Source: YAKIMA CHIEF HOPS, INC. submitted to NRP
FEASIBILITY STUDY FOR A BIOCO2 AND RENEWABLE NATURAL GAS ANAEROBIC DIGESTER UPGRADING PLANT
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
SMALL BUSINESS GRANT
Reporting Frequency
Annual
Accession No.
1028448
Grant No.
2022-33530-37072
Cumulative Award Amt.
$171,185.00
Proposal No.
2022-01049
Multistate No.
(N/A)
Project Start Date
Jul 1, 2022
Project End Date
Jul 31, 2023
Grant Year
2022
Program Code
[8.8]- Biofuels and Biobased Products
Recipient Organization
YAKIMA CHIEF HOPS, INC.
306 DIVISION ST
YAKIMA,WA 989024553
Performing Department
(N/A)
Non Technical Summary
Yakima Chief Hops (YCH) produces fresh and aged hops, pellets, cryogenic hops, and oil extracts for large and small brewers across the nation and abroad. The hop extract process requires a steady input of food-grade carbon dioxide (CO2). In recent years, the CO2 supply chain in the Pacific Northwest has become increasingly inconsistent, with delivery delays becoming the norm. YCH will study the feasibility of creating their own food-grade CO2 (here called bioCO2) and renewable natural gas (RNG) from agricultural byproducts using an anaerobic digester. Anaerobic digesters are a natural fit because they are a simple enclosed structure where microorganisms convert organic waste material into biogas, a mixture of carbon dioxide and methane, that can then be upgraded to bioCO2 and RNG.To carry out the feasibility study, we will first evaluate potential feedstock sources, including hop post-harvest residue (i.e. spent plants), slash piles remaining after timber harvests in the forest, and cow manure. We will work with hop growers, dairy operators, and Yakama Forest Products, a Native American-owned lumber mill, to quantify the volume and times of the year that the waste is available, as well as how the waste will be stored and transported to YCH for use in the digester. The second step of the study will be to determine the amount of bioCO2 and RNG created from different combinations of the feedstocks. This will guide the types and volumes of feedstock that will need to be purchased to create a specific volume of bioCO2 and RNG for production purposes. Feedstock samples will be collected from representative suppliers and sent to Clean-Vantage, LLC for analysis. Finally, a benefit-cost analysis will be performed to determine estimated costs and revenue at a range of facility sizes. Costs include feedstock purchase and transport to the facility, capital expenditure to construct the plant, and operational expenditure to run the plant. Revenue will come from the sale of RNG and excess food-grade CO2. Two potential RNG revenue streams are available: 1) the EPA's renewable fuel standard program has a marketplace for selling RINs created from biofuel production, and 2) California and Oregon each have a marketplace for selling low-carbon credits from the creation of low-intensity carbon biofuels, with Washington and Vancouver, BC expected to roll out their own programs in the coming years.The results of the study will show whether there is sufficient feedstock available annually to create sufficient bioCO2 and RNG needed for YCH use and profitability. The benefits of a successful implementation of this project are many. Significant amounts of carbon will not be emitted to the atmosphere due to a reduced CO2 supply chain and the bioCO2 not being created from petroleum but instead from organic waste products that would otherwise be burned (forest slash), left to decompose (hop residue), or be spread on farm fields or held in a lagoon (manure). Economically, this project will provide jobs in a rural town, help build a relationship with the Yakama people, and be a model for other hop-producing regions in the country.
Animal Health Component
50%
Research Effort Categories
Basic
50%
Applied
50%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
4032230202033%
4030612202033%
4033410202034%
Knowledge Area
403 - Waste Disposal, Recycling, and Reuse;

Subject Of Investigation
0612 - Conifer forests of the West; 3410 - Dairy cattle, live animal; 2230 - Hops;

Field Of Science
2020 - Engineering;
Goals / Objectives
The major goal of this project is to determine the feasibility of creatingfood-grade CO2 and renewable natural gas fromagricultural residues in our region, including hop and hemp waste.The main technical objectives and tasks are as follows:Objective 1. Determine the volume of bioCO2 and RNG created from various feedstock mix designs.Task 1.1 - Collect feedstock samples from hop growers, slash piles, and dairy farms.Task 1.2 - Perform lab analysis of the feedstock samplesTask 1.3. Determine any losses in the biogas upgrading process Objective 2: Determine the annual availability, volume, and timing of potential agriculture and forest feedstocks within the region.Task 2.1 - Determine the amount of manure produced monthly per head of cattle.Task 2.2 -Determine the amount of slash that is produced annually and volumes that are attainableTask 2.3 - Determine the volume of post-harvest hop residue that is produced annually.Objective 3- Determine estimated revenue from a range of bioCO2 and RNG production volumes relative to costs.Task 3.1 - Determine bioCO2 and RNG target volumes and associated feedstock needs.Task 3.2. Determine estimated feedstock procurement costsTask 3.3 - Determine total cost of pretreatment technology, anaerobic digester, and upgrading facility based on varying plant sizes.Task 3.4 - Estimate revenue from selling bioCO2 and RNG.
