Executive Summary
What this report is about?
This report assesses the viability of producing and capturing methane from manure for conversion into energy within the context of the Australian intensive livestock industry. The key technology examined in this research for conversion of manure into methane is anaerobic digestion. This report therefore focuses on the historic and current use of anaerobic digesters in the livestock industry in Australia and overseas. It also investigates the viable project scale by estimating project costs, the transport costs for feed material associated and the current incentives available for industries to convert/ modify their current waste processing systems into anaerobic digesters.

Who is the report targeted at?
This report is targeted at two groups:

• Individual farmers who need to understand the reasons for methane capture, the available technologies, the current use of these technologies in Australia and overseas and the financial incentives available; and.
• Decision makers in government and industry who need to understand Australia’s current situation on methane capture and use from the intensive livestock industry.

Background
Methane capture and use from the intensive livestock industry has been reasonably well established in the European Union (in countries such as Denmark, Germany and UK), as well as the United States.

However, this process is used rarely in the Australian industry. With the increasing focus on minimising emissions of greenhouse gases, it is expected that the application of capture and reuse technologies can help significantly reduce methane emission from the intensive livestock industry.

This report therefore focuses on establishing the financial credentials of methane capture and use for the Australia intensive livestock industry.

The aims of the research project

This report aims to allow:

• An individual farmer to be able to make an initial assessment on the viability of anaerobic digestion for their operation based on their location, the proposed technology, the use of the energy, and the incentives available; and
• Organisations and the government to determine whether more support for the industry is required if there is intention to encourage the growth of methane capture and use technology in Australia.

Method
The first step of this research study was to understand the technologies available to produce methane from organic wastes produced by the intensive livestock industry and conversion of the methane into energy. This was achieved through a literature review to identify historic Australian and international work in the area of methane capture and use technology. An assessment was then carried out on the systems that best identify with and suit the characteristics of the Australian intensive livestock industries.

A further review of the literature was conducted to determine the best available method(s) for establishing the organic loads (tonnes per day) required from piggeries, dairy free-stalls and beef feedlots that would provide for economically viable capture and use of methane.

An assessment of the potential for cross-sectoral and/or cross-enterprise methane capture and use projects was undertaken to understand if project viability was enhanced through economies of scale.

This was achieved by obtaining information from the relevant industry sectors.

Capital cost estimates for methane capture and use facilities were prepared for each intensive livestock industry sector i.e. piggeries, dairy free-stalls, and beef feedlots. The cost data used was based on inhouse experience with similar anaerobic pond systems. An estimate of the potential economics for each of the options was also prepared showing possible payback periods.

As part of the cost analysis, determination of viable transport distances for crop stubble and liquid manure (dairy or piggery sludge at 1%, 5%, 10% TS) and the dry manure from deep-litter piggeries and beef feedlots (TS 60%) was also performed.

Results
The literature review revealed that the viability of anaerobic digesters in the intensive livestock industries is very site specific. It is dependent on:

• The type of “digester” that will be used (i.e. if there are any lagoons present to convert into digesters or new equipment will be required);
• The amount of energy produced and the potential uses of this energy;
• The location of the farm;
• The possibility of sale of the dewatered digested solids;
• Which state the farm is in; and
• The incentives available for the use of gas produced from anaerobic digesters in Australia.

Much of the literature reviewed reported manure production rates for livestock as “rules of thumb” (kg manure (TS, VS, etc)/animal/day). This approach is considered sufficiently robust to estimate manure production rates for evaluating the economic viability of projects.

The payback period for a piggery of size 20,000 SPU for a methane capture facility that involves covering existing lagoons and a cogeneration unit is approximately 6.5 years for a site using a diesel generator and approximately 11 years for a site connected to the grid. This would be reduced by 10-20% dependent on the particular incentive introduced.

The feasibility for transporting manure (liquid or solids) to a centralised methane capture facility was investigated and was found to be unfeasible if transportation distances exceed 5 km. Even for distances <5 km, transportation costs are significant relative to the available energy value.

Based on the transportation cost of straw per tonne per km, cost of straw per tonne and the energy available ($) in the straw when anaerobically digested, it is not financially viable to purchase and transport crop stubble to a farm for the specific reason of digesting it with manure to produce biogas.

Implications and Recommendations
This report will allow individual farms and organizations to make a preliminary assessment of the viability of methane capture and use in the Australian context. Based on the information presented, government and non-government organisations will be better positioned to determine if they are satisfied with Australia’s position on cleaner production in the livestock industry or whether provision of incentives or subsidies are required to stimulate the introduction of methane capture and use technologies.