Nature of Activity: The Southern Minnesota Beet Sugar Cooperative plant sought to increase its wastewater discharge to the Minnesota River in order to accommodate a planned 40% increase in production. Any increased discharge would have normally been prohibited because the river is severely impacted by excess phosphorus. The Minnesota Pollution Control Agency issued SMBSC a permit allowing an increased discharge but specifying that the facility must obtain offsetting reductions from nonpoint sources in the basin. SMBSC will seek reductions via BMPs from farmers, some of whom are members of the cooperative. SMBSC itself is ultimately responsible for the reductions.

Environmental Problem: Nutrients in Minnesota River.

Pollutant(s) / Pollution Type(s): Phosphorus.

Trade Types: Point/nonpoint

Stage of Implementation: The permit was issued in April, 1999, and requires SMBSC to obtain 2600 lbs. of phosphorus credits before February, 2000, and additional amounts by future dates.

Relation to TMDL: There is a TMDL for the lower Minnesota River for dissolved oxygen. Excess phosphorus entering the watershed leads to eutrophication and increased oxygen demand.

Number of Potential Participants: Southern Minnesota Beet Sugar Cooperative and multiple farmers

Trading Ratios: 2.6:1. For each additional pound of phosphorus to be discharged by SMBSC, 2.6 pounds of upstream reductions must be obtained: 1 lb for the offset, 0.6 lb for uncertainty, and 1 lb for environmental improvement.

Estimated Cost Savings: Unknown

Available Written Information: The NPDES permit and a brief summary are available from the Minnesota Pollution Control Agency.

Innovative Aspects: The fact that the SMBSC is a cooperative owned by farmers provides for an unusually direct relationship between the point source discharger and some of the nonpoint sources. There are very high penalties for non-compliance.

Obstacles: SMBSC had a sub-par environmental track record, which initially made the environmental community concerned about allowing the plant to participate in a trading program. Negotiations over the environmental improvement component of the trade ratio were difficult.

Web Sites: Minnesota River Basin: http://www.epa.gov/surf2/ahr/30/

Contact: Wayne Anderson, Minnesota Pollution Control Agency (651) 296-7323, wayne.p.anderson@pca.state.mn.us