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EPA fines Catalytic over reporting glitch

By   /   Wednesday, November 26th, 2008  /   Comments Off on EPA fines Catalytic over reporting glitch

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Oxnard-based Catalytic Solutions has been fined nearly $17,000 for failing to report details of its nitrate releases.

The U.S. Environmental Protection Agency levied the fine after Catalytic Solutions reported the violation. The company said it had cooperated with the agency on clearing up the reporting problem.

The agency said Catalytic Solutions processed more than 120,000 pounds of nitrate compounds in 2005 and 2006 but failed to report how much of those chemicals entered the environment during processing.

Catalytic Solutions makes advanced catalytic converters for automobiles. It has won contracts with major players such as Honda and recently gained new customers in the auto and industrial sectors. The company, which is traded on the Alternative Investment Market of the London Stock Exchange, had revenue of $42 million in fiscal year 2007.

The EPA said it became aware of the violations because Catalytic Solutions self-reported its mistake to regulators.

“We’re in the emissions reduction business, so for us, we feel pretty stupid for missing that,” Charles Call, chief executive of Catalytic Solutions, said in an interview with the Business Times. “I wish I could tell you it was something other than an honest mistake, but that’s what it was.”

Call said the company reported its error as soon as it was discovered.

“We’ve been very, very consistent in meeting legal requirements and working to exceed them, but we discovered in reviewing our normal reporting requirements that we had missed these nitrate compounds,” Call said. “We immediately did what we should do, which was to let the EPA know what happened.”

Call said that federal regulators worked with the company to reduce the fine to the statutory minimum. In an interview, Carol Bussey, assistant regional counsel with the EPA, confirmed that Catalytic Solution’s fine had been reduced, though she couldn’t say how high the penalty could have been.

“We certainly do like to recognize when people tell us that they violated,” Bussey said. “Depending on the circumstances of the self reporting, the company can get a substantial mitigation for self-reporting.”

In recent years, Catalytic Solutions has forged ahead with large contracts and expansion plans.

The company has supplied more than 8 million parts since it was founded in 1996. Catalytic Solutions’ technology lets the company use smaller amounts of precious metals such as platinum and palladium, which drive up the cost of catalytic converters.

Earlier this year, it started supplying catalytic converters to French automaker Renault. In July, the company began construction on a manufacturing plant in the Czech Republic to supply Renault and position itself for business with other potential European customers.

The company also supplied catalytic converters in some big-name automobiles for the U.S. market, including the 2008 models of the Honda Accord and Acura TSX.

At the same time, the company has been expanding a business line acquired in 2006 that reduces emissions from industrial heaters used in refineries. It has won contracts with Flying J, Foster Wheeler and others.

Call said negotiations with regulators turned out as well as could have been expected.

“We weren’t happy with ourselves that we missed [the nitrate reporting], but we were pleased with the EPA’s response,” Call said.

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