Dairy Distillery's process can turn milk byproducts into ethanol. (David Paul Morris/Bloomberg via Getty Images//iStock//Dairy Distillery)
"Traditionally it’s been used as an additive to animal feed and there’s very little profit margin in that," Diglio said.
Dairy Distillery can take this and ferment it into ethanol, which makes it a more valuable product.
"Fermented lactose goes back to the time of Genghis Khan, who would drink kumis, fermented mare’s milk," Dairy Distillery founder Omid McDonald said.
The MMPA ethanol factory will be adjacent to its dairy. (Dairy Distillery)
The $41 million factory will be built adjacent to the MMPA dairy in Cosntantine, Michigan, and produce up to 2.2 million gallons of ethanol annually from 14,000 tons of permeate whey.
"The facility will be co-located on the same campus, with the permeate piped from the dairy to the distillery," McDonald said.
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Unlike the Vodkow, which still has a hint of milk flavor, the motor fuel is 100% ethanol and identical to that made from other sources.
The factory is set to begin production in 2025 and will sell the ethanol to local blenders through brokers, which opens up a much larger market than vodka sales could support.
"We’ve gotten some interest from other dairy cooperatives around the country and think it can take off," Diglio said.
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McDonald said new factories can be built in about a year and a half and that their output can be scaled up quickly.
Gary Gastelu is Fox News Digital's automotive editor.