EMMETSBURG, Iowa (AP) — Iowa’s economic development arm and a shuttered ethanol plant at Emmetsburg that had promised to produce millions of gallons from crop waste have reached a settlement that lets the company off the hook for millions of dollars in tax incentives.
The Iowa Economic Development Authority approved a settlement with Poet DSM Advanced Biofuels last week, ending a contract of incentives that helped enable construction of the massive plant, the Des Moines Register reported. The plant, which opened in 2014, was billed as an ultra-green bio-fuel producer that used corncobs, husks and stalks instead of corn to make ethanol.
Poet, the nation’s largest ethanol producer, idled the plant in July and laid off 52 workers this year. The company blamed the closure on federal actions that decreased ethanol demand and an overall drop in fuel use during the coronavirus pandemic.
The federal government provided $100 million for the plant and the state of Iowa kicked in about $20 million through grants, forgivable loans, sales tax refunds and tax credits. To receive the full amount, Poet needed to retain 35 employees at the Emmetsburg plant through 2024.
As part of the settlement, Poet will not get $2.5 million in tax credits it had not yet earned, but the Economic Development Authority will not seek to be repaid the benefits that Poet already received.