Biden’s spending bill sparks debate over dairy methane pollution

WASHINGTON, Jan.11 (Reuters) – As US President Joe Biden’s administration seeks to revive its ambitious social and climate spending plan in Congress, environmental groups and the agriculture industry disagree over proposed subsidies to offset the substantial contribution of agriculture to global warming.

The tax credits and subsidies proposed in the administration’s sweeping ‘Build Better’ (BBB) ​​bill would strengthen the small but rapidly growing market for manure-based methane by supporting the construction of manure-based methane gas. machines that trap gas from open manure pits on dairy and other livestock operations. Farmers could then sell the captured methane for use in producing electricity or vehicle fuel in the form of compressed natural gas.

The proposed incentives have been hailed by dairy farmers and investors as a ‘game changer’ that could increase farm incomes while tackling climate change by providing a cleaner alternative to fossil fuels. The industry that produces gas from organic waste says the subsidies would stimulate the development of the machines.

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But some environmental groups and Democratic lawmakers have sided with the subsidies, saying they could backfire, because if capturing and selling methane from cows becomes profitable it could spur large farms to expand, increasing thus greenhouse gas emissions. They warn that supporting a market for biomethane fuel would delay the transition to a fully electric future.

“If you start making money from pollution, you won’t stop polluting,” said Rebecca Wolf, policy analyst at the environmental group Food & Water Watch.

The debate, which has intensified as the use of technology has spread, reflects the challenges of reducing dairy emissions due to growing cow herds and a lack of commercially available technologies to reduce methane, which is produced by both manure and animal digestion.

Methane, a potent greenhouse gas that has a higher heat-trapping potential than carbon dioxide (CO2), is the second leading cause of climate change behind CO2.

Full support from Senate Democrats is needed to pass the BBB spending program, which has not garnered any support from Senate Republicans. Democrats were unable to pass the bill last month, but say they hope to do so in some form this year.

Some Democrats are critical of these methane trapping machines, known as anaerobic digesters. Senator Cory Booker, a Democrat from New Jersey, told Reuters that the money for the plan should instead be “directed to family farmers for soil health and regenerative farming practices,” such as planting cover crops and the use of no-till agriculture.

West Virginia Senator Joe Manchin, a Democrat whose opposition to the spending plan led to its failure in the Senate in December, this month expressed support for clean energy tax credits, bolstering the industry optimism that the plan could still be adopted.

Methane pollution from livestock accounts for more than a third of methane emissions in the United States, according to the United States Environmental Protection Agency (EPA). Digesters are mostly found in dairies because dairy cows produce more manure than beef cattle.

The spending plan would make digester owners eligible for a 30% tax credit and invest billions of dollars in U.S. Department of Agriculture (USDA) programs that could help digester companies offset costs.

Digestor developers and investors say critics from environmental groups are hijacking efforts to tackle climate change.

“What is the alternative? Said Bob Powell, managing director of San Francisco-based digesters developer Brightmark LLC. “No more methane in the air. “

MISSED GOALS

A previous deal between former President Barack Obama’s administration and the dairy industry to promote digesters failed to reduce emissions, according to a Reuters review of government documents and data.

In 2009, the Obama administration and an industry group, the Innovation Center for US Dairy, pledged to reduce the industry’s greenhouse gas emissions by 25% by 2020 from 2007 levels. , in part by expanding federal support for new digesters.

Instead, methane emissions in the sector have increased by more than 15%, in part due to growth in herd size, according to EPA data reviewed by Reuters. The number of dairy cows nationwide has increased 3.3% since 2009, according to USDA data, to 9.39 million cows.

The dairy industry has since pledged to become greenhouse gas neutral by 2050, and the USDA will continue to work with the industry to achieve that goal, according to an agency official. The current Secretary of Agriculture, Tom Vilsack, was also Obama’s secretary.

The industry missed the 2020 target in part because the digesters were so expensive and there was then no market for the gas they captured, according to Karen Scanlon, executive vice president of stewardship of Environment Center for Innovation; and Jim Wallace, Senior Vice President of Environmental Research. .

Digesters are expensive, typically costing between $ 4 million and $ 7 million each, and often require dedicated personnel to operate them. Digesters also do not capture the 27% of US methane emissions from enteric fermentation in cattle or cow burps, for which there is no solution on a commercial scale.

But the landscape has changed, industry officials said, as since 2017 digesters have been able to generate lucrative credits for the biogas industry under a California policy called the Low Carbon Fuel Standard. Even out-of-state producers can claim the credits if the gas they produce is piped to supply state trucks and buses.

The value of these credits has roughly doubled since dairy methane was included in the program, to around $ 200, and the policy has helped “overload the industry,” Wallace said.

Sign of the controversy surrounding digesters, however, environmental groups asked the California Air Resources Board (CARB) in October to make them ineligible for credits, arguing their alleged role in tackling climate change was inflated and credits encourage the production of manure. . California is the largest dairy state, and the industry is responsible for more than half of the state’s methane emissions.

CARB said it was evaluating the petition.

Meanwhile, the state is doubling down on the technology, and CARB has said it may need to spend between $ 700 billion and $ 3.9 billion to build 200 more digesters to help meet its goal. ‘is set in 2016 to reduce dairy methane emissions by 40% compared to 2013 levels by 2030. The cost depends on whether the digesters are associated with polluting internal combustion engines or fuel cells cleaner but much more expensive.

The state is currently on track to meet only half of its emissions reduction target, having spent nearly $ 200 million on digesters since 2015.

“We believe we can achieve the rest of the reductions that we hope to see through additional digesters, as well as other reduction processes,” said Ryan Schauland, acting head of the project assessment arm of the CARB.

Investments in US biogas projects have already tripled since 2017 to more than $ 1.6 billion, according to data from research firm AcuComm, including from players like oil companies Chevron (CVX.N) and BP , as well as automaker BMW, which are seeking to profit from the biogas market and its subsidies.

There are currently 317 operational manure digesters nationwide, up from 141 in 2009, according to EPA data.

Currently, digesters favor large farms. A 2018 study on the potential of dairy biogas in Idaho found that a farm needed at least 3,000 cows for an “economically viable” digester operation. According to the most recent USDA census, only 714 of the approximately 40,000 dairy farms in the United States have 2,500 or more cows.

But the incentives offered in BBB could benefit some small farms, said Jed Davis, sustainability manager at Cabot Creamery in Vermont. He said six of Cabot’s farms have digesters and more are in development.

“I can’t imagine a future where every farm uses anaerobic digestion,” Davis said. “But I am optimistic that there are more opportunities than what is currently available.”

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Leah Douglas reported from Washington, DC, Nichola Groom from Los Angeles. Editing by Richard Valdmanis and Julie Marquis

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