Biogas Poised to Seize RFS Potential -- While Environmentalists Push to Kill RFS e-RINS Proposal, Biogas Industry Ready to Grow

February 02, 2023

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by Todd Neeley (DTN Progressive Farmer) ... During a recent public hearing, environmentalists expressed concern the new program would lead to a proliferation of new confined animal feeding operations, or CAFOs, as more farmers try to capture the potential value of methane from increased manure production.

Adrian Busby, senior food and climate policy analyst with Friends the Earth, said during the RFS virtual hearing on Jan. 11 that EPA should instead focus on cutting pollution from feedlots and other CAFOs, rather than incentivizing increased livestock production.

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In reality, the e-RINS proposal is more likely to spark a myriad of investments in new biogas plants at existing animal-feeding operations, a biogas industry expert told DTN. Livestock production and a need for more CAFOs to feed more animals is based solely on market supply-and-demand factors.

It is more likely expanded biogas production would come from existing feedstocks such as manure and food waste, which are in much need of management.

Patrick Serfass, executive director of the American Biogas Council, told DTN that environmental groups' beef is not with biogas, per se.

By and large, environmental groups continue to grow and thrive by their organized opposition to large farming operations -- feedlots, dairies, major hog operations and the like.

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There are 2,300 sites producing biogas in the U.S. in all 50 states, according to the American Biogas Council.

Included in the total are 316 on-farm anaerobic digesters, 1,269 wastewater recovery facilities, 66 stand-alone systems that digest food waste, and 652 landfill biogas projects.

BIOGAS POTENTIAL MASSIVE

The potential for biogas production at existing sites is massive, making it highly unlikely there would be an explosion of new CAFO construction like the RFS did for ethanol production in the early 2000s. What's more, biogas production is reducing methane emissions.

The American Biogas Council says there are nearly 15,000 facilities with the potential to produce biogas, including 8,574 dairy, poultry and swine farms, as well as 3,878 wastewater recovery plants -- that includes about 380 locations that already produce biogas that goes unused.

The big potential game-changer for biogas enthusiasts is finding a way to harness food waste, which has an even greater biogas potential than manure. More than 2,000 food scrap-only systems in the U.S. flare biogas at 415 landfills.

RFS BIOGAS OPPORTUNITY

Renewable Natural Gas companies are beginning to seize the opportunity by announcing plans to build $150 million worth of biogas production facilities on existing farms.

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Commercial-size systems range in cost from $1 million to $100 million, Serfass said.

"Most farmers are not going to make an investment if they can't get an ROI (return on investment) of around five years or less. Maybe that's part of why there's 300 systems and 8,500 potential systems. They're farmers first. The fact is no farmer is buying an animal for the amount of manure that they are producing." READ MORE

Brown gold: the great American manure rush begins (The Guardian)

Is Setting National LCFS Feasible? RFA's Cooper Tells Senate Committee Ethanol Has Concerns About eRINs Proposal (DTN Progressive Farmer)

Ethanol touted at U.S. Senate hearing for possible national clean fuels standard (Iowa Capital Dispatch)

Utah senator seeks allies in push to keep EVs out of U.S. biofuel program (Reuters)

Excerpt from The Guardian: But some watchers of the biogas boom worry that monetizing avoided emissions could backfire. Environmental justice and animal welfare groups are campaigning against subsidies for the industry and raising questions about the challenges posed by digester technology. For one, digesters can and do leak. They also only mitigate about half of the methane problem posed by the dairy industry. While digesters capture emissions from manure, they do nothing to resolve the issue of emissions from cow burps, which, in California, produce roughly the same amount of methane emissions as manure.

But the heart of their concerns is the question about whether or not renewable natural gas generated from dairy farms is truly carbon negative. The answer depends on how you tell the story of its production.

Under California’s clean fuels policies, energy producers must reduce the carbon footprint of transportation fuel every year. Where fuels – such as gasoline and diesel – exceed the targets, producers have to buy credits to offset their excess emissions. Producers whose fuels are deemed to have extremely low carbon footprints can generate and sell valuable credits for every ton of emissions they help avoid.

The biggest winner under this system is RNG from dairy farms, which consistently receives not only the lowest carbon footprint scores across all fuel types, but also some of the only negative ones. Carbon-negative fuels are considered to remove greenhouse gases from the atmosphere.

It’s on this flattering grading system that energy producers like Aemetis can earn avoided methane credits for every unit of energy produced from cow manure. The more they produce, the higher the payoffs.

When assigning a carbon footprint to RNG fuel, regulators don’t factor in any of the emissions associated with producing manure in the first place, such as the transport and raising of animals. This is not the case for many other renewable fuels, whose assigned carbon footprints take into account all greenhouse gases released during their production.

This discrepancy is rooted in the assumption that manure is not produced deliberately; it is an inevitable byproduct of the dairy industry. So, the thinking goes, when energy companies intervene to capture methane and convert it into fuel, that process results in a net reduction in emissions.

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Some climate researchers worry that incentives for methane capture have become so generous that they may increase manure production in the long run. Taken to an extreme, some worry dairy farms could end up turning into feces farms that happen to also produce dairy.

Kevin Fingerman, an associate professor on energy and climate at the California State Polytechnic University, Humboldt, published a study in 2022 – commissioned by science advocacy group, Union of Concerned Scientists – that scrutinized the risk of these unintended consequences in California.

He found that revenue from methane capture alone could, in some cases, make up almost 40% of total profits for mid- and large-sized dairy farms in California. When revenue from methane capture begins to eclipse that from dairy production itself, the study warned, it could end up incentivizing farms to increase herd sizes to produce more manure.

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Were California climate regulators to recognize manure as an intentionally produced material, like corn grown for ethanol, then its carbon intensity score would increase significantly to reflect everything from the greenhouse gases involved with producing feed to the emissions released from cow burps.

The California Air Resources Board (Carb), which oversees the state’s clean fuels programs, defended its approach. Dairy digesters are responsible for a significant share of methane emission reductions in the livestock sector, Dave Clegern, public information officer for the agency pointed out. He added: “We do not have any evidence that shows the [policy] is causing a higher amount of manure to be produced in California.” (One reason there may not be any such evidence yet is because the RNG industry is still in the early stages of development.)

At the same time, the agency has indicated an awareness that its subsidies might be overly generous. Last November, it sought feedback on the future of its clean fuel policies, including the possibility of eliminating avoided methane credits for dairy-based RNG by 2040. The suggestion sparked vocal outcry from energy industry representatives, who warned that it would unravel the sector’s progress toward climate targets. In contrast, environmental justice groups welcomed such a phaseout, though some like the Union of Concerned Scientists worried it might be “too little too late”.

The sharply divided response underscored the ongoing tension that arises when climate solutions attempt to balance environmental benefits with industry bottom lines. READ MORE