Blue Sphere is planning to enter the new business in the US agricultural community to reduce methane gas generated by livestock manure and to generate energy from it and in the process generate carbon credits and energy in agriculture.

Manure that is treated in a digester is broken down or digested by billions of naturally occurring bacteria known as methanogens and they convert the carbon in the manure to methane gas, a greenhouse gas that is released into the atmosphere.

Carbon credits from animal farms can be generated by capturing and flaring out the methane gas or by cleaning the methane and putting it through a pipeline creating an alternate and renewable source of energy which prevents the methane from entering the atmosphere.

Blue Sphere has identified a few potential partners in the agriculture industry in the US and further due diligence is being done to create a partnership to take advantage of the upcoming cap-and-trade program.

The Obama administration is developing a cap-and-trade program under which, the government sets an annual cap on carbon emissions. President Obama’s budget calls for a cap 14% below 2005 emission levels by 2020 and 83% below 2005 emission levels by 2050.

To assist affected firms, the government will issue a fixed number of credits for emissions under the cap. President Obama proposes to auction off these credits and the money that will be collected from the initial sale of carbon credits – $78.7bn in the first year (2012) – is included in the president’s federal budget.

To offset some of the burden of the program, the president proposes to use some of the auction revenue for tax relief. Approximately $15bn a year will be used to fund research on new clean-energy technology. A $400-per-person tax credit also is being proposed to help individuals defray the higher energy costs that are expected.

Shlomi Palas, CEO of Blue Sphere, said “We have set up a US subsidiary and we are considering potential partners at agricultural businesses to implement a methane reduction and energy producing project and possibly create a source of renewable energy.

”The Obama administration has set targets for carbon emission reduction and Blue Sphere is poised to provide the project management to assist in emission reductions. We have international clients and the ability to potentially trade carbon credits with our European customers means we are positioned to ensure our clients in the US get the best price for their carbon credits.”