More good news unfolded for the biogas industry in Washington, D.C. last week as the House of Representatives’ answered the Senate’s Agriculture Environmental Stewardship Act with a new companion bill (H.R.2853) to help streamline passage.
Just like the Senate bill (S.988), the House bill would extend much-needed Investment Tax Credits (ITC’s) to biogas businesses and technologies through 2021. Of note: verbiage in the House bill is essentially the same as in the Senate bill.
Anaerobic digester builders, operators, and manure resource recovery initiatives could all apply. If passed, the bills together would provide a 30% tax credit for those biogas endeavors that qualify, aiding them with their upfront capital costs, which are often millions of dollars.
Patrick Serfass, Executive Director of the American Biogas Council (ABC), also expressed his praise. “We thank Congressmen Reed, Kind and the other co-sponsors of this bill for recognizing the far-reaching benefits of sustainable farming where organic material and nutrients should be recycled to create beneficial soil products, baseload renewable energy and jobs,” he said in the ABC’s official press release.
Hand in hand, both bills will together create better incentives for innovators and farmers in pursuit of successful biogas installations. Without these incentives, progress in biogas could very well flounder.
President and CEO of the National Milk Producers Federation Jim Mulhern added: “By creating incentives to make biogas and manure resource recovery technologies more affordable, the Agricultural Environmental Stewardship Act will encourage more widespread use of manure digesters.
“This benefits society by decreasing nutrient runoff in waterways, decreasing farm odors, and improving water quality.”
Regenis would like to applaud House Representative Ron Kind (D-WI) and Tom Reed (R-NY) for sponsoring the bill, as well as our home state members of Congress, Representatives Susan DelBene (D-WA), and Dan Newhouse (R-WA) for co-sponsoring its introduction. “These bills signify a largely bi-partisan effort and hopeful movement towards cleaner air, cleaner water, and cleaner energy throughout the country from the agricultural world,” said company Vice President, Bryan VanLoo.
How does biogas create clean air, clean water, and clean energy? The ultimate goal of the biogas industry: to create clean, renewable energy from harmful greenhouse gas waste emissions produced by dairy agriculture in the country.
Methane—largely emitted by agricultural cattle and dairy livestock—makes up a hefty helping of greenhouse gases contributing to global climate change today. It is also 84 times more potent in its atmosphere-warming impacts than carbon dioxide (CO₂) according to the Environmental Defense Fund (EDF).
Anaerobic dairy digester biogas technology traps methane, transports it to a facility, and processes it into natural gas renewable energy and fertilizer. Further, these systems assist with the processing of dairy manure—also responsible for methane emissions—into more bioavailable forms for use as agricultural fertilizer.
Nutrients are also more successfully separated from raw manure material in this process, ensuring that a glut of nutrients avoids groundwater or waterways. Buildup of nutrients from overfertilization has been shown to be harmful to local ecosystems, including humans and wildlife alike.
It’s been said many times that Washington, D.C. is full of hot air. Last week, though, a group of biogas industry leaders including our own Director of Research and Technology, Dr. Craig Frear, was in the nation’s capital to meet with lawmakers and to demonstrate how an endless supply of hot emissions (from cows, not politicians) can be captured and turned into one of America’s cleanest sources of baseload energy—renewable natural gas.
“While most methane captured from anaerobic digesters is used to generate electricity, it’s becoming more viable to turn that biogas into renewable natural gas (RNG), which can be pumped into our existing natural gas infrastructure to reduce the nation’s carbon emissions even further,” Frear said.
That was the takeaway message at the RNG Forum hosted by the Coalition for Renewable Natural Gas and the American Biogas Council, which included biogas industry members and government agencies overseeing energy and agricultural policies at the federal level. An overflow crowd attended the half-day event, attesting to the growing importance of RNG within the biogas sector.
Following the conference, Frear–as part of a delegation of Board of Directors of the American Biogas Council—spent two days on Capitol Hill sharing that message with the new administration as well as over 20 members of Congress and their policy staffs as part of a primer on how federal policy is integral to the success of the biogas industry.
