Preventing discharge of biodiesel processing wastes into the environment contributes significantly to production expenses. Processors incur these costs, rather than discarding waste products more cheaply or easily for at least two reasons. First, processors are a part of their community and seek to be good corporate citizens. Second, federal law authorizes state and federal regulators to set and enforce limits on permissible discharges from industrial plants.

Federal regulation of water pollution originated in 1948 through enactment of the Water Pollution Control Act. The act initially focused federal support on state efforts to regulate pollutants detrimental to human health. Since then, the act has been amended to focus regulatory authority in the federal government and to more broadly address pollutants detrimental to environmental quality. Under the act, discharge of pollutants is regulated by means of a permitting system, commonly known as NPDES (National Pollution Discharge Elimination System). Crudely simplified, a producer who seeks to discharge a pollutant into waters that are subject to federal regulation (essentially all surface waters, including oceans, lakes, rivers, streams, storm runoff and municipal water treatment facilities) must obtain prior permission for the discharge from the appropriate regulatory agency. 

The current statutory scheme lodges ultimate NPDES permitting authority in the federal government (more specifically, in U.S. EPA), but allows states to obtain federal permission to exercise that authority in EPA’s stead. EPA has granted that authority to most states, subject to federal oversight. Whether a particular state exercises NPDES, permitting authority can be determined from the EPA or state environmental regulation agency websites.

The NPDES permitting process begins when a legal person submits an NPDES permit application for a project projected to discharge a pollutant into a federal waterway (e.g., a corporation that seeks to operate a biodiesel plant). The application is reviewed by an agent of the regulatory agency, who is called a “permit writer.” The permit writer reviews the application for completeness and accuracy, requests any additional information required of the applicant and develops a draft permit. 

The draft permit proposes limits on discharges of the pollutant(s) referenced in the application. Those limits are commonly based on a combination of (i) the nature of the pollutant, (ii) technological feasibility of pollutant discharge limits, (iii) consistency of pollutant discharge limits in the draft permit with overall concern for water quality in the body of water into which discharge is proposed, (iv) economic feasibility of pollutant discharge limits, (v) whether the application represents a new source of the pollutant or an expansion of an existing source, (vi) interference or obstruction of a public water treatment facility that might follow from discharge of the pollutant(s) therein, and (vii) any other conditions specific to the particular applicant or application. 

In the draft permit, the permit writer sets forth written bases he has arrived at and justifies the conditions to be imposed upon discharge of the pollutant by the applicant if the draft permit is finalized. That written justification is commonly called the fact sheet or the statement of basis. A draft permit also includes discharge monitoring and reporting requirements customized to the project, any other conditions that the applicant must satisfy for the specific project, and some conditions that are substantially the same for all permits.

A permit applicant can (and should) correspond with the permit writer during development of a draft permit. Draft permits are also subjected to public review through the permitting authority, and any interested party may submit comments during a limited period. Based on comments received from the applicant and the public, the permitting authority modifies the draft and issues a final permit to the applicant.

Although permit writers often rely on guidance provided by EPA for established industries, EPA has not yet developed specific guidance for the biodiesel industry. As the industry grows and matures, EPA can be expected to develop such guidance. Because this guidance is developed in consultation with industry participants, biodiesel operators should watch for opportunities to offer their thoughts and experience to EPA or state regulatory officials.

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Author: Gary D. Colby
Patent Attorney, Dilworth Paxson LLP
215-575-7075
gcolby@dilworthlaw.com