Profits from pollutants: Economic feasibility of integrated anaerobic digester and nutrient management systems

There has been sustained interest from both environmental regulators and livestock associations to expand the use of anaerobic digester (AD) technology to mitigate greenhouse gas emissions. However, the generally profitable practice of codigesting off-farm organic waste could increase nitrogen and phosphorus content to the farm and exacerbate nutrient over-application concerns near large animal operations. We examine the economic feasibility of a broad set of dairy waste management systems composed of two technology groups that mitigate air and water pollution: an AD system that includes either animal waste input or combination animal/off-farm organic waste codigestion input and either compressed natural gas (CNG) or combined heat and power (CHP) output; and a filtration system that includes fiber separation, nutrient separation, and/or water recovery. We conclude that AD setups without codigestion are only economically feasible under limited conditions, but scenarios which use codigestion have the potential to contribute to nutrient over-application without nutrient separation technology. Trends for CNG and CHP match closely. Net present value (NPV) is greatest for AD with CNG scenarios. Estimated NPV for AD with CNG and environmental credits is $1.8 million and $39.7 million for dairies with 1600 and 15,000 wet cow equivalents, respectively. For these firm sizes, the addition of codigestion contributes $4.8 million and $47.3 million, respectively, to estimated NPV. Nutrient separation and water recovery both lead to decreases in scenario NPV with codigestion, but with the right policies, dairy owners may be willing to adopt AD with nutrient separation.