The anaerobic co-digestion of dairy manure and food waste can provide significant methane emission reduction by avoiding emissions from both the long-term slurry storage of raw manure and the landfilling of organics, while additionally producing a renewable fuel that can replace fossil fuel sources. The climate benefit of co-digestion may be substantial and an important component in achieving the U.S. Dairy Net Zero Initiative goal of greenhouse gas neutrality by 2050; however, the economic feasibility of these capital-intensive projects has limited their development in the past.
Two scenarios of applying co-digestion on a 1,860-lactating-cow-equivalent dairy farm located in northern New York were analyzed to evaluate their economic feasibility. Scenario 1 considered utilizing a farm’s existing anaerobic digester to electricity generation system and adding a local source of cheese whey at 20% by volume with the farm’s manure. Scenario 2 evaluated the economic feasibility of constructing a new anaerobic digester to renewable natural gas (RNG) system capable of taking in 50% by volume of food manufacturing waste with the dairy farm’s manure (Figure 1).
Both scenarios were found to be economically feasible with a good return on investment. Scenario 1 relies on the tipping fee revenue that is estimated to come from accepting the cheese whey and avoiding large capital cost by using the adequate capacity of the existing digester and engine-generator set. Scenario 2 benefits from capturing the investment tax credit for anaerobic digester and biogas upgrading equipment that was established under the U.S. Inflation Reduction Act, as well as strong revenue from both tipping fees and the large volume of RNG produced that relies on third-party sale in the voluntary market.
Each case study scenario began with finding and selecting the food waste to add to the anaerobic digester. For both scenarios, food and beverage manufacturer unpackaged wastes were chosen to avoid the need for expensive pre-processing equipment such as a de-packager or contamination separation systems. Scenario 1 included a new access road with truck scales and a reception pit to accept the average input of 8,700 gallons per day of cheese whey. An additional in-ground long-term storage of 2 million gallons was also needed to accommodate the increased volume of digested effluent (digestate), and the associated cost to haul and spread that digestate on the farm’s acreage. A small benefit to the farm was not having to purchase fertilizer for 460 acres.
Scenario 2 considered the addition of cheese whey, meat processing waste and bakery waste set equal in total to the farm’s manure at 31,300 gallons per day, on average. Two reception tanks would be needed to manage the higher volume of food waste coming in, which would then flow to a maceration system to grind the higher solids content prior to pumping into the digester. The cost of the complete mix, mesophilic anaerobic digester with heating system was estimated at $4.5 million. The biogas cleaning and upgrading to RNG system was estimated at $2.5 million, assuming membrane technology for carbon dioxide removal. An additional $1 million was estimated for the injection of the produced RNG to the utility natural gas pipeline that is adjacent to the dairy. The total investment for Scenario 2 was $8.85 million and the raw biogas generation was estimated as 648 cubic feet per minute. The additional volume to the farm’s existing manure from the digester effluent would require new long-term storage capacity of 8.6 million gallons and 3,100 acres of additional land to spread the additional nutrient on in compliance with a nutrient management plan.
The daily and annual impacts of the digester operation, biogas production, and digestate storage and land application were calculated using the Cornell manure-based Anaerobic Digester Simulation tool, developed by Cornell Pro-Dairy Dairy Environmental Systems Program, along with supporting spreadsheet models. Capital costs for implementing each scenario were estimated, and annual operating costs and benefits were estimated or calculated. The net present value (NPV) and discounted benefit-to-cost ratio were calculated for each scenario under different term lengths and at an 8% discount rate. Written case studies are available on the Cornell Pro-Dairy website.
Evaluated over a five-year term, Scenario 1 gave a positive NPV with a benefit-to-cost ratio of just over 1, making it a good investment based on key conditions.
These conditions were:
- The existing digester had enough capacity to accept food waste with manure while keeping the hydraulic retention time at or above 25 days.
- The existing biogas handling and engine-generator set could accept the roughly 10% more biogas generated from the cheese whey.
- The farm’s utility interconnect agreement was high enough to accommodate 99% of the electricity generation potential of the co-digestion system.
- Contracts for the food waste and tipping fee could be secured without interruption over the five-year term.
Scenario 2 provided an even stronger return on the nearly $9 million investment with an NPV of $19.9 million over a 15-year term and a discounted benefit-to-cost ratio of 2.1 (Table 1).
The investment tax credit was significant in achieving a short payback
period. Annual operating costs were estimated to be around $1 million.
Operating costs considered included the system electricity usage cost,
food waste contract management, system operation and maintenance costs,
and the cost of land applying the additional volume of the digested food
waste with the manure. Revenue was nearly evenly split between tipping
fees, amounting to an estimated $1.93 million per year for the food
waste and RNG sales amounting to $1.85 million per year, assuming
voluntary market sale at $10 per million British thermal units (Btu).
The food wastes with manure co-digested in Scenario 2 produced an
estimated six times the amount of biogas energy as the manure digestion
alone, resulting in a high volume of RNG available for sale. Although
long-term contracts of food waste may be difficult to get and prices for
equipment, energy and nutrients are changeable, co-digestion is an
option that should be explored. Society’s desire to remove organics from
landfills and the potential for higher prices for renewable energy will
encourage more farms to consider these opportunities.
Grant funding for the project was provided by the farmer-driven Northern New York Agricultural Development Program, a research and technical assistance program serving the diverse agricultural sectors in Clinton, Essex, Franklin, Jefferson, Lewis and St. Lawrence counties.