Purpose
Anaerobic digesters are an established technology for reducing methane emissions from livestock manure. In recent years, the rapid expansion of renewable natural gas (RNG) projects, driven by economic incentives such as Renewable Identification Number (RIN) credits, Low Carbon Fuel Standard (LCFS) credits, and Investment Tax Credits (ITC) from the 2022 Inflation Reduction Act, has spurred significant growth in RNG production. These incentives, while promoting the adoption of anaerobic digestion, may only sometimes be the most cost-effective way to achieve meaningful carbon reductions within the livestock sector. RNG production, electricity generation via biogas, and flaring biogas all mitigate agricultural greenhouse gas (sometimes referred to as carbon dioxide equivalence or CO2e) emissions from manure. Nonetheless, electric generators are significantly cheaper than the biogas upgrading systems necessary for RNG production, and flares are significantly cheaper than electric generators.
Our analysis compares system costs and emissions reductions, and investigates the societal benefit featured by each system. The only revenue we analyze is RNG sales and electricity sales; we do not incorporate carbon credits into the revenue stream. Flaring biogas, or the process of burning the methane within biogas to produce the lesser potent greenhouse gas, CO2, greatly reduces agricultural CO2e emissions, though this process does not generate usable renewable energy. Electricity generation via biogas is cheaper than RNG production via biogas, but electricity can be sustainably generated with more efficient methods, such as wind turbines and solar panels. RNG is primarily created via anerobic digestion; additionally, RNG is the leading renewable replacement for conventional natural gas, a fossil fuel with increasing use, traveling within 3,000,000 miles of pipelines in the U.S. Nonetheless, RNG remains an expensive and technically complex process, requiring high capital investment and persistent, local, and skilled labor for effective operation.
What Did We Do?
This study compares the economic and carbon reduction potential of various anaerobic digestion biogas uses, including RNG production, electricity generation, and flaring. By evaluating the carbon savings and cost-effectiveness of these options, the study provides policymakers insights on optimizing public funding and incentives for the livestock industry. Furthermore, we provide livestock farmers with a decision support tool that balances the environmental benefits of anaerobic digestion with the most efficient use of financial resources to foster clean and sustainable livestock production system.
What Have We Learned?
Table 1 summarizes dollars per megagram (MG) of CO2e mitigated via RNG production, electricity production via biogas, and flaring biogas for both covered manure storages and constructed anaerobic digesters. Five scenarios were compared for farms featuring dairy cows, swine with lagoon manure storages, and swine with deep pit manure storages to analyze the carbon credit value (units of dollars per MG of CO2e mitigated) necessary to financially break even on the project. Flaring biogas featured the lowest necessary break-even carbon credit for dairy, swine farms with lagoon manure storage, and swine farms with deep pit manure storages. If a farmer wants to generate power, then generating electricity requires a lesser carbon credit value per MG CO2e mitigated compared to RNG generation. If a farmer wants to generate power via RNG, and carbon credits exist in units of dollars per energy, then a dairy farmer would be more profitable with a digester, whereas a swine farmer would be more profitable with a covered manure storage.
If a governing body is interested in maximizing its livestock manure CO2e reduction given a set amount of tax dollars, then the governing body may be most interested in incentivizing flaring systems. If a governing body is interested in both power generation via livestock manure and CO2e reduction, then the governing body may be most interested in incentivizing electricity generation. Nonetheless, renewable electricity can be generated more efficiently by a variety of methods, whereas RNG is the most prominent fossil natural gas replacement and primarily created via anaerobic digestion. Furthermore, as the electric grid “greens”, or as the CO2e emissions associated with grid electricity decrease, RNG generation will provide an overall greater percent CO2e reduction.
