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The CABE/EDEN Alliance for the
Bio-conversion of Poultry Litter Project

America loves chickens. In fact, compared to 30 years ago, more Americans prefer chickens than any other meat at dinnertime.

In 2013, the Poultry Industry in Delmarva produced about 565 million chickens, valued at about $2.8 Billion. Even though demand is high the smaller poultry grower families on Delmarva are struggling to maintain a profit because if the rising cost of heat, electricity and diesel fuel. The contract grower grows for a large chicken integrator. The integrator collects the mature birds and prepares and packages whole chickens or chicken parts for delivery to grocery stores. The Delmarva Poultry Industry, (“DPI”) tracks the rise in cost of production and corresponding retail prices, which rise each year. The average price for chicken parts, or whole broilers at the supermarket doesn’t rise nearly fast enough to keep up with costs over time. So the contract poultry grower struggles to maintain a good profit margin. This year, because of the rising cost of feed meal and diesel fuel, and the changes to the Farm Bill, we may see a spike on the price of chicken at the grocery store. Despite this spike to the consumer at the supermarket, the contract grower may see his margin diminish because of higher operations cost to get the broilers to market. Delmarva is the epicenter of chicken farming with 5 counties in Delaware and Maryland all listed in the Top-50 performing counties in the U. S. There are 4600 chicken houses in Delmarva, each producing an average of 100,000 chickens a year in 4-5 flocks/house. Among the costs for the independent chicken grower the highest annual cost is electricity, with the electric bill for an average farm with three houses, running in excess of $24,000/year. This electric bill rises, depending on the utility, between 3% and 6% every year. Within 10 years the chicken farmer should expect to see his electric bill 50% higher. The charter for EDEN Delmarva is to promote economic development through renewable energy, energy efficiency, and the recovery and re-use of renewable resources. In the interest of providing the poultry grower with tools to reduce operations cost, EDEN is collaborating with the University of Delaware, The University of Maryland, Eastern Shore, and Delaware State University to develop several projects that will create business opportunities for farmers, and assist them to either save on their cost of operations or demonstrate how farmers might increase their income, doing what they already do—raising chickens.

CABE/EDEN Alliance for the Bio-conversion of
Poultry Litter Project (“The Bio-conversion Project”
or the “Project”)

Farmers in Delmarva have been tilling the soil and raising livestock for ten generations. Since Cecile Steele accidentally started the poultry industry in 1923 one of the common practices in farming is to utilize manure as a fertilizer additive by spreading raw poultry litter on lands for corn, soybean and wheat crops that need the nitrogen and phosphorus. But the practice has come under serious scrutiny recently as the EPA and the States report that the largest single contributor to excess nutrients in Delmarva surface waters is the use of inorganic fertilizers and the use of raw poultry manure as a fertilizer additive. The poultry industry is the biggest contributor to the Eastern Shore economy, so an obvious problem is the increasing volume of fertilizer (poultry litter) over time. As the Eastern Shore economy grows, so will the amount of poultry litter produced. Today grain and produce farmers use raw poultry manure, or chemical fertilizer on about 390,000 acres of land. As agricultural land is sold, farm acreage decreases, while the volume of manure increases. Of equal concern is that poultry litter contains both nitrogen and phosphorus. While most grain farmers use raw manure principally for its nitrogen value, about 80% of the phosphorus remains in the soil but the soil matrix can only absorb so much phosphorus.

Among the many nutrients in chicken manure, a ton holds about 57 lbs. of nitrogen and about 44 lbs. of phosphorus. Feed corn, for example, uses about 80% of the nitrogen, and 20% of the phosphorus. Ideally the corn farmer wants just the nitrogen but the nutrient make-up of poultry manure requires that he take the whole package—phosphorus as well. The nutrients that are not used by the crops wash into the ditches and surface waters. Although phosphorus is not as mobile as nitrogen because the phosphorus molecules adhere to the soil, when the absorption capacity of the soil for phosphorus is exceeded, then phosphorus can become mobile. During heavy rains, when the water table rises in flooding, phosphorus can move into the ditches and travel to the Bays to contribute to nutrient overload. For decades the poultry industry and State Universities have been searching for an efficient, inexpensive method to separate the nitrogen and phosphorus in chicken manure. Finding a technology process that could separate nitrogen and avoid the phosphorus would be like finding the Holy Grail. An organic material for fertilizer that offers just the nitrogen, without the phosphorus could begin to resolve the problem of excessive phosphorus in Chesapeake Bay Waters, and overtime, reduce the nutrient overload that is polluting the Bay.

The CABE/EDEN Alliance has found the Holy Grail in a technology invented by Dr. Tony Gaudy of the University of Delaware and commercialized by one of his disciples, Dr. Al Rozich, a partner in BioConversion Solutions, Inc., (“BCS”) the BCS technology can convert poultry manure into four useful products through an anaerobic digester: Water, heat, biogas, and nutrients essential for the manufacture of fertilizer. Most importantly, this technology can be formulated to separate nitrogen and phosphorus from the digestate into valuable components including organic nitrogen and struvite. Both of these components have value to a fertilizer manufacture that is designing fertilizer to target specific crops, according to an agronomic plan. Better than standard anaerobic digester technology, the BCS process leaves no residual material from the bio-conversion process, and operates at a mesophillic temperature so that the plant produces significant biogas for heat and electricity. CABE/EDEN Alliance has acquired a license for this technology for use in Delmarva. The CABE/EDEN Alliance is planning a two-tiered development process for the Bio-conversion Project. First the partnership will develop a demonstration plant (PILOT) to create a public awareness campaign in Delmarva for poultry farmers and any consumers of the digestate end-products.

