By Bill Hagy, Lee Enterprises Consulting, Inc.
Special to The Digest
One of President Biden’s Clean Energy initiatives includes partnering with farmers, ranchers and businesses engaged in livestock production to implement environmentally sound agriculture practices and deploy methane digesters that generate new sources of energy and revenue.
Agriculture producers and businesses engaged in the livestock industry are facing methane emissions remediation issues that impact the future economic viability of the industry. Agriculture producers include individuals or entities directly engaged in the agriculture products and businesses including private for-profit entities, cooperatives, electric utilities, and Tribal corporations/businesses. The addition of an anaerobic digestion system may not only satisfactorily remediate the issue but provide another source of income to the producer or business.
Anaerobic digesters convert livestock waste into value added renewable energy including renewable natural gas (RNG), electricity, or combined heat and power (CHP) and value-added products such as fertilizers, compost, biochar, and bedding materials.
Only 263 of the projected 8,000 large dairy and hog operations where biogas recovery systems are technically feasible have been constructed. While these are technically feasible, financial feasibility would need to be determined on an individual basis. There is a huge potential for the expansion of this market! USDA provides resources to assist smaller livestock (dairy, hog, chicken, beef) operations to form associations/cooperatives that would provide sufficient volume for a technically and financially feasible digester operation. (Information provided from AgSTAR publication)
There are numerous federal programs and resources available to assist agriculture producers and businesses to determine the feasibility for and construction of anaerobic digesters. More on that here.
AgSTAR is a collaborative program sponsored by EPA and USDA that promotes the use of biogas recovery systems to reduce methane emissions from livestock waste. Biogas recovery also helps achieve other social, environmental, agricultural, and economic benefits. AgSTAR assists those who enable, purchase, or implement anaerobic digesters by identifying project benefits, risks, options, and opportunities.
USDA Natural Resources Conservation Service (NRCS) Environmental Quality Incentive Program (EQIP)
Through EQIP, NRCS provides agricultural producers (farmer, rancher or small business) with financial resources and one-on-one help to plan conservation practices and implement improvements. Conservation practices may include anaerobic digestion as one of those practices. Using these practices can lead to cleaner water and air, healthier soil and better wildlife habitat, all while improving agricultural operations. Through EQIP, the agriculture producer can voluntarily implement conservation practices, and NRCS co-invests in these practices with the producer.
USDA Nature Resources and Conservation Services Conservation Innovation Grant (CIG) Program
Conservation Innovation Grants (CIG) is a competitive program that supports the development of new tools, approaches, practices, and technologies to further natural resource conservation on private lands. Through creative problem solving and innovation, CIG partners work to address our nation’s water quality, air quality, soil health and wildlife habitat challenges, all while improving agricultural operations.
USDA Rural Development Value Added Producer Grant Program (VAPG)
The VAPG program helps agricultural producers enter value-added activities related to the processing and/or marketing of bio-based, value-added products. Animal waste is considered a bio-based material. Anaerobic digestion of this bio-based material to produce value added products such as fertilizers, biochar, bedding, and compost adds value to this animal waste product. Generating new products, creating, and expanding marketing opportunities, and increasing producer income are the goals of this program. VAPG can provide either a Working Capital Grant for operating costs directly related to the processing and/or marketing of the value-added product or a Planning Grant for various economic planning activities.
Independent producers, agricultural producer groups, farmer- or rancher-cooperatives, and majority-controlled producer- based business ventures are eligible to apply for this program.
USDA Rural Development Business and Industry (B&I) Loan Guarantee Program
B&I Loan Guarantee Program supports businesses located in a rural area to install commercially proven renewable energy facilities such as anaerobic digesters for the business. A rural area for this program includes any area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town. An eligible business includes for-profit business, nonprofits, cooperatives, Native American tribes, public bodies, and individuals. The maximum loan guarantee is $25 million. Applications are received and processed throughout the year.
USDA Rural Development Rural Energy for America Program (REAP)
REAP Renewable Energy and Energy Efficiency supports small rural businesses and agriculture producers purchase, install, or construct bioeconomy development projects such as an anaerobic digester. A rural area for this program includes any area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town. The definition of “small” is based on the Small Business Administration definition of small business for the type of business. An eligible agricultural producer includes an individual or entity directly engaged in the production of agricultural products, including crops (including farming); livestock (including ranching); forestry products; hydroponics; nursery stock; or aquaculture, whereby 50 percent or greater of their gross income is derived from those products. The maximum loan guarantee is $25 million and grant is $500,000 to any one applicant.
USDA Rural Development Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (Section 9003)
Section 9003 provides loan guarantee funding up to 80% of the eligible project up to $250 million. The project does not have to be in a rural area but must be located in the United States or a United States Territory. A borrower must be an individual; an entity; an Indian Tribe; or a unit of State or Local Government, including a corporation; a Farm Cooperative; a Farmer Cooperative Organization; an Association of Agricultural Producers; a National Laboratory; an Institution of Higher Education; a rural electric cooperative; a public power entity; or a consortium of any of the above entities.
Section 9003 has a two-phase application. Phase I application contains the information necessary for USDA to determine the eligibility of the proposed project for the program. Phase II application contains the more detailed application documents. Applications are received twice a year – April 1st and October 1st.
DOE Title XVII Innovative Energy Loan Guarantee Program (LGP)
LGP provides borrowers access to capital, flexible financing, and expert project support to help reinvigorate, advance, and transform America’s energy infrastructure including waste to energy projects. LGP can provide first-of-a-kind projects and other high-impact, energy-related ventures with access to debt capital that private lenders cannot or will not provide.
ABOUT THE AUTHOR: Bill Hagy is retired from the United States Department of Agriculture’s Rural Development after 37.5 years. During his three decades years at the US Department of Agriculture, he progressed from Assistant County Supervisor administrating loans, loan guarantees, and grant programs to serving as Acting Under Secretary for Rural Development and spent his final three years as the Special Assistant for Renewable Energy to Former United States Secretary of Agriculture Tom Vilsack advising on policy matters relating to alternative/renewable energy development. He is a member of Lee Enterprises Consulting, the world’s premier bioeconomy consulting group, with more than 150 consultants and experts worldwide who collaborate on interdisciplinary projects, including the types discussed in this article. The opinions expressed herein are those of the author, and do not necessarily express the views of Lee Enterprises Consulting.