didn’t instantly reply to calls and emails from the Iowa Capital Dispatch on Tuesday.

The EPA is the federal company charged with imposing the necessities of the Renewable Gasoline Normal program. To be able to defend this system’s integrity and preserve a stage taking part in area for the entire company gamers, the company says, it has been taking enforcement motion towards producers accused of producing invalid RINs.

Along with the civil lawsuit towards Quad County, the EPA has pursued circumstances towards different corporations accused of making invalid RINs.

In 2016, for instance, the EPA settled a case towards Iowa’s Western Dubuque Biodiesel, which was accused of producing greater than 36 million invalid RINs. The corporate agreed to pay a civil penalty of $6 million.

In a associated case, the EPA introduced in 2018 that it had reached a settlement with NGL Crude Logistics over invalid RINs the corporate allegedly generated in reference to Western Dubuque Biodiesel. NGL agreed to pay a civil penalty of $25 million.

That very same yr, the EPA entered right into a settlement with the Chemoil Company that required the corporate to retire 65 million renewable gas credit to resolve allegations it violated the phrases of the Renewable Gasoline Normal program. The market worth of the credit was greater than $71 million. Chemoil additionally agreed to pay a $27 million civil penalty.