Can the Dairy Industry Help Reduce Transportation’s GHG Emissions?

November 20, 2018

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Dairy industry to discuss topic at the Dairy Sustainability Summit next week in Sacramento.

The California dairy industry is the nation’s largest, producing about 18.5 percent of all of the milk and dairy products consumed in the United States, nearly 10 billion pounds more annually than the second biggest milk producing state, Wisconsin. It employs over 180,000 Californians and generates an eye-popping $35 billion in annual economic activity for the state. There are nearly 1.7 million cows producing milk in over 1,300 dairies, the vast majority of which are located in California’s central valley.  It is not a stretch to say that the California dairy industry is a pillar of the state’s enormous and critically important agricultural economy.

As the state’s dairy industry has grown to be the country’s largest, California has been simultaneously working hard to reduce the state’s greenhouse gas emissions. Since the passage of AB 32 in 2006, California has enjoyed considerable success in lowering its carbon emissions. Between 2000 and 2016, California has realized a 9% drop in real GHG emissions, led by reductions from the electrical power and industrial sectors.

California has realized a 9% drop in GHG emissions, but the dairy industry and transportation sector have increased emissions.

Dairy Industry and Transportation Sector Emissions Rise

Two sectors, however, which have not enjoyed as much success in reducing their climate footprint, or which find themselves going in the wrong direction in recent years, are the dairy industry and the transportation sector. Dairy GHG emissions have increased 23.8% between 2000 and 2016, mainly due to the tremendous growth of the industry in California, while transportation sector carbon emissions have gone up every year since 2013. Yet, though there seems to be signs of trouble for each of these sectors, climate protection wise, they are well poised to help one another reverse recent trends and follow the rest of the state’s drop in GHG emissions.

Policy to Promote a Clean Future

The key for this alliance in carbon reduction is the California Air Resources Board’s (CARB) Low Carbon Fuel Standard (LCFS) program. Put in place after the passage of AB 32, the goal of the LCFS is to reduce the carbon content of the fuels used to power the state’s vast transportation sector. With nearly 25.5 million automobiles, 880,000 motorcycles and over 5.7 million trucks and other commercial vehicles registered for use on the state’s roads, mobile sources are the state’s largest single source of greenhouse gas (GHG) emissions. The transportation sector is responsible for about 41% of the state’s inventory of 429.4 million metric tonnes of carbon dioxide equivalent (2016 Inventory). Industry is the next largest source of the state’s emissions of climate altering gases, but is far behind with only 23% of California’s total GHG emissions.

The LCFS program goal is to reduce the carbon content of the fuels used to power California’s vast transportation sector.

The LCFS recently was amended to require fuel providers to reduce their carbon footprint 20% from 2015 levels by 2030, an increase in the carbon reduction requirement of 10% by 2020. To meet this mandate, fuel providers can either engineer their production processes to reduce carbon or they can buy credits from other transportation fuel providers with a low-carbon footprint, including fleets that use electricity to power their vehicles, producers of bio-fuels such as ethanol or biodiesel, or natural gas, diesel or hydrogen derived from renewable resources.

Methane from Cow Manure

One such renewable form of natural gas is methane in the biogas derived from the decomposition of cow manure. Methane, a powerful GHG that has 25 times the Global Warming Potential (GWP) of carbon dioxide, makes up about 65% of the biogas produced from cow manure. One can imagine that, in a state with the country’s largest concentration of dairies, cow manure is in abundance. In fact, fugitive methane from cow manure makes up 2.3% of California’s total 2016 GHG emissions inventory.

Yet, the methane (also called renewable natural gas, or RNG) from the dairy industry is also one of, if not the most valuable of the renewable fuels that can be used by fuel providers to meet their LCFS requirements. This is due to the fact that diverting methane from manure away from the atmosphere and using it as a substitute for diesel in medium and heavy-duty vehicles has such a low carbon footprint that it is regarded to actually be carbon negative (i.e. it removes carbon from the atmosphere). At today’s historically high LCFS credit prices, hovering recently around $190 per metric tonne of CO2e, a diesel gallon equivalent (DGE) of RNG derived from dairy manure will generate about $9.50 in LCFS credit!  For reference, the average dairy cow produces enough manure each year to produce roughly 100 DGE of RNG.

The LCFS provides a powerful financial incentive for the dairy industry to capture and clean the methane from cow manure, to deliver RNG to transportation customers in California.

The LCFS provides a powerful financial incentive for the dairy industry to build the infrastructure necessary to capture, clean and deliver their RNG to transportation customers here in California. Couple this with the revenue a dairy operator can receive from the sale of the renewable value of their fuel in the Federal Renewable Fuel Standard (RFS) program, and quickly the picture emerges that the market for vehicle fuel becomes the most compelling reason for California dairies to emerge as models for sustainability.

California Dairy Sustainability Summit

It is precisely this concept that will be discussed in detail at next week’s California Dairy Sustainability Summit in Sacramento. Organized by the five major dairy advocacy organizations in California (California Dairy Research Foundation, California Dairy Quality Assurance Program, Dairy Cares, Dairy Council of California and the Milk Advisory Board) , the Summit will focus on not only the decisive case for using manure to produce vehicle fuel, but on many other strategies that dairy owners and operators can pursue in order to reduce their environmental footprint, increase the efficiency of their operations, decrease operating costs and other wise make their operations more sustainable.

The California Dairy Sustainability Summit is November 27-28, 2018 in Sacramento, and will focus on many strategies for the dairy industry to be more sustainable.

Promoting the development of the infrastructure to capture fugitive methane from dairy manure to divert it as RNG to the transportation sector while simultaneously and immediately growing the market for this fuel in medium- and heavy-duty vehicles in California is the best way to reverse the troubling trends discussed above. This is one of the important goals the California dairy industry seeks to promote at the Sustainability Summit next week. California policy makers would be wise to attend, and work together with stakeholders to develop more ways to help advance this emerging market for the lowest carbon fuel.