“Congress, along with the Environmental Protection Agency (EPA) will be making some key decisions over the next few months,” Frear said, “and stability is critical for the industry right now.”
Frear cited protecting the already enacted Renewable Fuel Standard from major changes as well as the Renewable Identification Number (RIN) pathway, which allows biofuels to be tracked from production to trading as keys for the industry during the 115th Congress.
One change Frear did say he would like to see happen before the next Congress is seated in 2019 is an extension of the Investment Tax Credit so private investors can take advantage of the biogas to RNG production opportunities much in the same way other clean energy technologies like wind and solar energy development are encouraged through the federal tax code.
“Every electron created in the biogas sector is one less electron that has to be generated from dirty fossil fuels,” Frear said. “We know this is the future of energy production in the United States, and we want biogas to be recognized as an equally important fuel source because it doesn’t require the sun to shine or the wind to blow to keep the lights on. Additionally, its flexibility to be used as either electricity on the transmission grid or clean natural gas delivered through pipelines translates into greater energy security for our nation,” Frear said.
After several weeks of deliberation, the California Department of Food and Agriculture’s (CDFA) Dairy Digester Research and Development Program (DDRDP) has reopened its request for applications to its dairy digester grant program.
The request more-or-less remains exactly the same as the one made in March 2017, with a few small differences. Total funds allotted will still range between $29 and $36 million total, with the $3 million maximum being awarded to each project remaining unchanged.
DIFFERENCES FROM MARCH 2017 REQUEST FOR PROPOSALS
In addition to the $3 million maximum awarded to each possible project, a supplementary $9-$16 million in incentives may be provided through the Alternative Manure Management Program to support non-digester practices that reduce methane emissions from dairy and livestock operations, and further relieve the financial burden of ongoing or new dairy digesters.
According to the request, this incentive has been included to ensure awarding of funds only to the highest-quality projects resulting in accurately verifiable and quantifiably beneficial greenhouse gas emission reductions.
Logically since deliberation has pushed the grant request back by almost a month, the duration terms of the grant have changed. Grant funds cannot be expended before October 1, 2017, or after September 30, 2019—as opposed to before August 1st 2017, or after June 30th 2019, as outlined in the March proposal request.
PROJECTS INELIGIBLE FOR GRANT MONEY
Under the revised rules, neither upgrades to existing digesters nor projects to fund dairy operations that would increase their greenhouse gas emissions overall–even with a digester—will be eligible for grant funding. Additionally, CDFA will not fund any equipment or activities that may receive funding from the California Public Utilities Commission such as interconnection costs.
In an important caveat for potential digester development, the agency said it will allow funds to be used for biogas conditioning and clean-up costs, which could help biogas from dairies meet California cleanliness standards for injection into the state’s gas pipeline system.
New dates for review processes and announcements of award funding have been released. The review process will happen through July and August of 2017 while the announcements for which projects will receive award funding are expected at the end of September 2017.
NEW GREENHOUSE GAS EMISSION REDUCTION CALCULATION REQUIREMENTS
In the March 2017 proposal request, timelines for which applicants must calculate and provide their greenhouse gas emission (GHG) calculations were changed or further outlined and specified:
- Total project emission reductions must be calculated and provided for over the next 10 years, rather than just over one year.
- Projected GHG reduction per unit if energy-corrected milk (ECM) must be calculated for over the next 10 years, which is more specific than in the previous proposal request.
- Projected GHG reduction per dollar of 2017 DDRDP grant money must be calculated for over the next 10 years, which was not specified in the March 2017 grant request.
- Projected GHG reduction per dollar from the total Greenhouse Gas Reduction Fund must be calculated and provided for over the next 10 years, which was also not specified previously.
ADDED LINE-ITEM OF ALLOWABLE COSTS COVERED BY GRANTS
The CDFA also announced that it will allow costs incurred by designing and engineering contractors or consultants, provided that the costs from these contractors/consultants make up at least 5% of the total grant amount requested.
Further, the costs of pipeline interconnection or equipment for purposes of processing biogas to pipelines were made allowable as well.
NEW PERIOD FOR QUESTIONS AND COMMENTS
Questions and comments about the grant proposal request will be released and publicly posted on the DDRDP website with a deadline of June 14, 2017.
