Producing biomass: Biomass types: Animal waste: Dairy waste
Dairy shed effluent/wastewater or manure from dairy cows can be converted into biogas (a renewable energy source consisting mostly of methane and carbon dioxide), liquid fuel and/or nutrient-rich solids. Biogas can be burnt to generate electricity and heat, upgraded into a transport fuel (biomethane) and can yield other useful products. Using simple bacteria to break down waste in oxygen-free (anaerobic) conditions is a process called anaerobic digestion. Anaerobic digestion in lagoons or ponds is the most common method used to process dairy waste to create biogas.

Current effluent/manure management

Dairy shed effluent/wastewater, which contains urine and dung and may contain wash water, chemicals, residual milk, waste feed or bedding, and rainwater.Urine and dung that dries before being collected is handled as a semi-solid or solid and called manure.Most dairy owners dispose of dairy effluent and/or manure by collecting waste in a solids separation trap or gutter, then:
  • draining that waste to a lagoon or pond to be digested by microorganisms to ‘clean’ it of organic solids, and burning off the methane that is released
  • diverting the waste to a land application area
  • putting solid waste to a storage pile for composting on a concrete pad or, rarely,
  • using a wetland for treating the waste.
From there, they spread solid or spray liquid waste onto land as fertiliser, or use the relatively clean effluent from lagoons as irrigation water. What Australia does with its animal waste is described in the 2008 report: Animal waste management country specific profile: Australia [PDF 60 KB, page 4].

Benefits of using effluent/manure for bioenergy

Instead of burning off the methane or using it as compost/fertiliser, dairy farmers can choose to capture the methane from lagoons/ponds (and turn that into electricity or heat), or use the waste to produce liquid fuel. Using dairy waste to create bioenergy has many benefits, such as:
  • reducing the amount of waste that needs to be disposed of
  • recovering energy from waste
  • reducing odour problems
  • reducing potential for groundwater contamination
  • giving a use to waste that previously had little or no market or environmental value
  • reducing water use by reusing washing water for the plant/lagoon
  • generating income from waste/diversifying income sources
  • moderating the impacts of commodity prices
  • killing harmful bacteria, flies and weed seeds normally in and around manure
  • converting organic nitrogen into a form available to be used by plants.
Some of these benefits are described in the paper Livestock waste-to-bioenergy generation opportunities [PDF 322 KB, page 7941–2].

Evaluating the economics

The typical costs and viability of using covered anaerobic ponds for dairy waste [PDF 1.6 MB] from Australian and US experiences are described by Dairy Australia. If you are considering installing lagoons to capture and use the methane generated, refer to the detailed economic considerations/risks and recommendations outlined in Australian Pork Limited’s draft Code of practice for on-farm biogas production and use (piggeries) [PDF, 1.7 MB]. While it is written for piggeries, the following areas are relevant to dairies:
  • selecting the right type of equipment
  • laying a plant out
  • best storage methods.
An assessment of methane capture and use from the intensive livestock industry published by AgriFutures Australia:
  • explores the viability of methane capture and use systems for the Australian intensive livestock industry
  • reviews existing manure methane systems from intensive livestock industries operating within Australia and overseas
  • presents technologies that are best suited for capturing methane in the Australian context.
Some projects will only be viable if they also sell the dewatered, digested solids produced as a by-product. Large, intensive livestock operations may be able to partner with nearby coal-fired power stations or cement works for co-combustion (where the waste would be burned with coal); however this usually isn’t feasible for effluent, which is heavy and expensive to transport. Using animal waste for biogas is the subject of 14 international case studies described in: The generation of biogas on-farm using animal and dairy waste [PDF 752 KB]. Cost-benefit analyses and technical specifications are covered. Using methane in intensive livestock industries outlines many different effluent-treatment options, including costs (see pages 22–29). The report was published by AgriFutures Australia in 2008.

