Dairies and RNG projects
Image: Clean Energy Fuels
A new renewable natural gas (RNG) facility sits on a 5,000-cow dairy farm in South Dakota in the US, and is forecast to produce one million gallons annually of negative carbon-intensity RNG. The project from Clean Energy Fuels at Tri-Cross Dairy in Viborg, South Dakota helps to provide clean fuel for the transportation market at the company’s network of fueling stations across North America.
The construction costs of the RNG production facility, which includes the build of digesters and processing plant, totaled US$34 million (€31.5 million) and was completed in December 2023. The injecting of RNG began shortly after completion. Clean Energy is in process of filing the necessary applications to generate federal and state environmental credits.
Financing for the Tri-Cross Dairy project is backed by one of Clean Energy’s RNG production joint ventures and developed by Dynamic Renewables. The facility is one in a series of projects in the Midwest for which the companies have partnered together.
Clay Corbus, senior vice president for renewables, spoke with Dairy Industries International about the project and the firm’s plans for the future.
What drivers are you seeing in the RNG projects for the dairy sector?
These projects offer dairy farmers an opportunity to turn their waste into a valuable resource while reducing their environmental footprint and generating additional revenue streams.
Dairy farmers and owners are generally “price takers” often affected by a global pricing and demand, so it makes a lot of sense for them to seek to stabilize their income from an area that is already a part of their operations.
Aside from providing a hardworking business that is run 24-hours a day, 7-days a week with additional revenue, these projects help offset the costs of cleaning up manure, recapturing water for use in growing dairy crops as well as dry bedding for the cows. All while simultaneously solving the very difficult issue of fugitive methane escaping into the atmosphere.
What are the key challenges to installing a system for dairy?
RNG facilities are not inexpensive to build. Depending on the size of dairy and number of cows, a digester and the other components can cost anywhere from US$25 million to $100 million. Every farm is different, and items such as bedding, current manure handling practices, seasonal temperature swings, distances to natural gas pipelines and so on can have a big impact on the feasibility of a project. Then there’s logistical and technical complexities around the design and construction to consider. Lastly, there are regulatory hurdles that need to be navigated to ensure the RNG produced can be monetizsd via environmental credit systems at the federal and state level.
This is why dairy owners need to partner with companies that are well capitalised, have experience in building large projects, and know their way around the regulatory framework.
Where are you seeing the most growth for this, geographically?
We’re really seeing it all over the US. It’s generally easier to make a project work for larger dairies since they have more cows and hence more manure, but we can also gather a cluster of smaller dairies together to arrive at the same result. Clustering just makes it a little more complicated and logistically challenging. Clean Energy has just completed several projects at dairies in the upper-Midwest in South Dakota and Iowa. We also have projects going on in Texas and our largest project is at a dairy in Idaho. Once the industry matures and costs come down, you’ll see smaller dairies begin to participate more.
How has the American market changed for this and why?
Growing awareness of the environmental benefits of renewable energy have expanded past the traditional sources like solar and wind. The reoccurring nature of fugitive methane emissions at dairies and other agriculture facilities made perfect sense to capture and put to good use.
Once government agencies began to implement environmental credit programs to incentivise capturing methane emissions, which are processed and cleaned up to create RNG, and then transported via the existing natural gas pipeline infrastructure to heavy duty truck fueling stations across the country, the trend accelerated.
Today, some of the largest transit agencies like those in New York City and Los Angeles are operating their fleets of buses on RNG. Most of the waste collection industry uses RNG to operate their collection trucks. And now more logistics companies such as UPS and Amazon are running their heavy-duty truck fleets on RNG. If that RNG comes from dairies, these vehicles receive a negative carbon intensity score, which makes them cleaner than if they operated on electricity or any other alternative.
Where do you see renewables going next? Why?
The beauty of RNG is that it is a solution that is working today – not in the future – and can be used directly as a fuel for vehicles. It’s really the only solution to decarbonize heavy-duty transportation today. Technically it can be the feedstock for other alternatives like electric and hydrogen fuel cells, although currently the largest carbon credit incentives still come from RNG going directly into vehicles. Regardless of the incentives, if electricity or hydrogen is made with RNG, then it is even cleaner than if it is produced from solar or wind because it stops methane from entering the atmosphere and it displaces diesel. If we see changes in the regulatory markets, we could see RNG going into these other markets.
We anticipate 2024 to be a pivotal year in the demand for RNG fuel in the transportation market with the introduction of Cummins’ X15N natural gas engine for heavy-duty trucks. Clean Energy’s fueling infrastructure is expanding to meet that demand and we’ll need a constant source of additional low-carbon RNG to supply those stations. The new production facilities at Tri-Cross Dairy and the other farms in the Midwest that are now producing RNG is a critical component to our strategy.
What has been the biggest system installed?
The size of the dairies that we have partnered with so far has been approximately 6,000 to 9,000 cows. But we are currently building a RNG project at one of the largest dairies in the US and there are others out there on farms that have between 30-40,000 cows. Projects of this size can produce between four to five million gallons of clean fuel every year.