New legislation introduced in the Senate could bring good news for the biogas industry, sustainable agriculture, and renewable energy efforts nationwide.
Through the new Agriculture Environmental Stewardship Act of 2017, legislation would renew efforts to appropriate Income Tax Credits (ITC’s) to biogas nutrient recovery systems—namely, biogas agricultural businesses with technologies working to retain organic matter nutrients for protecting groundwater, while slashing carbon emissions.
The same bill was introduced in the Senate last year in 2016, but did not go through.
The Act would represent a bipartisan effort to incentivize better nutrient management around the country, especially for dairy operations and family farms in high dairy-producing regions. Introduced by Senators Sherrod Brown (D-OH) and Pat Roberts (R-KS), it could be the leg up biogas efforts and aspiring anaerobic digester builders need.
Said Patrick Serfass, Executive Director of the American Biogas Council in their recent press release, “When we incentivize sustainable farming that includes recycling of organic material and nutrients, we create beneficial soil products, baseload renewable energy and jobs while protecting our watersheds.”
The goals of the biogas industry are to produce clean energy while reducing methane carbon emissions and nutrient runoff into groundwater. Through use of anaerobic digesters, recycling and processing of manure creates renewable and sellable energy.. The hitch: these digesters need considerable startup to be sustainable and self-funding over the long term.
While many dairy farmers want—or are mandated by law—to do their part cutting down emissions and runoff, most are not able to afford construction of an anaerobic dairy digester, nor are there any incentives to do so yet unlike the generous government benefits fossil fuel companies have received over the last century.
Fortunately with this bill, there is a very real recognition for a need for these incentives in Washington.
Said Serfass, “We thank Senators Brown and Roberts for their strong recognition of the need for clean waterways and more productive soils which contribute to healthier communities and a stronger economy. Biogas and nutrient recovery systems make these goals obtainable and this legislation will help incentivize those technologies.”
The bill would amend and extend the Internal Revenue Code to allow ITC’s for biogas businesses and projects. These ITC’s would be available through 2021 for “qualified gas property” and “qualified manure resource recovery” specifically. This includes anaerobic dairy digesters that capture methane for reuse as fuel, as well as costs from any facilities used or built to process that fuel.
This time around in 2017, we hope the renewed Agricultural Environmental Stewardship Act will pass. This would not just incentivize anaerobic digester construction: it would also create renewable energy, reduce emissions, and lend to a fast-growing industry that could create around 300,000 new jobs.
Said Matt Carr, Executive Director of the Algae Biomass Association, “…the Agriculture Environmental Stewardship Act will help farmers recycle valuable ag nutrients back into their operations and reduce the taxpayer burden of recovering those nutrients downstream. It’s a win-win for everyone.”
A request for grant applications to help fund anaerobic dairy digester projects in California has been delayed until further notice.
The California Department of Food and Agriculture’s (CDFA) Dairy Digester Research and Development Program (DDRDP) received funding from the Greenhouse Gas Reduction Fund in 2016, set to go towards digester grants. These grants would provide financial assistance for dairy digester installations in California, an important part of the state’s efforts to reduce methane emissions from the dairy industry. Digesters would also create clean, renewable energy in the process.
However, dairy, health, air quality, and sustainability-oriented groups – in addition to companies endeavoring to build the digesters themselves – expressed concerns about these grants being feasible or incentivizing enough for digester development to proceed.
The DDRDP released the first draft of their grant application request in February so potential applicants could review and comment on them over a 2-week period. During this time many organizations responded, raising points and critical issues with the way the grants would be awarded and enforced. Among critics were Dairy Cares, the Agricultural Council of California, and the Bioenergy Association of California.
The most articulated points concerned the awarded amounts comparative to the costs – costs applicants must incur to meet the grant’s requirements for awarding in the first place.
Stephen McCorkle, CEO of Agricultural Waste Solutions, Inc., said, “What has been listed for the applicant requirements under this section is immensely time and cost intensive.”
