How to Turn Low Value By-Products into High-Value Compost
The promise of anaerobic digestion lies in its conversion of waste to biogas, but the reality is more complex. The majority of what’s produced isn’t energy—it’s wet, unstable digestate. Despite making up 90% of the outputs by weight, digestate is often overlooked and misunderstood in the economic models of anaerobic digestion.
Digestate is nutrient-rich, containing high levels of unstable phosphorus and ammonia nitrogen. While holding potential, these same nutrients can also be environmentally problematic. In some jurisdictions, such as Texas, land application of digestate is prohibited without costly pre-treatment to remove nutrients, volatile compounds, and pathogens—a regulatory approach increasingly reflected across North America as standards align with European best practices.
Even where land application is allowed, digestate’s high moisture content and low stability create logistical and environmental hurdles. Transporting and applying a wet, heavy material over limited seasonal windows adds substantial cost and operational complexity. Moreover, raw land-applied digestate continues to emit methane and nitrous oxide—two potent greenhouse gases—if it hasn’t been biologically stabilized.
Aerobic composting is the most economical way to stabilize and create a high value by-products from the solid fraction of digestate. The controlled composting process destroys methanogenic microbes, breaks down compostable packaging, converts unstable nutrients into stable organic forms, and produces a lightweight, pathogen-free compost that holds real market value. When properly engineered, composting transforms digestate into a high-value soil amendment that farmers and landscapers actively seek (Source)
“... enhanced collaboration between AD operators, composters, and packaging manufacturers, along with supportive policy changes favoring hybrid models and promoting source separation, are crucial for successful implementation.”-Anaerobic Digestion and Compostable Packaging” (2024). (Source)
Common Approaches to Digestate Management
Before we get into this, let us quickly define digestate as the semi-solid and liquid residual material left after the anaerobic digestion of organic feedstocks such as food waste, manure, and agricultural residues. It is often separated into a solid fibrous fraction rich in lignin and cellulose, and a liquid fraction high in ammonium and other unstable nutrients.
This comparison is primarily focused on treatment of unseparated or solids fraction of digestate as it makes up the majority of the waste stream. That said, liquid fraction can undergo a variety of standalone treatments such as struvite precipitation, ammonia stripping, or membrane filtration to remove high value nutrients such as nitrogen and phosphorus.
Land Application of Digestate involves spreading raw or dewatered digestate on agricultural fields. This method recycles nutrients but has limited value because of high transport costs, fertilizer quality (unstable nutrients, pathogenic and toxicity), odors, and greenhouse-gas emissions from continued anaerobic activity in the soil (Source). In addition regulatory restrictions are increasing as concerns about nutrient runoff and pathogens grow.
Wastewater Treatment of Digestateinvolves sending liquid digestate to municipal treatment plants for final processing. Although convenient, this option is expensive and shifts the nutrient burden downstream, offering no material recovery. Nitrogen and phosphorus are typically lost through effluent discharge unless they have tertiary treatment and contaminate the rivers and oceans they discharge into, making this a low-value, short-term solution.
Landfilling Digestate offers a simple disposal route but is the least sustainable and most costly option. Its high moisture content increases transport and tipping costs, while anaerobic conditions in landfills promote further methane and nitrous oxide emissions, negating the climate benefits of digestion, and leading to no nutrient recovery. Nutrient-rich leachate also burdens landfill leachate systems. With organics disposal bans expanding, landfilling digestate is increasingly restricted and economically impractical.
Incinerating Digestate combusts it at high temperatures to destroy pathogens and reduce volume, achieving up to 90% mass reduction. However, the material’s high moisture content makes it energy-intensive to burn. The remaining ash often contains heavy metals and must be landfilled or treated. Incineration may serve as a last-resort option for contaminated digestate streams but offers no nutrient or resource recovery.
Thermal Drying and Pelletizing Digestate Thermal drying uses externally supplied heat - often from Combined Heat and Power (CHP) or biomass systems - to reduce moisture below 15%, followed by palletization. The resulting granules are stable, odor-free, and transport-efficient, serving as organic fertilizers or renewable fuels. This approach achieves up to 80% weight reduction and full pathogen destruction but demands significant energy and upfront investment. In addition, the pellets become biologically active again when rewetted, leading to issues of emissions common to land application.