Deep pit swine farms generating electricity or RNG demonstrated CO2e reduction that was greater than 100%. Deep pit swine farms have less emissions than lagoon swine farms. By converting a deep pit swine farm to an outdoor covered manure storage or digester system, methane production increases, though that methane is now used for renewable energy generation, thereby offsetting fossil energy generation.
| Head | Dairy: 2,000 | Swine – Lagoon: 14,000 | Swine – Deep Pit: 14,000 | ||
|---|---|---|---|---|---|
| Baseline CO2e (MG/yr) | 10,654 | 10,179 | 3,980 | ||
| Covered Storage | Flaring | CO2e Mitigated (MG/yr) | 8,786 | 8,786 | 3,424 |
| % CO2e Reduction | 82% | 86% | 86% | ||
| $/yr Profit (10-year life) | ($84,137) | ($108,151) | ($342,975) | ||
| Break-Even ($/MG CO2e Mitigated) Carbon Credit | $10 | $12 | $100 | ||
| Covered Storage | Electricity | CO2e Mitigated (MG/yr) | 9,734 | 9,735 | 4,373 |
| % CO2e Reduction | 91% | 96% | 110% | ||
| $/yr Profit (10-year life) | ($178,978) | ($202,992) | ($437,816) | ||
| Break-Even ($/MG CO2e Mitigated) Carbon Credit | $18 | $21 | $100 | ||
| Break-Even ($/kWh) Carbon Credit | $0.08 | $0.09 | $0.20 | ||
| Covered Storage | RNG | CO2e Mitigated (MG/yr) | 9,913 | 9,914 | 4,552 |
| % CO2e Reduction | 93% | 97% | 114% | ||
| $/yr Profit (10-year life) | ($780,801) | ($795,726) | ($1,030,551) | ||
| Break-Even ($/MG CO2e Mitigated) Carbon Credit | $79 | $80 | $226 | ||
| Break-Even ($/MMBTU) Carbon Credit | $46 | $47 | $61 | ||
| Digester | Electricity | CO2e Mitigated (MG/yr) | 10,042 | 9,826 | 4,464 |
| % CO2e Reduction | 94% | 97% | 112% | ||
| $/yr Profit (10-year life) | ($557,022) | ($519,566) | ($754,390) | ||
| Break-Even ($/MG CO2e Mitigated) Carbon Credit | $55 | $53 | $169 | ||
| Break-Even ($/kWh) Carbon Credit | $0.14 | $0.19 | $0.27 | ||
| Digester | RNG | CO2e Mitigated (MG/yr) | 10,169 | 9,904 | 4,542 |
| % CO2e Reduction | 95% | 97% | 114% | ||
| $/yr Profit (10-year life) | ($1,207,287) | ($1,056,809) | ($1,291,633) | ||
| Break-Even ($/MG CO2e Mitigated) Carbon Credit | $119 | $107 | $284 | ||
| Break-Even ($/MMBTU) Carbon Credit | $39 | $50 | $62 |
Future Plans
The project life of biogas upgrading equipment, pipeline interconnects, electric generators, and flares are not always the same. We intend to further investigate the project lives of different equipment to calculate more accurate annualized costs and payback periods. Furthermore, we will analyze how the economies of scale compare between biogas upgrading equipment, electric generators, and flares by evaluating costs of equipment necessary for various farm sizes. Lastly, we would like to further define and quantify the overall societal impact created by RNG production, electricity production via biogas, and flaring biogas.
Authors
Presenting author
Luke Soko, Graduate Student, Iowa State University
Corresponding author
Dan Andersen, Associate Professor, Iowa State University, dsa@iastate.edu
The authors are solely responsible for the content of these proceedings. The technical information does not necessarily reflect the official position of the sponsoring agencies or institutions represented by planning committee members, and inclusion and distribution herein does not constitute an endorsement of views expressed by the same. Printed materials included herein are not refereed publications. Citations should appear as follows. EXAMPLE: Authors. 2025. Title of presentation. Waste to Worth. Boise, ID. April 7-11, 2025. URL of this page. Accessed on: today’s date.