Project Methods
Objective 1. Determine the volume of bioCO2 and RNG created from various feedstock mix designs.Task 1.1 - Collect feedstock samples from hop growers, slash piles, and dairy farms.2kg of fresh post-harvest hop vines and twine from 3 different farms (Sept-Oct)2-3 kg of cow manure from 2-3 medium and large free stall dairies (Sept-Oct)2 kg of wood from each of 3 slash piles (Sept-Oct)Learn how other feedstocks may affect the biogas output: apple pomace (DelMonte, TreeTop, Seneca); animal renderings (Wa Beef); dairy byproducts (DairyGold); hemp (growers); expired beer, wine, and sodaTask 1.2 - Perform lab analysis of the feedstock samplesCleanVantage is sub-contracted to perform lab-scale analyses of the samples at various mix designs www.clean-vantage.comSample 1Sample 2Sample 3Sample 425% manure33% manure50% manure50% manure25% hop residue33% hop residue25% hop residue50% hop residue25% wood chips33% wood chips25% wood chips25% recycled ligninTask 1.3. Determine any losses in the biogas upgrading process Talk with Ameresco, Pentair, Saipem, etc about losses in the upgrading process.Objective 2: Determine the annual availability, volume, and timing of potential agriculture and forest feedstocks within the region.Task 2.1 - Determine the amount of manure produced monthly per head of cattle. Meet with dairies and feed lots to determine:volume of sludge producedhow it is currently stored (either in lagoons or upright tanks, or both) how it is disposed of, andthe frequency of disposal.Create correlation between # of head of cattle and volume of manure produced monthly using a best-fit linear regression linein Excel to determine the accuracy of the correlation, evaluated using the coefficient of determination (R2) value to determine the amount of variation not explained by the model.Gauge interest in their participation as feedstock supplierTask 2.2 -Determine the amount of slash that is produced annually and volumes that are attainableMeasure dimensions of slash piles and estimate volume and weight of the wood.The average volume of slash in the piles will be determined using steps outlined in the 1996 U.S. Forest Service Report "Guidelines for Estimating Volume, Biomass, and Smoke Production for Piled Slash" (Hardy 1996)Multiply volume by number of piles available to determine total wood available.Determine spatial location of the piles and discuss with Yakama Forest Products the percent that are economically available to chip and transport to biodigester.Task 2.3 - Determine the volume of post-harvest hop residue that is produced annually.Measure dimensions of hop and twine piles to determine correlation between acres harvested and residue produced.Dry hop residue and twineusing each farm's hop kilns to a moisture content of around 10% and baled using an onsite baling machine.The number of bales and the weight of each bale will be recorded, along with the hop varieties that were harvested and comprise the residue.Create correlations between acres harvested and total weight and number of bales, and volume of residue pile and total weight of bales using abest-fit linear regression linein Excel to determine the accuracy of the correlation, evaluated using the coefficient of determination (R2) value to determine the amount of variation not explained by the model.Objective 3- Determine estimated revenue from a range of bioCO2 and RNG production volumes relative to costs.Task 3.1 - Determine bioCO2 and RNG target volumes and associated feedstock needs.Determine YCH's current and future demand by month for bioCO2.Define minimum volume of bioCO2 that must be produced monthly to meet projected in-house demand. Select a range of increasing bioCO2 and RNG production volume targets.Use feedstock-to-biogas correlation for each sample mix design from Task 1.2 to determine the amount of each feedstock needed to meet the range of target production volumes.Task 3.2. Determine estimated feedstock procurement costsFor the fixed unit purchase cost, we will work with each group of providers (manure, hops, wood) to determine a price range per dry ton.Dairies: determine if there is an "avoided cost" from supplying manure instead of treating and disposing of the waste.Hop growers: costs for heating kilns to dry waste and baling the dried residue. May be interested in providing the feedstock for free or a lesser cost to receive the nutrient rich digestate from the digester in return that can be used as organic fertilizer on their fields.Wood piles (slash): cost to transport the wood pile to a landing, grind the wood into chips, and load the wood into a waiting chip van.Variable transportation costsUse GIS and truck types with known carrying capacity to create transportation cost model using methodology defined by Martinkus et al. 2018.Run model from known dairy, hop kiln, and slash pile locations to assumed biodigester location in Sunnyside to determine total variable transportation cost of each.For each feedstock type, sum fixed plus variable transportation costs to determine total procurement cost.Use this analysis to determine which providers (dairies, hop growers) to target for least-cost procurement of feedstock.Task 3.3 - Determine total cost of pretreatment technology, anaerobic digester, and upgrading facility based on varying plant sizes.Work with Clean-Vantage to determine approximate capital and operational costs associated with different sizes of their combined pretreatment technology and anaerobic digester.Work with upgrading facility manufacturers such as Pentair to determine approximate capital and operational costs for varying sizes of their facility that correspond to the varying anaerobic digester sizes and composition of biogas leaving the anaerobic digester.Task 3.4 - Estimate revenue from selling bioCO2 and RNG.bioCO2: Determine average sell price based on YCH's recent purchase history in terms of $/lb CO2 and assume all CO2 generated in excess of YCH consumption will be sold.RNG:Determine steps needed for RNG to qualify for US EPA's Renewable Identification Number (RIN) program as a D3 biofuel.Calculate the weight of a gallon of RNG (from Task 2.1) which will allow us to convert the low-CI fuel price into $/gal.Calculate the Carbon Intensity (CI) of the RNG for use in the state low-carbon biofuel programs.Sum the RIN revenue plus low-carbon fuel revenue to determine estimated total revenue from RNG.

