WASHINGTON, July 25, 2012 -As federal regulations for agricultural nutrient runoff build, agricultural producers say they need to find consistent and sustaining methods to address government commitments to environmental standards under legislation like the Clean Water Act.

In some watershed areas, particularly the Chesapeake Bay, anaerobic digesters funded by private companies and with help from USDA are attempting to initiate a solution, but the next step is to establish viable means to fund and trade “environmental credits.”

Kreider Farms, a 2,000-head dairy facility in Lancaster County, Pennsylvania, uses Bion’s anaerobic digester to separate manure solids from liquids, reducing ammonia and nitrogen discharge. These reductions will qualify for credits under Pennsylvania's Nutrient Credit Trading Program as part of the operation’s strategy to comply with Pennsylvania's Chesapeake Bay Tributary Strategy.

According to the Nutrient Credit Trading Program, which is focused on the Chesapeake Bay Watershed, the goal is to provide more efficient ways for National Pollutant Discharge Elimination System (NPDES) permittees to meet their effluent limits for nutrients.

Under the Clean Water Act, NPDES permit program regulates point sources that discharge pollutants into waters of the United States. Dischargers within the Chesapeake Bay Watershed are required to meet a “pollution diet” stipulated by the Total Maximum Daily Load (TMDL).

According to an Environmental Protection Agency (EPA) executive summary, the TMDL sets Bay watershed limits of 185.9 million pounds of nitrogen, 12.5 million pounds of phosphorus and 6.45 billion pounds of sediment per year – a 25% reduction in nitrogen, 24% reduction in phosphorus and 20% reduction in sediment.

The goal is to ensure that all pollution control measures needed to fully restore the bay and its tidal rivers are in place by 2025, with at least 60% of the actions completed by 2017, says EPA.

“I think if Pennsylvania moves forward on this, it will become a national model,” said Bion CEO Dominic Bassani, who said the farm could sell the credits to a producer who is mandated to reduce his or her nutrient load into the bay as part of Phase 1 of the Kreider Farms project.

Phase 2 involves renewable energy production from the dairy waste coarse solids with the waste from Kreider's approximately 5 million chickens. Bassani said if a few large producers could invest in anaerobic systems, the challenge remains to establish a viable and consistent system for trading environmental credits.

Agriculture Secretary Tom Vilsack visited a similar operationPennwood Farms in Berlin, Penn. – which was funded in part with the support of USDA to convert manure into electricity and high quality bedding. USDA’s Rural Development office supported deployment by providing grants and loans in 2010 totaling over $528,000 through the Rural Energy for America Program.

The secretary signed an agreement with U.S. dairy producers in Copenhagen, Denmark in 2009 to accelerate adoption of manure to energy projects on American dairy farms. The Memorandum of Understanding stipulates that U.S. dairy producers reach a 25% reduction in greenhouse gas emissions by the year 2020.

Vilsack said Pennwood Farms saves around $60,000 per year in bedding, is able to produce all of its electricity and sells enough power back to the local grid to meet the needs of an estimated 600 people. He emphasized a small operation within USDA that focuses on environmental markets. Noting he is “proud of the work they are doing,” Vilsack said the team is “creating a system that would allow us to do a better job of measuring, verifying and quantifying the results of conservation.”

The focus of the group revolves around the theory that “if you can measure something and verify it, you can sell it,” Vilsack said, addressing the issues of tracking and verifying environmental credits. He said the team is now focused on trying to work with producers and entities within the Chesapeake Bay area to mitigate any issues involved with the quality of the bay.

“Over time, this is a great opportunity for us to continue our effort that we have put in place,” he said. “This holds up extra promise for the rural parts of the country.”

“To the extent that you have the capacity to measure and verify conservation results and there is an industry outside agriculture that needs that result, then you can create a local market,” he said.


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