Abstract

Anaerobic digesters (ADs) have the potential to increase energy production and reduce methane emissions from manure management. Anaerobic digesters capture methane and produce a biogas that can be used to generate electricity or sold as a renewable natural gas (RNG). As of July 2023, there were 343 livestock anaerobic digesters in the United States. The adoption of anaerobic digesters has been limited by relatively high digester construction costs and low financial returns from the sale of biogas-end products. This study quantifies the energy prices and carbon payments that may be required to incentivize the construction of anaerobic digesters on swine operations, depending on the manure management system and location of the operation. Results indicate energy prices have a relatively small effect on the profitability of anaerobic digester projects, though the projects influence the optimal choice of biogas end use (e.g., RNG, electricity). In contrast, carbon payments for the methane reductions from anaerobic digesters could be a strong determinant in farm-level decisions to install anaerobic digesters. We discuss how cost-share programs and long-term contracts—both for energy and carbon payments—could help spur investment in anaerobic digesters by reducing producers’ investment costs and uncertainty.