Bio-drying and Pelletizing Digestate Bio-drying relies on microbial heat from aerobic composting to lower the digestate’s moisture to about 30%. At this point excess heat from the digestion process or other input heat is used to further dry the material to 15 to 20%. Once dried, the digestate can be mixed to create various soil blends prior to being pelletized. Compared with thermal drying, bio-drying consumes far less energy and produces a clean, stable product. While new, this solution has been successfully piloted by our partners, creating high value digestate / biochar fertilizer blends that can be sold at a premium.
Composting Digestate is an effective strategy for converting a low-value byproduct into a high-value soil amendment while improving both environmental and operational performance at an anaerobic digestion (AD) facility. Finished compost is widely recognized and easily marketed—whether sold in bulk, bagged, or pelletized formats. The composting process relies on aerobic microbial activity, which generates sufficient heat for pathogen destruction and bio-drying with minimal external energy input. In many cases, this microbial heat can even be captured and reused on-site, reducing facility energy costs.
The Case for Composting: Valuable outputs, mass loss, compostable package degradation, and environmental benefits.
Unlike compost, raw digestate has no established market, making it difficult to dispose of or sell. Variability in product quality, pathogen content, nutrient stability, and maturity discourages processors from accepting raw digestate. As a result, facilities often face steep trucking costs and negative or minimal revenue from disposal.
“With the focus on biogas and RIN (renewable identification number) credits, little attention has been paid (in the USA) to the value of digestate, and U.S. digestate markets remain underutilized. The liquid fraction of digestate contains high nutrient value as fertilizer for agriculture crops, but most anaerobic digestion facilities do not sell their digestate. Conversely, the separated digested solids are not considered a finished product and require further maturation (e.g., via composting) to meet regulatory standards for use. As such, digestate currently has little monetary value in the U.S. and is only marginally composted.” -Anaerobic Digestion and Compostable Packaging (2024)." (Source)
Studies have shown that composted digestate delivers significant agricultural benefits, producing 40% to 100% greater yields compared to raw digestate or inorganic fertilizers (source). Aerobic composting also achieves substantial mass and moisture reduction—often cutting trucking costs nearly in half.
From an environmental standpoint, composting stabilizes the material and prevents fugitive emissions by converting anaerobic matter into an aerobic process. This reduces methane off-gassing and ammonia volatilization (Source). The process also eliminates pathogens, lowers runoff risk, and produces a stable humus that is not phytotoxic (Source).
Operationally, aerobic composting systems are simple, robust, and low-maintenance compared to the sensitive biology of co-digestion systems, which require narrow pH and temperature control. Composting also helps AD facilities manage seasonal fluctuations in feedstock supply. Digesters must operate at roughly 80% of maximum capacity to remain economical—an ongoing challenge as organic waste volumes vary throughout the year. A co-located composting system provides flexibility, allowing the digester to be sized for average rather than peak tonnage.
Not all feedstocks are equal when it comes to anaerobic digestion. Digesters favor homogenous, energy-rich materials with high volatile solids and low lignin—such as de-packaged or pre-consumer food waste, grease trap waste, and manure slurries. In contrast, materials like compostable packaging, green waste, and woody debris offer little to no biogas potential but perform exceptionally well in aerobic composting.
Compostable packaging in particular presents challenges for digesters. Designed to break down under sustained thermophilic, oxygen-rich conditions, compostable packaging often passes through digesters intact, clogging equipment and ultimately ending up in a landfill. In contrast, a composting process will fully degrade these materials, creating circularity for an increasingly large part of our waste stream.
“While large-scale anaerobic digestion holds promise for specific organic waste streams, research by the Composting Consortium suggests it may not be a viable solution for processing compostable packaging in the United States, at least not on its own. Several factors contribute to this limitation”- Anaerobic Digestion and Compostable Packaging” (2024). (Source)
Fresh digestate remains in an anaerobic state, actively releasing methane, nitrous oxide, and carbon dioxide once removed from the digester. These fugitive emissions can be significant, fully offsetting the carbon credits the digester would otherwise generate.