“How are applicants expected to be ‘shovel ready’ within 6 months of the execution of the grant agreement, without any of the pre-development costs covered or latitude provided towards the due diligence needed to keep in-line of [the requirements]?”
Compounding the difficulties with the lack of costly upfront requirements for digester projects that already cost millions of dollars, only 60-70 percent of the initial $50 million from the California’s Greenhouse Gas Reduction Fund (GGRF) allocated to the CDFA was set aside to incentivize digester projects—and now even that amount may be reduced.
Michael Boccadoro, Executive Director of Dairy Cares, said, “This range of $29 to $36 million differs from CDFA’s previously stated intent to provide at least $36 million in funding for digesters.
“The unexplained inclusion of this new range suggests that CDFA is considering providing up to $7 million less funding for digesters than previously proposed,” he added.
Development and construction of anaerobic dairy digesters have slowed to a crawl, despite evidence they are among the most cost effective ways to reduce harmful, short-lived climate pollutants – such as methane – which have a potency up to 80 times the effect of CO2.
Very few digesters have been built in the last 2 years and currently, there are only about a dozen completed in the state of California. This is well short of the roughly 300 digesters that would be required for the state to reduce its greenhouse gases, the amount needed to meet the 2030 goals set out by legislature.
Said Boccadoro, “Much more than the current funding level will be needed to accomplish the state’s goals of a 40 percent reduction of manure methane from the dairy sector.”
Clearly, the DDRDP took these comments to heart, and are using this delay in requests for applications to find a better way forward. It’s fair to say all stakeholders are looking forward to an improved second draft.
Regenis will be attending the 2017 BioCycle East Coast Conference in Baltimore MD, from April 4-7. The annual conference is an opportunity for the organics recycling community and the anaerobic digestion industry, in particular, to commune for discussion of emerging issues and opportunities related to all aspects of organic recycling, recovery and processing. Some key highlights involving Regenis and their representative, Craig Frear, Director of Research and Technology are as follows:
- One-Day Workshop on Odor Management at AD Facilities—as a Board Member of the American Biogas Council (ABC), Dr. Frear has assisted in developing and will be a host for this important workshop on behalf of ABC. Similar to past experiences within the compost industry, the AD industry in now managing projects that are receiving larger fractions of recycled food scraps that at times, enter the facility gates already decomposing. Such practices necessitate an industry-wide focus on best management practices to ensure proper handling and control of this material and their potential odors. National experts have been retained as speakers on such topics as: odor control technologies, management strategies to minimize odors, the science of odors and odor control, case studies at farm and centralized AD facilities, and ways in which to develop proactive odor management outreach programs.
- Business of Biogas Session—Dr. Frear will be the moderator for an expert panel discussing the broader topic of ‘The Business of Biogas’. Speakers include Robin Szmidt of Target Renewables, Tom Drake of Louis Perry Group, and Alan Johnson of Quasar Energy Group. Topics will range from unique opportunities and lessons from the UK, to the varying business perspectives and approaches across farm, food scrap, and water resource recovery (WRRFs) AD facilities, to odor mitigation at municipal and food scrap digesters in the US.
- Additional Biogas Sessions—the main two days of sessions include multiple biogas focused tracks. These include: Farm-scale co-digestion, best management practices with the AD industry, biogas and digestate markets, nutrient management, co-digestion at WRRFs, and opportunities in distributed biogas. Speakers for these break-out sessions are across industry, the regulatory, and scientific communities—each bringing years of experience and real-world application to these important topics.
Regenis is proud to announce groundbreaking new work on uses for anaerobically digested dairy fiber from a consortium of industry-leading scientists, including our Director of Research and Technology, Dr. Craig Frear.
It’s long been known that post-digested dairy fiber could be used as clean source for cow bedding, as a peat moss substitute and as bio-fertilizers, but research from Dr.
Frear and colleagues from Washington State University, Michigan State University and the Universidad de Cuenca, Cuenca, Ecuador, reveals the possibilities of allowing large dairies to become their own de-facto bio-refineries, “harnessing the manure for heat, power, fuel, chemicals, fertilizers, fiber, wood composites, and chars/carbons, while mitigating climate, air, water and human health concerns associated with the manure.”