A new venture is beginning to reshape the embattled IronWood Mill property outside Dolores.

IronWood shut down last year, subject to a lawsuit brought by Montezuma County after it left towering piles of wood chips on the property, creating a fire hazard.

The revocation of the mill’s high-impact permit, coupled with losses from pandemic-driven supply chain problems, shut the IronWood mill down permanently.

Now, Palaterra-USA LLC, the American arm of a German company that manufactures soil enrichments called humus, has plans to operate a biochar production facility on the site. Production is scheduled to begin as soon as the end of July.

Originally, Palaterra-USA was moving through the process for obtaining a high-impact permit, but because the land was rezoned as a high industrial property in 2019 to accommodate IronWood, the new venture will not cross any threshold set forth by the county that would require a permit.

Before that determination was made, the Montezuma County Planning and Zoning Commission voted to recommend Palaterra-USA for a high-impact permit June 13.

Biochar is plant-based carbon made from organic materials, including products ordinarily considered waste, like wood from beetle kill or the veneer left over from IronWood’s operation. This material is burned at high temperatures in low-oxygen conditions, a process called pyrolysis, to create a charcoal-like substance that enriches soil and increases moisture retention. Biochar is used in air and water filtration, and cosmetics.

Biochar companies also profit in the market for carbon credits (also called carbon offsets) because their product sequesters carbon.

Rolf Schwenninger, CEO of Palaterra-USA, calls his product revolutionary. His patent for Carbon Lactose Microbe, or enriched biochar, has the potential to replace mineral fertilizers in agricultural use entirely, according to the product’s patent.

Palaterra-USA’s biochar facility seems like a perfect solution in a situation where there is ample wood waste, both leftover from IronWood and from wildfire mitigation efforts by the U.S. Forest Service. But neighbors and community members are protesting the operation. Their concerns begin with the applicants.

Schwenninger has been the subject of cases in several Colorado districts and counties, including a 1992 La Plata County case – brought by Patricia L. Jeckel and Robert E. Wilson – in which he was found to be in default of a $455,000 promissory note to the plaintiffs.

Palaterra-USA is caught up in Schwenninger’s history with the law as well. In 2022, a former business partner filed charges of theft totaling almost $150,000 against Schwenninger. He was cleared of the charges early this year.

“We’re supposed to believe that this man is going to open up a biochar facility, which has huge environmental ramifications if it's not operated correctly and responsibly, and that's the man on the application,” said Lana Kelly, the owner of Circle C RV Park and Campground, which neighbors the property.

Schwenninger called the discussion of these charges “bull----” and stressed that he had been cleared of any wrongdoing in the most recent case against him.

After just three years in business, the specter of the IronWood mill’s failure haunts this new proposal, too.

The land is still owned by Mark Hartman, CFO of the IronWood Group. Wade Bentley, the IronWood plant manager, has been vocally in support of Palaterra-USA’s permit application. After the biochar facility is well established, Bentley hopes to begin manufacturing plywood on the property, so that nothing leaves the operation as waste.

“What we have, in substance, is an application submitted by IronWood, who has already proven to be an irresponsible neighbor,” said Kelly.

She voiced concern about the proximity of the planned biochar kilns to residences and the lack of environmental studies included in Palaterra-USA’s proposal. Environmental studies are not required by Montezuma County.

Bentley waved off the concerns, saying that the neighbors would complain no matter what business appeared on the property. He characterized those speaking out against the plant as habitual nuisances.

Bentley also said he’d attempted to meet with a few of the neighbors to discuss the operation, but had been turned down.

Hartman was quick to acknowledge IronWood’s failures, but he expressed hope in future operations on the property. He also said that he planned to eventually sell the 63 acres to Schwenninger, and pull out of the operation entirely.

The injunction filed by the county in 2022 against the IronWood Group has fined Hartman and Bentley tens of thousands of dollars since June 2023. The actual figure owed to the county is unclear, based on the changes since the mill closed.

In the long run, there are three parties with interest in the venture.

Palaterra-USA is partnered with BioChar Now LLC, a large and quickly expanding biochar producer with proprietary technology in the production of biochar. Palaterra-USA will buy the biochar that BCN produces on the site and enrich it through a fermentation process into a soil additive that helps in moisture retention and crop yields. Eventually, Palaterra-USA will build a more versatile German biochar system as well. Anything other wood waste will be turned over to Bentley to manufacture into plywood.

Hartman, Bentley and Schwenninger also hope to create jobs in the area. In the short term, they expect to employ about 25 locals, but ultimately expect to hire around 300. Palaterra-USA and BCN will both bring in managers with experience in their fields, but every other position is expected to be filled by someone in the community.

Although many scholars are optimistic about biochar, it is still new in the marketplace, and the full economic and environmental impacts of a plant are unclear.

Dr. Catherine Keske, an economist at the University of California Merced who has been involved in biochar research, said the industry could be beneficial for rural economies, but there’s no example of a plant that has grown to the size necessary to have a significant impact.

A Virginia lawsuit, filed against Richmond County for approving a permit for a biochar facility, asserts that the process uses carcinogenic chemicals likely to contaminate the land and water.

Water contamination is a big concern for community members, as the East Lateral irrigation canal runs across the south end of the property. The Montezuma Water Co., which neighbors the IronWood property to the south, declined to comment on the effects of a biochar plant.

Hartman, Bentley and Schwenninger maintain that the operation will be totally free of harmful chemicals, and produce no pollution.

“When there is a revolution that affects agriculture, that affects the plywood business, you cannot expect the average person who is not involved in the processes to understand,” said Schwenninger.

Katie Bishop, a neighbor who opposes the operation, said she was discouraged by the county’s slow response to the community’s complaints about IronWood; she does not believe that the county will mitigate any effects of biochar. She worries about environmental impacts from the plant to her family’s health.

“I just want it to be regulated to where we can enjoy our lives here, because we don't plan on going anywhere,” said Bishop.

This article was updated July 5 to clarify that in 1995, Rolf Schwenninger was found to be in default of a $455,000 promissory note to plaintiffs Patricia L. Jeckel and Robert E. Wilson. No criminal charges were filed.