Farm rm-Base Based d Nu Nutri rien ent Op Oppo port rtun unit itie ies California Air Resources Board Non-Digester Projects Dairy Subgroup #1 August 21, 2017 Steve Rowe, CEO Newtrient LLC www.newtrient.com
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Now is the time … • Increasing regulatory, judicial and societal pressure around manure and agricultural by-products • Increasing surface and ground water issues related to nitrogen and phosphorus • Decrease in consumer trust 3
Ou Our Desired red Ou Outc tcome ome 1. Farms help resolve societal issues related to water pollution and GHG emissions 2. Farmers realize economic benefits from voluntary actions 3. Farmers improve their social license to operate and increase consumer trust 4
Whe here e we we ar are e to today ay • In the 1970s, we “punted” with non -point sources of pollution and regulatory development was more focused on point sources • Over time, EPA has shifted it’s focus from policy development to enforcement • Permits made it easier for manufacturers to keep their playing field level • Traditional manufacturers are price makers (cost +), but most farmers are price takers meaning food prices are not tied to costs
Ho How w do we we cre reat ate e an an eco economic nomic mo model del that hat inc incent ents s the beh he behav avior ior we wa we want nt? 6
The e Roots ots of f Modern ern Environmentalis vironmentalism • How to “internalize external costs?” • Garrett Hardin’s Tragedy of the Commons (1968 ) – Formed the underpinnings of the EPA enforcement model • NEGATI TIVE VE DRIVERS VERS – Regulation – Permits – Litigation – Citizen Enforcement 7
Al Alig igning ning Ma Market ket In Incen entives tives With th Des esired ired Ou Outc tcome omes POS OSIT ITIV IVE E DRIVE VERS – Value Environmental Asset Services (e.g., GHG reduction, phosphorous capture) – Allow those responsible for higher cost pollution prevention obligations to purchase voluntary lower cost results – Spread pollution prevention costs across larger population (e.g., entire supply chain) – Nutrient Trading (e.g., water quality trading) – Tonnage Fees – Contaminant Bounties – Recycled Fertilizer Portfolios 8
Don’t let the pursuit of perfection ge get in the way t in the way of prog of progre ress! ss! 9
Milk, Meat & MANURE Energy Manure-Based Products • Electricity • Heat • N – Ammonium Nitrate, Ammonium • Renewable Natural Gas Sulfate • Aviation Fuel • P – Ammonium Phosphate, Mono- • Biodiesel ammonium Phosphate • Hydrogen • Compost • Methanol • Bedding • Syngas • Custom Fertilizer Products • Worm Castings • Biochar Environmental Assets • Water • “Cow Pots” (fiber) • Carbon Credits • “Magic Dirt” (fiber) • Renewable Identification • Zeolite Numbers • Struvite • Low Carbon Fuel Std. Credits • Digestate algae • Renewable Energy Credits • Humus • Nutrient trading: Water quality credits (N & P) 11
Creating an Environmental Services Marketplace (Demand) (Supply) Low Cost Payments High Cost Voluntary Compliance Pollution Obligations Prevention Nutrient reductions at lower costs Farmer Seller Wastewater Buyer Mark S. Kieser Kieser & Associates, LLC Credits Kalamazoo, MI USA 12
Wa Watershed rshed-scale scale Tra rading ding Pro rogra grams ms 13
Creating an Environmental Services Marketplace (Demand) (Supply) Payments Payments Low Cost High Cost Voluntary Environmental Compliance Pollution Obligations Prevention Services Clearinghouse Farmer Seller Compliance Buyer Certified Verified Compliance Environmental Credits Credits 14
A n A new w kind d of f comp mpan any A leader in discovering innovative ways to capture the value of manure to preserve and enhance the environment. Driving adoption of Evaluating the Creating a environmental state of manure marketplace for asset markets management manure-based for voluntary, technologies products pollution prevention 15
Open source manure technology resources www.NEWTRIENT.com 16
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Repr presenting esenting 50% % of f the US Dai airy ry Far arme mers rs 18
Newtrient’s Team am CEO Product Innovation Center Technical Team Development Team Steve Rowe Team of Experts Paul Sellew Craig Frear • • • Environmental Nutrient Recovery & Entrepreneur in Stewardship Bio-Energy Agriculture products Newtrient’s Board • Animal Care • Curt Gooch Industry Partnerships Steve Liffers • • Nutrient Recovery & Lawn and Garden Operations & Engineering Bio-Energy Sales & Supply Chain Catalog & Bus Dev Jim Wallace Mark Stoermann Garth Boyd Ron Alexander • Nutrient Recovery & • Product & Market Bio-Energy Development Dana Kirk Link to Board Entities: Gov’t Affairs & Environment Team • http://www.newtrient.com/Our-Team/Dairy-Industry-Leadership Nutrient Recovery & Bio-Energy Bruce Knight Bus Dev & Finance Clay Detlefsen Ryan Bennet Jerry Bingold • Former Chief Chris Kopman • • NMPF Industry Legislative & • Anaerobic Digesters of NRCS & Environment Regulatory & Energy Mark Kieser Frank Mitloehner • • Water Quality Air Quality 19 Link to Newtrient team Bio’s: http://www.newtrient.com/Our-Team/Our-Team-of-Experts
Ke Key y Tak akeaways aways • Let natural science, social science and sound economics be our guide • Any improvement is good – A lack of precision is okay so long as we are directionally correct • Newtrient understands the path and the dairy industry is committed to success 20
Ski the spaces . . . 21
Fa Farm rm-Bas Based ed Nu Nutri rien ent Op Oppo port rtun unit itie ies Steve Rowe, CEO steven.rowe@newtrient.com www.newtrient.com
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