The Debate Over LCFS Biomethane Inclusion

In the fall of 2021, a petition was filed to exclude biomethane derived fuels from dairy and swine manure in California’s Low Carbon Fuel Standard Program (LCFS). Critics argued that the inclusion increases pollution in low-income communities, does not fully account for greenhouse gas emissions, and that promoting digesters incentivizes the creation/expansion of new factory farms. California Air and Resource Board (CARB) recently pushed back on this assertion and denied the petition but agreed to continue engagement with environmental justice organizations.

Critics have suggested that the inclusion of dairy digesters in the LCFS market will increase the size and number of dairies in operation. This has not been demonstrated.  Installing anaerobic digester requires high upfront capital costs that easily reach into the millions of dollars. Further, LCFS prices are volatile, ranging from $150-$220/credit since 2016; recently credits dropped to $140. The combined volatility and upfront capital cost make it difficult to justify expanding a dairy operation just to access this market. To date, there are 317 installed anaerobic digesters in the country out of about 40,000 dairy farms. Overall, there has been low adoption of anaerobic digesters. The LCFS market driving the creation of new dairies seems far-fetched.

When considering dairy digesters, it is important to remember their significant impact on reducing baseline emissions. While dairies do contribute to climate change and have other negative environmental impacts, the installation of a digester is one of the biggest steps that can be taken to mitigate them. Dairy digesters have a two-fold effect: 1) Digester’s reduce methane emissions that would have been released to the atmosphere and 2) The gas or electricity produced by the dairy digester replaces fossil fuel energy sources that have a much higher carbon intensity.

In CARB’s response to the petition, they noted that the number of operational digesters has increased in California from 20 to 77, providing local odor and air quality benefits on top of reducing methane emissions by 75%. The benefits of anaerobic digesters on existing dairy operations should not be misconstrued by anti-dairy advocacy. The addition of a digester is a clear win compared to continuing emission of methane and local air pollutants. This program is critical for reaching our climate goals, as California is one of the largest producers of dairy in the country. It will be important to monitor the impacts of the LCFS program on the dairy industry as a whole, but at this stage, delaying the inclusion of dairy digesters in the LCFS market does more harm than good.

News + Resources

LCFS Petition Response
CARB, January 26, 2022
Dairy Farmers are Cashing in on California’s Push for Cleaner Fuel
Dan Charles, NPR, February 10, 2022