Milk Minute: Milk Vodka to Low-Carbon Ethanol

By Omid McDonald, Dairy Distillery Founder/CEO

Dairy Distillery was started with the idea of turning milk permeate into vodka (Vodkow). When building our distillery in Almonte, Ontario, I discovered that excess permeate is a problem for dairy processors in Canada and around the world. Permeate is produced when the proteins in whey (whey permeate) or skim milk (milk permeate) are concentrated. There are some high value uses for permeate, such as making laxatives and replacing sugar or salt in foods. However, with over 500,000 tonnes of permeate produced a year in the U.S., most is used for low value animal feed.

During my research, I found that several large plants were built during the oil crises of the 1970s to ferment whey permeate into ethanol (technical term for pure alcohol) to fuel cars. These plants were decommissioned after the oil crises ended since they couldn’t compete with high volume corn ethanol. With the focus on carbon reduction, I thought it was worth revisiting permeate fuel ethanol. Biofuels reduce carbon emissions by displacing sequestered carbon (oil) in transportation fuel. The net amount of carbon ethanol displaces depends on the carbon emitted to produce it (its carbon intensity). For example, corn ethanol must account for the carbon emitted to grow, fertilize and harvest the corn. The lower an ethanol’s carbon intensity, the greater its carbon reduction when blended with fuel. Ethanol made from milk permeate would have an ultra-low carbon intensity and the financial incentives would make it commercially viable.

I was introduced to MMPA following their research into ways that permeate could be utilized in a different, more value-added manner. Our conversations evolved into making low carbon ethanol using Constantine’s permeate. As part of the greater dairy industry, MMPA is committed to lowering its carbon footprint and Dairy Distillery’s low carbon ethanol would allow it to make a significant reduction.

To begin the process, we partnered with MMPA to design the technical and business model for a permeate fuel ethanol that would see Constantine’s 14,000 tonnes of milk permeate piped to a co-located distillery and transformed into 2.2 million gallons of low carbon ethanol. The distillery waste would be combined with Constantine’s existing dairy effluent and fed to a wastewater system. The wastewater system would produce methane to power the stills and make the remaining water safe for river discharge. The ethanol would be trucked to local fuel blenders and displace 14,500 tonnes of sequestered carbon a year. Working with MMPA’s customers, we found a way of classifying our carbon offset as a Scope 3 carbon inset to directly reduce the carbon footprint of Constantine’s dairy products. In addition to creating carbon offsets and managing Constantine’s waste, the ethanol plant would provide a good financial return to MMPA and Dairy Distillery.

With the due diligence and planning complete, we were thrilled when the MMPA board of directors approved moving forward with the project. We’ve been fortunate to get significant financial support from the state of Michigan and through the Inflation Reduction Act. We’re aiming to break ground later this year and have the plant operational for early 2025.

My hope is that Constantine will be the first of many permeate ethanol plans creating value for dairy farmers and significant carbon reduction. An amazing story that started with a shot of milk vodka.

This article was originally published in the May/June 2023 issue of the Milk MessengerSubscribe »