Converting dairy waste to bioenergy

Dairy effluent/manure can be turned into bioenergy through two processes.
  • Biological processes
    • uses anaerobic processes or microorganisms
    • produces biogas, liquid fuel and nutrient-rich solids
  • Thermochemical processes
    • uses heat or chemicals
    • produces biogas, hydrocarbon fuel (bio-oil) and charcoal.
These processes are described in more detail on a Victorian Department of Primary Industries webpage, and in much more detail in a paper about bioenergy opportunities from livestock waste [PDF 322 KB].

Anaerobic digestion

Dairy farmers already use anaerobic digestion to treat waste, so it is the most commonly used process for producing bioenergy. It uses simple bacteria to break down waste in oxygen-free conditions (anaerobic) to produce biogas and nutrient-rich solids. You can use biogas, solids and cleaner waste water for:
  • heating or electricity, by burning biogas in a boiler, heater or engine
  • natural gas, by further processing the biogas
  • fertiliser, by using the ‘undigested’ solid remains
  • irrigation, by using the water separated from the solids.
Anaerobic digestion is possible using:
  • a ‘lagoon’ or pond that holds effluent, covered with an airtight cover that collects biogas
  • ‘complete mixed’ digestion in heated above- or below-ground tanks full of effluent
  • ‘fixed film’ digestion in a tank packed with materials that the microorganisms grow on
  • ‘plug-flow’ digestion in heated underground tanks, where effluent is put through semi-regularly.
Effluent quality and volume, temperature, pH, and time all affect how much biogas is produced by anaerobic digestion, and can be carefully controlled to increase production. Suitable types of anaerobic digesters, yields of biogas, and costs/benefits [PDF 215 KB], compared to conventional alternatives, are detailed in Chapter 8.1 of a Dairy Australia report from 2008. You can also read about: Instructions about how to use a pond for anaerobic digestion of effluent [PDF 540 KB] are given in a fact sheet from Dairying for Tomorrow. Read about supply, infrastructure requirements, costs, incentives and managing risks of anaerobic digestion ponds [PDF 1.4 MB] in a Dairy Australia fact sheet. Although for piggeries, Australian Pork Limited’s draft Code of practice for on-farm biogas production and use [PDF, 1.7 MB] focuses on on-farm, covered anaerobic digestion in Australia, based on international best practice, and is very detailed about logistics of setting up and running a plant. The report offers guidelines for:
  • designing and constructing a biogas plant
  • being safe around biogas
  • using and storing biogas
  • training people
  • managing risks
  • managing flares, air, noise, odour and effluent
  • operating and maintaining the plant.


Putting waste in specialised tanks/containers with microorganisms produces hydrogen [PDF 183 KB], which can be burnt for heat/electricity. The microorganisms include:
  • algae, using photosynthesis
  • bacteria, using fermentation in lit conditions
  • bacteria, using fermentation in the dark.

Thermochemical methods

Heat or chemical processes also exist for converting waste to energy: pyrolysis, gasification and direct liquefaction. Two of these may be suitable for your dairy waste:
  • Pyrolysis: heating waste to very high temperatures without oxygen to form solid (biochar), liquid (bio-oil) and/or gases (syngas) depending on the speed and temperature of the process. The gases and compounds in the liquids can be used to generate bioenergy.
  • Gasification: heating waste to high temperatures with a limited supply of oxygen so it is only partly burnt and produces syngas and a small amount of biochar.


David Hall

Energy Developments and Resources (EDR)

4 Glenneth Court, Bonny Hills NSW 2445,
Phone: +61 (0)2 6585 5368
Heather Bone

RebusJ Sustainability

50 Willowvale Drive, Willow Vale , Queensland 4209
Phone: 0400473733
Quantum Power


ADI Systems Asia Pacific Ltd

ADI Systems Asia Pacific

83 Castle Street, Dunedin, New Zealand, 9058
Phone: 1 800 751 806
Protected: Murray Goulburn Co-operative Ltd – Leongatha

Murray Goulburn Co-operative Ltd

18 Yarragon Road, Leongatha, Victoria, 3953,
Phone: 03 5662 9666

Liz Hamilton

Victorian Bioenergy Network

Geelong Victoria 3220,
Phone: 03 5235 8324