Progress 07/01/22 to 07/31/23

Outputs
Target Audience:The target audience was Yakima Chief Hops, and by extension, other hop growers and hop extract companies broadly, for an analysis of how hop waste could potentially be used to generate renewable natural gas and food-grade CO2. Changes/Problems:The only major change from the proposal to the research was in the use of a specific lab (Clean-Vantage) to perform biomethane potential analysis of the feedstock using their proprietary technology for biomass pretreatment and hydrolysis that significantly increases the amount of lignocellulosic material that can be metabolized into biogas.This technology removes the lignin stream from the pretreated lignocellulosic material, then pretreats the recycled lignin stream alone to make it more bioavailable to digester enzymes, thus enhancing biogas creation and reducing the volume of residual lignin remaining in the digestate. The lab owner verballyindicated they would run samples at a fee of around $13,500 (the amount budgeted for lab work) during the proposal generation phase. However, when the samples were ready for lab analysis they quoted a fee of around $20,000 for just a few samples. Thus, other quotes were obtained for lab analysis and one was found that charged $700/sample. An additional waste treatment technology was analyzed along with the anaerobic digester technology specified in the proposal. This technology is an encolosed vault for composting with the ability to capture air emissions. Yakima Chief Hops is mainly interested in CO2 generation and less so in renewable natural gas generation. This technology was found to be much less expensive and theoretically provide sufficient CO2 for their operation. What opportunities for training and professional development has the project provided?This project has allowed the YCH Corporate and Social Responsibility coordinator the opportunity to poll growers on their feelings around compost. He has also looked into "carbon farming" as an additional revenue source for their hop growers if they use the compost generated from this project on their fields. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Objective 2 was completed before Objective 1, as interviews were held with Tribal representatives, dairy owners, and hop growers to gauge interest in the project and providing waste if the project were to become commercialized. Objective 2 - A meeting was held with the Yakama Nation to determine the likelihood of purchasing wood waste created as a byproduct of their logging operations. This feedstock was determined to be unavailable for this project. Interviews were held with dairy owners to gauge their interest in providing cow manure. It was learned that many were under contract or a non-disclosure agreement with Pacific Ag, a company that is in the design phase of installing a large anaerobic digester-to-RNG project in Sunnyside, WA using cow manure as its main feedstock. Cow manure was deemed to be unavailable for this project. We learned from interviews with hop growers that they would potentially be interested in providing hop waste for this project if they could receive a commercial-grade compost or soil amendment in return. Therefore, hop waste was deemed to be a viable feedstock for further evaluation. Research was then performed to determine the estimated volume of hop waste that is generated annually from all fields that provide hops to YCH. Two methods were employed, one using a drone to calculate the volume of hop waste piles and the second using lab data of hop vine samples. The results of each provided two ends of a spectrum in potential hop waste generation. From this, four theoretical hop waste densities were generated in tons per acre: 0.5, 1.0, 1.5, and 2.0. These densities were multiplied by the total acreage of hop fields in production in 2022 (16,920 acres) from the YCH Grower Portal to determine theoretical volumes of hop waste available annually. The total acreage of all hop farms in the Yakima Valley was also estimated to determine the total available hop waste in the region if growers outside of the YCH Grower Network choose to participate. Objective 1 - Four alternative technologies were drafted in coordination with YCH to evaluate the best technology or approach for creating bioCO2 from hop waste, including: Alternative 1 - Anaerobic Digester Owned and Operated by YCH Alternative 2 - Compost-to-BioCO2 Facility Alternative 3 - Purchase BioCO2 from a Neighboring Anaerobic Digester Alternative 4 - Partner with an Outside Firm to Own and Operate a Digester Feedstock samples, including hop waste, wood chips, apple culls, grape pumice, and hop extract pellets, were sent to two labs for analysis. One lab analyzed the biomethane potential (BMP) of the feedstocks, which is an indication of how well they would be metabolized by anaerobic microbes in a digester to create