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Dairy digester outlook needs stable carbon markets
A dairy analyst says more producers have turned to digesters as a steady stream of capital to offset volatile milk markets.
Terrain’s Ben Laine tells Brownfield, “The value really comes from the fact that you can, as a dairy, generate these credits that other companies need to buy in order to remain in compliance, and that’s been the major value driver.”
He says California’s Low Carbon Fuel Standard and improvements to turn methane into renewable natural gas caused a surge in facilities over the past decade.
“A lot of it depends on policy and state regulations and whether these markets will continue to exist,” he says. “There is still interest, we’re seeing more states kind of look at these types of markets.”
Laine says their low carbon scores make them especially valuable.
“Dairy makes very valuable credits because it’s such a net negative, carbon intensive type of project, but really it doesn’t tilt the scales on the supply side, so it’s not like if we get more dairies signing up for these that we’re going to overflow the market with renewable natural gas,” he shares.
Laine says a larger portion of profitability hinges on RIN credits through the Renewable Fuel Standard as the value of California’s carbon credit weakens.
