California Awards $90m Grant Funding to Dairy Tech CalBio in Mission to Reduce State’s Livestock Emissions

CalBio, a company developing dairy digesters that generate renewable electricity and vehicle fuel in California, has been awarded $90 million in funding for three Dairy Pilot Projects from the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), and the California Department of Food and Agriculture (CDFA).

The dairy bio-methane pilot program is part of the state’s strategy to reduce emissions of short-lived climate pollutants, including methane. Legislation adopted in 2016 requires the state to reduce methane emissions from the dairy and other livestock sectors by 40% by 2030. Emissions from dairy manure account for approximately 25% of the State’s overall methane emissions. The interagency committee that selected the projects consisted of representatives from the CPUC, CARB, and CDFA.

The recent award to CalBio will help advance the use of digesters on California dairy farms by building and operating an interconnection pipeline. The pipeline will transport biogas produced on farms to conversion facilities, where it’s turned into Renewable Compressed Natural Gas (RCNG).

The funding follows the announcement of a new collaboration between major dairy cooperative Land O’Lakes SUSTAIN, its member dairy farmers, and CalBio aimed at breaking down barriers to digester adoption for RCNG production.

“This helps address a key barrier to adoption of digesters and it complements investments in on-farm digesters being led by farmers themselves,” Tina May, senior director at Land O’Lakes SUSTAIN, told AgFunderNews. “Interconnection pipeline is important because it’s central to a ‘hub-and-spoke’ system for renewable energy. Three of the six pilot projects announced by the state – the ones being led by CalBio – will connect regions of the state where our farmer-members are leading the way on digester use.”


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Founded in 2006, CalBio has worked closely with the dairy industry and state agencies to develop programs to help the state achieve its methane reduction goals while delivering a new revenue source to California dairies. It designs, develops, operates, and finances as-needed digester projects while assisting users with selling the electricity or vehicle fuel through state and federal grant programs.

The company’s technology has four primary steps, starting with waste collection at the dairy farm. Manure is flushed into collection areas and then flows to an anaerobic digester, with solids separation before or after the digester, depending on the technology utilized at a given dairy. Next, an anaerobic digester uses microorganisms to break down the organic matter and create biogas, which is then trapped in the digester. The captured biogas primarily consists of methane that otherwise would have been released to the atmosphere.

The methane is then destroyed by combusting it to generate renewable electricity or to power a truck, bus or car. In electricity projects, electricity is exported to the grid. The primary revenue source is the BioMAT program with PG&E and SCE and revenue is enhanced by storing the biogas and producing electricity at the most valuable time of day.

Finally, the digested effluent water can be recycled as flush water, resulting in cleaner lanes, better hygiene, and fewer slips and falls. The digestion process increases the conversion of the raw manure’s organic nitrogen into an inorganic form (over 60% conversion) making the nitrogen more available to the crops, improving crop yield and saving costs.

CalBio’s South Tulare, North Visalia, and Buttonwillow clusters were awarded funding which adds to its existing clusters and projects being developed in Bakersfield, Hanford, West Visalia, Fresno and Merced counties. The projects are designed to send conditioned dairy biogas to a centralized upgrading facility where it will be upgraded to renewable natural gas (RNG) and injected into the gas utility pipeline. Once built, CalBio’s dairy-sourced biomethane will be used as a vehicle fuel with a focus on replacing diesel use in heavy-duty trucks, buses, and farm equipment.

Constructing the pipeline is only one barrier facing California’s dairy farmers. Managing the installation of a digester on top of a dairy’s day-to-day operations can be overwhelming, not to mention the task of finding a home for the biogas that they will produce. SUSTAIN and CalBio are hoping to alleviate some of these challenges through the new funding.

They’re also banking on the project to help farmers develop a new revenue stream, which is something that the dairy industry desperately needs after continued years of crippling milk prices.

“If we meet farmers on this journey, find ways to complement their investment, whether through public funding like this announcement from the State of California or through expertise from CalBio and Land O’Lakes SUSTAIN, there’s tremendous opportunity into the future,” says May. “Farmers are leading the way on this technology, but they can’t do it alone, so this drumbeat of a private-public partnership is incredibly important.”

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