Farmers install anaerobic digesters for a variety of reasons, including manure management, odor reduction and revenue potential.

Anaerobic digestion involves the breakdown of organic matter in the absence of oxygen. Anaerobic digesters work best with a steady diet of slurry or semi-solid manure. Manure should be relatively “clean” without excess bedding or other solid material.

While there’s money to be saved or made with an on-farm anaerobic digester, ag engineer Dr. Stephanie Herbstritt, Cornell Cooperative Extension, cautioned producers about the substantial financial investment required to build and operate a digester.

Herbstritt listed electricity and renewable natural gas energy markets, renewable energy credits, emerging carbon markets and using byproducts such as soil amendments and recycled heat as potential profit makers. Digesters require technical skills and time to keep them operating smoothly, and thorough research to determine the feasibility of connecting to existing energy infrastructure such as pipelines and power lines. Fluctuating energy markets can also be an issue.

Herbstritt reviewed the process of anaerobic digestion: Feedstock including manure, wastewater, crop biomass or residue and food waste are “fed” to the digester. “Digestion starts with bacterial hydrolysis,” she said. “The bacteria break down carbohydrates into soluble organic molecules.” The result is biogas, which is about 60% methane and the rest carbon dioxide (CO2).

Biogas can be used on the farm, or the methane in biogas can be upgraded to biomethane, also known as renewable natural gas (RNG), and added to existing natural gas. Biogas can also be converted to electricity and used on the farm or sold to the electric grid. The CO2 can be separated, and the pure CO2 stream can be channeled to industrial applications. Digestion also results in solid and liquid byproduct, or digestate, which can be used as a soil amendment.

In general, the easily degradable carbon that comes into the system ends up in biogas and the rest is in the leftover digestate. “The carbon is often more stable than the characteristic of the manure, for example, coming into the system,” she said. “The protein nitrogen in the feedstock coming into the system is generally converted to ammonium, so when we put manure in the system, which has nitrogen and inorganic nitrogen and organic nitrogen, we can end up with more plant-available liquid fertilizer at the end of the process.”

Most farmers who have digesters participate in the electricity marketplace. The methane digester system includes an engine generator (genset) that converts biogas into heat and electricity, which can be sold to electric distribution companies and electric generation suppliers. The digestion process also generates heat, which can be captured in cogeneration power systems. Waste heat can be used on the farm to heat the digester and water or used for space heating. Captured heat also offsets the cost of external energy supplies while generated electricity offsets farm electricity costs and potential additional revenue.

In many states, farmers who produce biogas can sell renewable energy credits. According to the EPA, a renewable portfolio standard (RPS) is a legislative requirement for utilities to generate or sell a certain percentage of their electricity from renewable energy sources.

“Farmers who produce biogas can enter the renewable energy market by selling their renewable energy credits, referred to as ‘alternative energy credits,’ to distributers and suppliers directly through the Generation Attribute Tracking System, or GATS,” said Herbstritt. “Or renewable energy credits can be sold through a trader or aggregator who combine smaller producers and sell their aggregated energy credits.”

Many states are deregulated retail electricity markets served by a regional transmission organization (RTO). Residential electricity customers can choose who generates their electricity and how electricity is generated. “This market allows electricity generated from renewable sources like biogas to compete directly with electricity generated from fossil fuels,” said Herbstritt. “Some electricity from renewable sources is provided along with electricity from fossil fuels. That can help increase demand for renewable energy from biogas.”

Biogas can also generate revenue as a transportation fuel in the form of RNG. Herbstritt explained that biogas can be upgraded to biomethane by removing contaminants, separating CO2 and methane streams, then compressing (liquifying) the methane. “When RNG is produced from a cellulosic feedstock, there are opportunities to generate Renewable Identification Numbers (RIN) under the United States Renewable Fuel Standard,” she said. “This standard was developed by the EPA to increase the volume of renewable fuels used in the U.S.”

According to the EPA, producers of renewable fuels generate RINs, market participants trade RINs and obligated parties obtain and ultimately retire RINs for compliance. Obligated parties include refiners and importers of gasoline or diesel, renewable fuel exporters, renewable fuel producers and registered RIN market participants. Renewable fuels generate RINs that can be traded or sold to companies to help offset greenhouse gas emissions.

One RIN represents the equivalent of one gallon of fuel ethanol. RNGs generated from cellulosic seedstock such as manure, perennial crops or crop residue are classified as D3 RINs. Recently, the value of those credits ranged from around $20/million BTUs to about $35/million BTUs. In 2021, that was approximately 10 times the price of fossil natural gas.

One emerging option for carbon credit markets is for farmers who feed their digester with feedstock such as crop stubble or perennial crops. For such programs, farmers can contract with companies that participate in a voluntary carbon market.

“Currently under these markets, there are companies that will pay producers a price per ton of the carbon estimated to be sequestered by agricultural practices such as a perennial or double cropping system,” said Herbstritt. “Those companies can use credits to offset their greenhouse gas emissions. A farmer can be paid a fee over a number of years for practices such as no-till or double cropping.”

Farmers interested in pursuing on-farm anaerobic digestion should be prepared for extensive research prior to committing to such a system. Planning should be based on animal numbers, volume of manure, current manure handling practices, available feedstock and potential biogas use.

by Sally Colby