To construct the PILOT the CABE/EDEN Alliance will utilize land provided by the University of Maryland Eastern Shore, (“UMES”). Recently The CABE/EDEN Alliance has signed an agreement with UMES to conduct farm-field studies on digestate from the PILOT. These studies, in cooperation with UMES scientists will measure the impact on yield from crops, (e.g., lima beans, sweet corn, tomatoes and watermelons) by comparing different types of fertilizer. The PILOT will conduct field studies in triplicate, measuring the harvest from each crop based on the fertilizer used to nurture the plants. Scientists will compare results with crops that used poultry litter, or inorganic fertilizer to the crops resulting from the digestate produced at the PILOT.

Contemporaneous with the operation of the PILOT, the Alliance and its investors will finance and install the Full Scale Bio-conversion plant. The plant will use poultry litter as feedstock to produce biogas to run through a generator for electricity, heat, and also produce residual end-product materials from the digestate.

The Full Scale Bio-conversion Project will utilize 40,000 tons a year of poultry litter, creating about 4.2 MW of electricity, (30 million kWh) for sale to the grid and about 10,000 tons of digestate end-product, that can be used in the manufacture of fertilizer. The Full Scale Bio-conversion Project will produce four products: water to be recycling through the system, heat to the host facility, biogas for electricity and residual nutrients for fertilizer, including organic liquid nitrogen and phosphorus end-products. The Project will utilize poultry litter from less than 6% of the total available poultry litter supply in Delmarva,

Critical Path: At this point the CABE/EDEN Alliance has secured enough of the critical path elements to move forward with the financing and construction of both Bio-conversion Plants:

  • Secured grant funding for PILOT;
  • Executed agreement with UMES for land and field studies on digestate
  • Engineering and contractor quotes for PILOT;
  • LOI from MD Farmer for PILOT poultry litter supply;
  • Negotiations with Public Debt Financing resource;
  • Term sheets with two (2) equity investors;
  • Engineering sufficient to RFP for turn-key construction and equipment procuring for Full Scale Project
  • Utility price point for renewable electricity from Project;
  • Fertilizer price points for liquid nitrogen and struvite;
  • LOI from CTD Vendor for long-term supply of poultry litter equivalent to 40,000 tons/year-delivered to the Project.
  • Confirmed eligibility for USDA loans and loan guarantees for Full Scale Bio-conversion Project

Economic Solution for an Environmental Challenge:

The Bio-conversion Project technology will provide a long-term solution that addresses the challenge of nutrient run-off from agricultural lands, and the avoidance of green house gases from the decomposition of raw poultry litter on farmers’ fields. The Bio-conversion Project does not purport to be the only solution. There may be other technology solutions that can address the excess poultry litter challenge in Delmarva. Whatever the solution(s) moving forward, it is critical to honor the “keystone” transaction that has existed between farmers for three generations:

  • The poultry grower needs income from his creation of poultry litter, which is a true commodity; and
  • The grain or produce farmer needs inexpensive fertilizer to grow his crops.

The two plants in the Bio-conversion Project are a viable solution because they solve this challenge with “good economics” for the farming community, and by implementing nutrient management changes that mitigate the environmental challenges cited above. The Biomass plants are offered as an “alternative marketplace” for poultry farmers, diverting raw poultry litter from agricultural lands. Grain farmers will have access to organic nitrogen and struvite that will enable good crop yield without the nutrient run-off.

Benefits to Farmers: The Bio-conversion Project will pay poultry growers a fair market value for their poultry manure. As a result the Alliance Biomass Plants will have the following impacts on the Delmarva economy:

  • Independent poultry growers will achieve a separate source of income for poultry manure;
  • Poultry Growers in the program may choose to cease transporting their commodity outside of the Chesapeake Bay Watershed. Existing infrastructure such as manure barns can hold excess poultry litter, until the manure can be sold to the biomass plant for bio-conversion;
  • Grain and produce farmers will have access to fertilizer with separated organic nitrogen, and phosphorus;
  • Commerce at the biomass plants will help create green jobs, preserve agricultural jobs, and enhance the economic and social fabric of the Delmarva agricultural community.

Over the long term, this solution, once adopted by farmers will contribute to less nutrient run-off and the avoidance of greenhouse gases from decomposing manure.

The first manure to energy plant using the BCS technology and engineered by CABE
Associates is being built in Inverell, Australia at an Abattoir beef production facility.
The Plant, funded in part by the Australian government, bio-converts biomass into energy and fertilizer components. This Plant is similar to the Alliance Plant in Delmarva, under development by EDEN and CABE using poultry manure as feedstock.