biogas. The second lab analyzed the feedstocks for their compostability and the amount of CO2 created during composting. The BMP results for hop waste and hop extract pellets both showed low biogas creation (i.e. low digestibility) but high biogas volume for the feedstock that was digested. The hop waste used in the BMP analysis was only ground to around 1" pieces; more biogas is expected to be generated if the hop waste is pretreated via comminution to a much smaller particle size around 5mm. The compost lab analysis showed that hop waste mixed with hop pellets provided the highest amount of CO2 generation of all feedstocks tested. The lab results showed an 8% CO2 concentration with this mix, and the lab operators feel strongly that a 10% CO2 concentration could be achieved with more refinement of the mix design. A 9% concentration volume is used here in the economic analyses. Losses in the RNG upgrading system are around 2% based on documentation from vendors. Objective 3 - The volumes of biogas per unit of feedstock created from each technology were then applied to the range of theoretical hop waste volumes available annually. This created a range of potential CO2 volumes generated from compost and potential CO2 and RNG volumes generated from anaerobic digestion. It was found that anaerobic digesters would not create sufficient CO2 to meet YCH's annual demand at the lowest hop waste volume modeled of 0.5 tons/acre. Thus, this volume was not included in further analyses of digester siting and profitability. Using network routing tools in the ArcPro mapping software, a quickest-route travel time in minutes was calculated from each hop farm to the assumed facility location in Sunnyside. The average travel time for all hop farms is 30.4 minutes. The total travel time for one trailer to bring compost or digestate solids to a farm from the facility, unload the material, load the trailer with hop waste, return to the facility, and unload the hop waste was found to be 149 minutes or 2.5 hours. Assuming truck drivers work a 9-hour day, each driver can pick up 3 truckloads of hop waste per day. An informal time-and-motion study was performed to determine the time to load a truck with hop waste using a front loader. The total feedstock procurement cost is based on the driver's wage plus benefits and the operational and maintenance (O&M) costs incurred by the fleet. According to YCH, their drivers make on average $32.5 per hour. Trucking O&M costs include labor, repair and maintenance, tires, fuel and lubricants, overhead, and profit and risk, estimated at a total of $108 per hour. Dividing this total by the dry ton (DT) capacity of a truck (4.3 DT) gives an hourly rate of $24.9/hour-DT. Converting from hours to minutes equates to $0.41/min-DT. A Total Feedstock Procurement Cost equation was derived based on the feedstock volume procured from each farm, including fixed costs (loading and unloading times) and variable costs (transport to each farm). A pre-tax pro-forma was developed for each Alternative to evaluate the Return on Investment (ROI) of each. Operational costs were developed using other references as a guide. Capital costs were developed mostly through vendor quotes, with the use of the Cost-to-Capacity equation for scaling quotes to the different facility sizes. It was found that Alternatives 1 and 2 do not generate a positive ROI so long as YCH incurs the cost to collect hop waste from growers. Alternative 3, assuming YCH owns the CO2 upgrading equipment, generates a positive ROI at the CO2 volumes modeled of 2,000 tons, 4,000 tons, and 6,000 tons, with the assumption that the anaerobic digester will generate significant amounts of biogas to ensure their own profitability. Alternative 4 is profitable at the three hop waste densities modeled. Sensitivity analyses were performed around the first two alternatives to determine if a positive ROI was possible. The greatest ROI for the least investment is found with Alternative 4, YCH partnering with an investment firm and owning the CO2 upgrading equipment. In this option, an investment firm would incur the cost to construct and operate an anaerobic digester. YCH would own and operate CO2 upgrading equipment. It is assumed that YCH would receive 10% revenue from all RINs, LCFS credits, and wholesale natural gas sales, and all revenue from CO2 sales assuming $230/ton. For a capital investment of $2,030,300 at the lowest feedstock density of 1 ton/acre, an ROI of 14.2% is seen in Year 1 and an ROI of 28.8% in Year 20. The Alternative that can provide YCH with CO2 in excess of its annual demand and provide the most security in CO2 ownership at the least cost is Alternative 2, Compost-to-BioCO2. The capital investment for this system ranges from $5.8 million to $8.5 million, with ROIs in the average range of 9% - 17% annually.

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