They say the devil’s in the details, and this is certainly true when it comes to evaluating the impact of lowering GHG emissions on dairy economics. As things stand today, anaerobic digestion of dairy manure has the greatest current impact on dairy GHG emissions, lowering the GHG footprint of large free stall dairies by about 49%.
But how does the dairy profit from this? Well that is highly dependent on who owns the digester and the methane it produces. For decades, most dairy digesters were owned by energy companies and they would own the gas and any energy produced by burning the gas in gensets. The dairy would typically receive half of the solids separated on the digester outflow. This fiber was reportedly pathogen free after passing through the digester. So most dairies with digesters used the fiber for bedding. This saved money over buying straw, or sand or sawdust or other commercial substrates. And the cost benefits could be significant.
This arrangement also worked for dairies since they did not have to manage the digester. They could continue to focus on herd health and milk production. But the fiber typically contained too much moisture, coming off the simple roller press separators at around 80% moisture by weight plus or minus 2%. And since the digestion was never complete, the fiber would begin to heat up after just a few hours due to the actions of certain bacteria. The separated solids contain nutrients, are very moist and heat up. These conditions create an environment highly conducive to bacterial proliferation, including the proliferation of pathogenic bacteria. So while the dairy may be saving money by not having to purchase bedding substrates, if the wet fiber contributes to a mastitis problem, the economic benefit can be quickly extinguished.
The costs of a mastitis outbreak are profound. Infected cows are taken out of production while infected and for two or more weeks after the infection has cleared. Pre-clinical infections reduce milk production and contribute to a higher somatic cell count which can reduce the market value of the milk. And veterinarian and pharmaceutical expenses rise. So the dairy with this problem sells less milk, gets less money for the milk they do sell and their expenses rise. So the benefits of digestion vary widely.
This is where Clean Wave can help. Digested fiber that is dried in our ecoFlash drying does not heat up when placed in the beds. Between the lack of heat development and lower moisture level ( 60% by weight), the fiber should be superior bedding that shouldn’t contribute to higher somatic cell counts.
Getting back to the focus of this blog post, over the last decade a large number of large community digester projects have been developed. And the reason is the California Low Carbon Fuel Standard. Once applied to digester methane, it brought dramatically higher value to the methane. It required cleaning of the gas and injection into natural gas pipelines to take advantage of this opportunity. This is a costly process. The methane might have a market value between $ 3 and $ 10 per decatherm. This is not nearly enough to justify gas cleaning. But for projects that can inject the cleaned methane into natural gas pipelines, two other values become applicable.
Renewable Identification Numbers or RINs are credits applied to certified renewable fuels into the fuel supply. Renewable fuel producers generate credits. These have varied in value over the last decade or so. But to illustrate, I’ll share the rough numbers from a dairy community digester project in Michigan. At the time, the clean gas injected into the natural gas pipeline had a market value of around $5 per decatherm. The RINs at the time were worth about $ 15 per decatherm. In late 2017, RINs peaked at $ 39. The Low Carbon Fuel Standard (LCFS) is another credit applied to low carbon fuels in the national supply. This credit at the time was worth about $ 95 per decatherm. So this project was built around earning $ 115 per decatherm, 23 times the market value of the gas.
Under this scenario, even having a small share of the pie, a dairy would profit handsomely from being part of the right digester project. But this opportunity is not available to all dairies. Community digester projects sometimes truck some of the dairy wastewater long distances. This is only feasible because of the LCFS and RIN values. But through the grapevine, we have heard that there are changes afoot and that digester methane injected into pipelines may lose access to the LCFS. If that happens, then most of the community projects will fail. And given the difference between market value and the inflated LCFS and RIN value it is likely this particular gravy train will have a limited life.
A recent discussion with an associate caused me to look at GHG emissions from a dairy in a different way. He viewed GHG emissions as inefficiencies in the dairy operation. This would include enteric emissions, emissions associated with applying commercial fertilizers, and lagoon emissions. Collectively these are the largest sources of GHG emissions at large indoor dairies. I’ll delve deeper into this topic in the next Blog post. Back to the main topic.
Digesters are not the only method for reducing the GHG footprint of the dairy. But other approaches to reducing GHG emissions may or may not fall under existing Offset Protocols. Without an applicable Offset Protocol, GHG reductions won’t generate tradable credits. So for new processes, like those offered by Clean Wave, these will need to fall under new protocols being developed.
There are natural supplements that reduce enteric emissions significantly and these may fall under an existing Offset Protocol. So you can see, there is plenty of red tape before the dairy or Clean Wave can generate offset credits, except via an existing Offset Protocol. Does this red tape stifle innovation?
What are your thoughts? Is independent 3rd party validation enough or should new technologies have to wait for new protocols that fit their mode of operation?
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