EPA proposes $1.1M settlement with Vertellus

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Chemical-maker Vertellus Specialties Inc. will spend up to $1.1 million and change air-emission monitoring practices at
its plant on the southwest side of Indianapolis under a proposed settlement with the U.S. Environmental Protection Agency.

The proposal, filed last week in U.S. District Court in Indianapolis, is the culmination of years of negotiations
between the company and the EPA over alleged Clean Air Act violations.

The settlement proposal calls for a 30-day
period in which the court will allow public comment. The comment period began Friday, Aug. 21.

After a surprise
inspection in 2005, the EPA made 17 different claims about Vertellus’ violations, including improper monitoring procedures,
faulty record-keeping and excessive toxic-air emissions. Many of the problems EPA cited, including a large source of what
EPA calls “hazardous air pollutants,” have already been remedied.

“We immediately began discussing
with them the concerns they raised before they even left the facility,” said John Jones, director of regulatory management
at Vertellus, formerly known as Reilly Industries.

Vertellus admits no wrongdoing and will pay $425,000 to the
government. In addition, the company, which is owned by the Chicago-based private equity firm Wind Point Partners, will spend
$705,000 on equipment upgrades. The upgrades are over and above what environmental regulations require.

Bill Beranek,
president of the Indiana Environmental Institute, said the size of the Vertellus settlement indicates the procedural nature
of the company’s violations.

“I don’t think [EPA is] alleging there was an enormous degree of
harm from this particular plant for this particular thing,” he said.

Beranek, who facilitates meetings between
Wayne Township neighbors and the company, said Vertellus has made great strides in reducing the plant’s noxious odors
and toxic vapors over the years.

Vertellus has multiple factories around the globe and 750 employees. About 300
people work for the company in Indianapolis.

Vertellus uses various volatile and toxic ingredients, including
acetaldehyde and benzene, in making chemicals for sale to agricultural chemical companies. Its customers include Dow AgroSciences
LLC and Syngenta AG.

Most of the issues that EPA cited related to the monitoring of dozens of valves, pumps and
connectors at the plant. While the EPA did not necessarily find vapor leaks, Vertellus’ methods to detect them weren’t
adequate, the agency said.

EPA found that one Vertellus plant, which uses cyanide and benzene as main ingredients,
was emitting more than 25 tons of “hazardous air pollutants” per year. In 2007, the company capped the offending
vent with an incinerator.

Jones said the new incinerator removes 99.8 percent of toxins, exceeding the EPA requirement
of 98 percent.

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