In March 2023, I was honored to attend a ribbon-cutting ceremony for two renewable natural gas facilities in the Greater Phoenix area, marking the growth of sustainability in the Valley of the Sun. This milestone, achieved in collaboration with Avolta Development, a renewable natural gas developer, and the Butterfield and Milky Way dairies, is a testament to the power of private enterprises empowering communities to build a greener and economically vibrant future.
At the heart of these projects is anaerobic digestion technology — the extraction of energy from dairy manure and waste products in the form of biogas, predominantly composed of methane and carbon dioxide. According to the American Biogas Council and HomeBiogas, digesters like these produce a low-carbon energy source that offers numerous economic and environment benefits, including removing the harmful effects of land-applying manure and waste from landfills and open retention ponds, preserving waterways, and creating enriched organic fertilizer as a byproduct, which farmers can then use to enhance crop growth. These digester and gas treatment systems serve as an industrial power, energy and composting solution.
The pace of digester construction has taken a giant leap forward over the past year following the passage of the Inflation Reduction Act, which, for the first time, extended investment tax credits to projects that generate green gas (e.g., biogas). The biogas incentive is critical to meeting our nation’s goal of reducing carbon emission by 40% by 2030, according to the U.S. Department of Energy. This increase in renewable energy projects has allowed Pathward®, N.A. to leverage its lending platform with support from the USDA Rural Energy for America Program and Business & Industry loan guarantee programs, including financing of the two Avolta renewable natural gas projects (including anaerobic digesters). Avolta is capturing 99% of the methane produced from the anaerobic digestion of more than 60,000 cows and is capable of delivering more than 675,000 MMBTUs per year of negative carbon fuel into the California transportation market. This equates to removing 8,000 cars from the road annually and producing enough renewable natural gas to power 6,500 homes annually, according to EPA’s greenhouse gas equivalencies calculator.
Avolta shared that the projects have generated hundreds of construction jobs within the community and optimized waste management solutions by reducing the consumption of fresh water through water treatment systems and closed-loop recycling processes. These systems exemplify the potential for renewable technology to benefit both economic growth and environmental responsibility, especially in water-conscious states like Arizona.
As Greater Phoenix takes center stage in this pioneering initiative, this collaboration stands as a testament to what is possible when businesses, financial experts and rural communities unite for a common goal: a future where economic prosperity and environmental sustainability coexist seamlessly.
Jon Ellis is the vice president of Alternative Energy Finance within the Structured Finance team at Pathward. Ellis seeks alternative energy lending opportunities across various industry sectors and speaks widely at conferences and universities across the country on how to successfully finance renewable natural gas projects.