To mitigate these emissions, digestate should be transitioned to an aerobic state either before it leaves the digester or immediately after. The most effective way to achieve this is by introducing large volumes of oxygen into the material to establish aerobic conditions (Source). When done properly, this halts methane generation and prevents further emissions even after land application.
Field application of raw digestate, by contrast, often leads to substantial methane and nitrous oxide emissions—gases that together account for roughly 88% of agricultural greenhouse gas output (source). Controlled aerobic composting offers a clear alternative, reducing both methane and nitrous oxide during storage and following application. This approach minimizes environmental impact while retaining nutrients that might otherwise be lost through volatilization or runoff (source).
Economic Comparison: Composted vs Land Applied Digestate
Let’s consider a hypothetical but realistic scenario comparing an AD facility that produces 100,000 tons per year of digestate. Below is a quick summary of key financial factors if they land-apply the raw digestate, or if they compost the digestate using a simple TAP process and sell it for the minimum market rate for bulk compost.
Land application of digestate assumptions:
- The AD facility needs to cover the cost of transportation.
- There is no disposal cost for the raw digestate aside from trucking.
- The land application happens within an average of a 100 mile distance from the AD facility. (200 miles round trip).
- 20 tons of digestate per truck load (5,000 truckloads a year).
- Trucking Cost $2.50 per mile (cost of truck, fuel, driver).
Annual COST of land applying digestate: $2,500,000 USD
On-site composting of digestate Assumption
- Capital Expense to build an outdoor turned aerated pile composting facility managing 100,000 TPY: $5,000,000 USD or 430,000 USD a year on twenty year loan
- Annual Operating Cost to run that composting facility: $500,000 USD
- Finished compost volume produced annually 100,000 cubic yards or 50,000 tons.
- Minimum net market value for the finished compost: $15 per cubic yard
- Annual compost sales revenue: $1,070,000 USD.
Annual PROFIT from composting digestate: $570,000 USD
As illustrated in this example, provides over $3,000,000 USD per year in greater economic value. In addition, it provides greater access to other value sources (carbon credits and waste streams with compostable packaging) while future proofing the operation to regulatory changes.
Designing Around the Challenges of Composting Digestate
Digestate is wet, heavy, anaerobic, high in nitrogen, and low in volatile organic solids. In other words, raw digestate cannot simply be placed into a windrow or even a basic aerated static pile (ASP) and expected to compost effectively. Fortunately, best management practices have consistently shown that, with proper design and process control, excellent compost can be produced from digestate.
During anaerobic digestion, roughly 55% of volatile solids are destroyed to create biogas (Source). These same volatile solids are also the fuel for composting, creating challenges with sterilization and drying during the composting process. This problem becomes more pronounced the wetter and more compact the material is.
Depending on the digester technology, raw digestate moisture content can exceed 90%. Composting requires feedstocks below about 65% moisture to maintain adequate aeration and biological activity. Low volatile solids further limit the material’s ability to self-dry, while low porosity compounds these aeration challenges.
Digestate is also highly nitrogen-rich and carbon-poor, typically around a 10:1 C:N ratio. To achieve the ideal microbial balance of at least 20:1, additional carbon sources—such as wood chips, green waste, or agricultural residues—must be added. These bulking agents not only provide structure and porosity but also help lower the initial moisture content to a compostable range.
Bio-drying and composting can occur at lower C:N ratios, but insufficient carbon slows microbial degradation and increases nitrogen loss as ammonia gas. This leads to reduced nitrogen retention in the final compost and also higher infrastructure costs due to slower degradation - the more time something takes to compost, the more space it requires, driving up cost.
Fresh digestate emits most of its ammonia during the first two weeks of composting, often overwhelming undersized or improperly designed biofiltration systems. To address this, an acid scrubber should be installed upstream of the biofilter to reduce ammonia concentrations to below 100 ppm. This not only protects the biofilter but also allows nitrogen to be captured as ammonium sulfate, phosphate, or nitrate—valuable byproducts that can be reused in composting or sold as liquid fertilizer.
