MILLTOWN, Ind. (AP) — The developers of a proposed $90 million biomass power plant in southern Indiana say it would release hundreds of tons of nitrogen oxide and carbon dioxide, as well as some hazardous air pollutants by burning wood waste to generate electricity.

Liberty Green Renewables LLC estimates in its state air permit application that the southern Indiana plant would release 245 tons of nitrogen oxide and 226 tons of carbon dioxide a year.

In addition, the project about 30 miles northwest of Louisville, Ky., would also produce more than 11 tons of chemicals listed as hazardous air pollutants, the application states.

Liberty's permit application begins a monthslong review process by state regulators, although the company still must submit water-quality applications with the state and the Army Corps of Engineers.

The 32-megawatt Milltown operation is one of several Liberty expects to develop in the Midwest. The plant would burn wood waste from sawmills, furniture factories, land clearing and some switch grass and corn stover to generate power.

But nearby residents, environmental activists and others have raised concerns about how the plant would affect local air and water pollution.

The Crawford County commissioners voted unanimously this spring to ask federal authorities to conduct a full environmental impact study of the project.

Liberty's goal is to obtain a state air permit in early 2010 and to fire up the burners by 2011. The state has 120 days from the submission to issue a permit.

In the next few months, the Indiana Department of Environmental Management's staff will write a permit setting out the details of the project, including emissions limits.

Once that is published, residents and local officials can request a public hearing.

Mark Woods, a member of the Concerned Citizens of Crawford County, said the group "will be requesting a public hearing and we will be asking that it be here" and not in Indianapolis.

Tim Maloney, senior policy director with the Hoosier Environmental Council, said he had serious questions about the plant's location, less than a mile from the Blue River and amid terrain with underlying caves and streams.

"The Blue River has some of the best water quality and biological diversity of any stream in the state of Indiana. That kind of setting and natural diversity is very unusual" and must be protected, Maloney said.

Liberty estimates levels of each type of air emission would be below a key threshold for air pollution — 250 tons a year. That would avoid classifying the plant as a "major source" of pollution and subjecting it to a more involved review process.

IDEM spokesman Rob Elstro said the agency will evaluate the emission estimates and air-pollution control equipment Liberty plans to use to calculate how they would affect air quality.

Lanesville businessman Larry Ott said he and the project's other partners are weighing several water-quality plan options and can't predict when a permit application would be ready.

But he said the air permit application supports the partners' assertions that they intend to create a "clean" energy project. "This is considered a 'minor source' as emissions go, so it's clean," Ott said.