CONSTANTINE, Mich. – The Michigan Milk Producers Association (MMPA) and Canadian Dairy Distillery recently announced plans to construct a $41 million ethanol plant in Constantine, which officials said will transform 14,000 tons of milk permeate, a dairy byproduct, into 2.2 million gallons of ethanol annually.

“I’ve been inspired by Michigan Milk Producers Association dairy farmers and their commitment to sustainability,” said Omid McDonald, Canadian Dairy Distillery CEO, at the Aug. 6 groundbreaking ceremony for the new facility. “Our partnership with the Michigan Milk Producers Association represents a groundbreaking innovation in the dairy sector.”

When blended with transportation fuel, officials said the permeate ethanol will offset 14,500 tons of carbon a year, equivalent to 5 percent of carbon of the milk processed at Constantine.

Joe Diglio, MMPA president and CEO, said this partnership between the association and the distillery, called the Dairy Distillery Alliance, “marks a significant step forward in our sustainability journey.

“By transforming milk permeate into ethanol, we are not only reducing waste, but also contributing to a cleaner environment,” he said. “This project highlights our commitment to innovation and sustainable practices within the dairy industry.”

Production at the ethanol plant is planned for 2025. The Dairy Distillery Alliance was initially announced last spring, “marking the beginning of this groundbreaking partnership,” officials said.

“It’s a testament to the dedication of our members and partners in striving for a sustainable future,” Diglio said. “We are proud to lead this initiative that benefits the communities we all work and live in.”

When asked how this new project was started, Emily Kittendorf-King, MMPA communications manager, told Farm World, “Looking for a way to secure a higher value for milk permeate, a dairy byproduct, the Michigan Milk Producers Association reached out to Dairy Distillery interested in producing vodka.

“After initial feasibility studies, the project pivoted from vodka, which would have produced a volume too large to market, to ethanol, a great way to provide a low-carbon biofuel,” she said.

She said the mission of the Dairy Distillery Alliance project is a continuation of the MMPA’s mission “to market member milk to the greatest advantage possible.

“By upcycling (re-using in such a way as to create a product of higher quality or value than the original) a traditionally low-value dairy byproduct to a higher-value, low-carbon biofuel, Michigan Milk Producers Association dairy farmer members will benefit, along with the environment,” she said.

When asked about the process of transforming 14,000 tons of milk permeate into 2.2 million gallons of ethanol,” she said, “Milk permeate is a dairy byproduct leftover after the proteins in skim milk are concentrated through the ultrafiltration process. It is composed primarily of lactose, the sugar in milk.”

She said the process of transforming milk permeate to ethanol begins with transferring the permeate from the dairy plant to the distillery into fermentation tanks.

“In the tanks, yeast is added and the lactose from the milk permeate is fermented and distilled into 99 percent ethanol,” she said. “The ethanol is tested and shipped out to customers in bulk tanker trucks.

“With a high sugar content, milk permeate makes a great feedstock for alcohol production,” she added. “The lactose fermentation process was initially utilized during the oil crisis of the 1970s, and the Dairy Distillery team has spent the past several years further developing the process.”

The project received $2.5 million in funding from the Michigan Strategic Fund, showing the state’s commitment to the future of clean energy, said David Menoian, Pathward senior managing director of business development. Lending partners for this renewable energy project include Pathward®, N.A. (National Association), and CoBank.

“Pathward is committed to promoting environmental stewardship and contributing to community development,” he said at the groundbreaking ceremony. “One way the company does that is by financing renewable energy projects like the one breaking ground today.”

Mike Minnihan, CoBank vice president and lead relationship manager, said, “CoBank is excited to be involved in today’s event, and recognizes the growing demand for renewable energy solutions across rural America.”

John Berge, USDA Farm Service Agency acting deputy administrator, said “The efforts at Michigan Milk Producers Association and Dairy Distillery in Constantine, Mich., are a prime example of how innovation and partnership and collaboration can meet the important needs of expanding producer economic opportunities, providing a value-added product, and addressing the need for low carbon renewable fuels.”