Most of these challenges are “recipe-based” and can be solved through careful blending and handling to ensure the compost feedstock has the proper carbon-to-nitrogen ratio, moisture, and bulk density. For this reason, AD facilities should incorporate carbonaceous materials—such as woody debris or green waste—that bypass digestion and feed directly into composting. These materials are typically high in lignin and produce little to no biogas, so no energy value is lost by diverting them, while significantly improving the composting process.
Woody materials, often referred to as “bulking agents” in composting, are recovered in the oversized fraction as finished compost is screened. These “overs” can be mixed with fresh digestate, further reducing the bulking agent requirements, while creating circularity at the facility.
Active process management is also critical. Regular turning and controlled aeration maintain aerobic conditions, enhance microbial heat generation, and ensure pathogen destruction and moisture reduction. Without these controls, emissions rise sharply, potentially triggering Title V permitting or jeopardizing carbon credit eligibility. They also speed up the composting process, helping operators create a higher quality compost in less time, driving down capital and operational expenses in the long run.
Geomembrane-covered ASP systems (cASP) are generally discouraged for composting digestate because they trap moisture and ammonia, worsening odor and emission issues (Source 1, Source 2). If odor and emissions control is essential, the composting process should instead be put into a building or tunnel to capture and treat emissions.
When properly managed, digestate compost can quickly achieve PFRP (Process to Further Reduce Pathogens), and other pathogen destruction standards. Depending on feedstock characteristics, the composting process can be completed in as little as three weeks, producing a stable, dry, high-value product.
GMT's Approach to Composting Digestate
At facilities that require high emissions and odor control, we start the process in CompoBox tunnels.These systems provide precise control over aeration, temperature, and moisture, ensuring that the odors and emissions associated with fresh anaerobic digestate are stripped and treated before entering the environment.
When paired with an acid scrubber on the exhaust system, CompoBox systems can achieve over 99% ammonia removal. The stripped ammonia is converted into ammonium sulfate, phosphate or nitrate — a high-nitrogen fertilizer that can be captured and sold, or reintegrated into the composting process at a later stage.
After two to three weeks in the the CompoBox Tunnels, the majority of the emissions have been scrubbed and the material is ready for a secondary maturation process in a Turned Aerated Pile (TAP) system.
TAP combines mechanical turning with controlled aeration, offering a simple composting methods that effectively address most challenges associated with digestate composting. Regular turning enhances microbial activity and generates heat, compensating for the digestate's low residual energy. Forced aeration maintains aerobic conditions even in wet, dense material.
TAP systems prevent compaction by regularly fluffing the pile, maintaining oxygen flow and porosity, allowing operators to compost more digestate with less supplemental bulking agent. They also facilitate easy integration of bulking agents and carbon sources to achieve the desired C:N ratio. Facilities that don't require stringent odor and emissions control can put digestate directly into a TAP system, lowering capital costs dramatically.
Conclusion
In summary, pairing advanced composting infrastructure with anaerobic digestion facilities creates a powerful synergy. Composting transforms digestate—a material that’s otherwise heavy, unstable, and low in value—into high-quality compost, soil blends, or fertilizer pellets that can command $50 to $500 per ton depending on how they’re marketed. By contrast, raw digestate often incurs disposal costs rather than generating revenue.
Anaerobic digestion systems are capital-intensive—typically requiring around ten times the investment per ton of capacity compared to composting. That makes it especially important to reserve AD capacity for high-energy feedstocks like food waste, de-packaged waste, and manures. Lower-energy materials such as green waste, wood, or compostable plastics are better suited for composting, particularly when mixed with digestate to create an excellent finished product. Because digestate tends to be wet, dense, and carbon-poor, it benefits from bulking agents and controlled aeration technologies that ensure proper composting dynamics.
In regions with strict air quality regulations or close neighbors, a 14-day enclosed “tunnel” composting phase can effectively manage emissions and destroy pathogens before moving material to an aerated pile for finishing. In less constrained settings, open turned-aerated systems (TAP) can efficiently produce a stable, high-value compost.
Ultimately, composting digestate is not just a smart waste management solution—it’s a way to unlock greater economic and environmental value from anaerobic digestion. For too long, the AD and composting industries have operated as competitors in North America. But when these two systems work together, their combined impact is far greater than what either can achieve alone.
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