Innovations in Energy Solutions: Renewable Natural Gas - Anaerobic Digestion of Dairy & Swine Manure

As industries take stock of their carbon footprint and look at ways to reduce their greenhouse gas impacts, one of the first questions that is often asked is ‘how can we reduce our energy consumption’? What is a viable alternative to fossil-based fuels? Renewable fuels produced from dairy and swine manure might just be the answer. Under the AB 32 Scoping Plan, the California Air Resources Board (CARB) identified the low carbon fuel standard (LCFS) as one of the nine discrete early action measures to reduce California's greenhouse gas (GHG) emissions that cause climate change through the incentivization of renewable fuels production (one of the many measures). In this fourth installment of Innovations in Energy Solutions, we look at some of the pertinent and practical aspects of producing renewable natural gas (RNG) from dairy and swine manure.


Q: What does the anaerobic digestion process entail? Anaerobic digestion describes the process whereby microorganism break down the organic material in the waste in the absence of oxygen to generate biogas, which is comprised mostly of methane and carbon dioxide. Methane is the primary component of natural gas hence the production of usable renewable natural gas from the process of anaerobically digesting waste product. The biogas from dairy and swine manure requires a process called upgrading in which the carbon dioxide and siloxanes are removed, and the biomethane is then compressed and injected into the natural gas pipeline.


Q: How is RNG monetized within the LCFS regulation? RNG produced from the anaerobic digestion of dairy and/or swine manure is one of the many credit-generating opportunities within the LCFS program. RNG is monetized based on the carbon intensity (CI) of the RNG produced and its ability to displace fossil-based fuel in the transportation sector in California. The general idea is to ‘lower’ the CI of the pathway by optimizing the RNG production process. In most cases, this is driven by the methane emissions avoided due to the use of RNG in place of fossil-based fuel.


Q: My dairy farm is in Wisconsin; can I participate in the LCFS program? Yes! The process of generating the biogas and upgrading it to RNG does not have to be physically located in California. Your dairy and upgrading facility can be located in Wisconsin or Iowa; all that is required is injecting the RNG into the North American natural gas pipeline and for the environmental attributes of the injected RNG to be associated with an end user within the transportation sector in California. Regulators term this the ‘book and claim’ accounting and it is widely used in many LCFS credit generating projects.


Q: Are there any other opportunities besides the CA LCFS market? Indeed, there is! Oregon has a similar program to CA’s LCFS program, called the Clean Fuels Program (CFP). CFP credits are currently traded at about $120 to $140 per MT CO2e relative to CA’s LCFS credits which are in the $170 to $200 MT CO2e range. Washington is unveiling a similar program which will commence in 2023; New Mexico and Minnesota are looking into similar renewable fuels programs for their transportation sectors. In other words, the market demand for RNG is expected to increase as more states decide to incentivize the use of renewable fuels as part of their climate action strategies. Now is the best time to get involved in the world of renewable fuels production!


If you would like to learn more about our services in this area, contact Irra Core at icore@algcorp.com or at (805) 764-6006.

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