West Michigan digester to close doors amid permitting conflict with state

An anaerobic digester in West Michigan is set to shutter its operations by the end of the month, following a shift from state regulators on the byproducts produced by the facility. 

Bill Caesar, president of Generate Upcycle — which operates the Fremont Regional Digester in Fremont, MI — says it will close its doors by the end of December unless it can reach an agreement with the state regarding the use of its digestate as liquid fertilizer.  

According to the United States Environmental Protection Agency, anaerobic digesters like the one in Fremont use bacteria to break down organic matter like wastewater, biosolids like sewage sludge, food waste and other organic materials. These materials are digested in a sealed vessel to produce biogas, which can be used like natural gas for energy production, and digestate, which can be applied to farmland as fertilizer, among other uses. 

The Fremont facility provides 17 jobs, pays $100,000 in tax revenue into the local community, and generates enough energy to power 3,500 homes according to a factsheet from the company. It also recycles 150,000 tons of organic waste every year, keeping it out of landfills. 

Generate Upcycle acquired the digester in 2017, and worked with the Department of Environment, Great Lakes and Energy’s Solid Waste Division until December 2021, when the company received notice that the Water Resources Division would be taking over regulation of its digestate. 

While the facility previously operated under an agricultural use authorization allowing them to apply their digestate to land through the state’s solid waste program, the water quality division would have the company operating under a different framework. 

Caesar argued the new legal requirements for its digestate were designed for industrial pollutants, however EGLE Director Phil Roos contested this notion in a letter dated Nov. 30, saying “The statutory obligations being discussed with your company appropriately apply to a large variety of operations, including anaerobic digesters.” 

“The new approach will require extensive changes in how, when and where we apply digestate, as well as forcing the farmer partners whose land we use to essentially become our subcontractors. …Not only are the proposed changes to our permit prohibitively expensive, because huge portions of the fields we currently use will be off limits, but these regulations are also operationally impossible for us to comply with,” Caesar said.

“After months of discussion with legal we made the very difficult decision to cease operations at the end of December unless and until it can operate under a rational regulatory approach,” Caesar said.

While the company has been allowed to continue operating under an agricultural use approval — and has been offered an additional extension through March 21, 2024 — Generate Upcycle can only apply its digestate at certain times of the year, Caesar said, before and after harvest. 

Building up digestate over three months for application in the Spring without clarity on the regulations is “unacceptable,” Caesar said. 

“I don’t think that we’re going to find a solution with the approach that EGLE has propositioned us with.… I could continue to take extensions, but it won’t solve the problem and I will have an unbounded financial risk,” Caesar said.

Rather than operate under the groundwater discharge permit required by EGLE, Generate Upcycle is instead asking the Michigan Department of Agriculture and Rural Development (MDARD) to act as the regulator for its digestate.

MDARD regulates more than 600 manufacturers and distributors of fertilizer, soil conditioner and liming materials for farm and non-farm use.

Generate Upcycle’s request to classify its digestate as organic fertilizer would fundamentally change the permitting approach pursued by EGLE, the department wrote in its Nov. 30 letter. 

While Generate Upcycle has not held a formal meeting with MDARD, it has expressed interest to EGLE in registering its digestate as a fertilizer. 

According to Roos’s Nov. 30 letter, Generate’s digestate does not meet MDARD’s fertilizer standards. 

“While Generate had not formally requested a decision from MDARD at that time, it was discussed that the digestate does not contain nutrient value at the application rate required to meet required standards in respects to biological oxygen demand,” Roos said. 

“Generate is welcome to make a formal submission for a determination of whether the digestate can be licensed as a commercial fertilizer. However, if this information is correct, the material would not qualify as a fertilizer,” Roos said. 

When asked what had changed regarding the facility’s agricultural use approval, Roos responded that EGLE was asking its teams many of the same questions. 

“While we do not currently fully understand the decisions the previous administration made regarding the [agricultural use approval’s] applicability, we are trying to understand the facility’s regulatory history… Understanding the historical, regulatory decision-making associated with your facility is of interest to both EGLE and MDARD, however it does not change the underlying situation we are working through today. Generate’s operation no longer qualifies for management under an [agricultural use approval],” Roos said. 

Facilities operating under an agricultural use approval usually operate under limited oversight with infrequent inspections, Roos said. However odor complaints and runoff concerns from the application of the Fremont digestate led to closer scrutiny and the determination that the facility’s liquid digestate could not be legally authorized for land application through the solid waste program.  

According to the facility’s website, it has worked with state regulators and community members to address odors at its facilities as well as implementing deodorizing measures for its trucks. Digester staff also conduct multiple odor surveys daily, alongside daily third party odor surveys.

Twelve of the digester’s customers submitted a letter of support for the facility on Nov. 16, including individuals from Gerber Products Co., and multiple waste management companies.

Caesar also noted the role the digester plays in helping Michigan to meet its climate goals. 

The Fremont Regional Digester could be considered a renewable energy source under a recently signed bill requiring electrical companies to reach a 100% clean energy portfolio by 2040. 

“What we’re being asked to do in Michigan is so different from every other location where we operate.… While Michigan is a very special place, we don’t have any reason to believe that the management of the digestate needs to be so much different than what it is elsewhere,” Caesar said.