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Environmental organizations want the government to stop subsidizing expensive machinery that converts manure to biogas on industrial dairy and livestock farms. The U.S. Department of Agriculture (USDA) gives millions in grants and guaranteed loans to manure biodigester projects through the Rural Energy for America Program (REAP). Over 30 environmental and farm organizations argue in a recent petition [ [link removed] ] that biodigesters, or digesters for short, are counterproductive and lead to more pollution in the rural communities they are meant to serve.
“The industry is interested in being able to profit from their pollution, not get rid of it,” argues Kara Goad, an attorney for Earthjustice who prepared the petition. “Helping operators build digestors just incentivizes them to generate more methane. To do that, they have to have more animals, more manure, which causes more air pollution, more water pollution.”
Last Friday, USDA put a 90-day pause [ [link removed] ] on all REAP guaranteed loan processing for digesters to investigate “elevated rates of project underperformance, loan delinquency and operational failure.” When asked [ [link removed] ] if this decision was in response to the petition, a USDA spokesperson told Waste Dive that the agency does not comment on active petitions.
Large hog and dairy farms generate massive volumes of waste, which are typically stored in manure lagoons. Liquified manure breaks down differently than a cow patty in the field; without access to oxygen, it releases methane, a potent greenhouse gas.
The petitioners note that there are many ways to manage manure to reduce or avoid these methane emissions, such as treating manure to make it more acidic, composting it, or aerating manure so it breaks down with oxygen.
Rather than reduce manure emissions at the source, more livestock operations seek to capture and convert their methane into energy by installing digesters. Digesters are very costly, and while they can reduce methane emissions, they are not perfect [ [link removed] ] and can leak [ [link removed] ]. Yet large livestock operations prefer digesters over other manure management systems because of state and federal programs that subsidize construction and make it lucrative to sell biomethane gas. “The explosion in digester adoption is coming in large part because state and federal governments are footing a chunk of the bill for digesters,” says Goad.
Farmers can tap into government programs that offset the cost of building biodigesters, including the USDA’s Rural Energy for America Program (REAP). The economics of digesters would not pencil out [ [link removed] ] without generous government subsidies. Construction costs run anywhere from $2 million to $12 million, and digesters often break down before they generate and sell enough gas to recoup those costs. One analysis [ [link removed] ] found that government grants typically covered 40% of the upfront cost of building a biodigester in California.
Manure digesters make money by selling the gas, but they make even more [ [link removed] ] generating and selling carbon credits [ [link removed] ]. Some states with carbon markets, most notably California [ [link removed] ], consider livestock biogas to be a carbon-negative fuel source because digesters can reduce farm methane emissions. Polluters in California can buy emissions reduction credits from farms with biodigesters. Since 2011, farm biogas projects have received more than $1.26 billion [ [link removed] ] from California’s low-carbon fuel program.
Building biodigesters creates a perverse incentive for farmers to produce more manure and methane, not less. Several [ [link removed] ] studies [ [link removed] ] find [ [link removed] ] that dairy farms with digesters expand their herds at higher rates. Larger farms and more concentrated manure pollute the [ [link removed] ] air [ [link removed] ] and [ [link removed] ] water [ [link removed] ] in rural communities, harming [ [link removed] ] public [ [link removed] ] health [ [link removed] ]. Farms still need to spread and dispose of manure after it goes through the digester, and this digestate byproduct releases more ammonia [ [link removed] ] than manure and contains more soluble pollutants [ [link removed] ], increasing the risk that they contaminate water. Digester malfunctions have leaked tens of thousands of gallons [ [link removed] ] of manure into rural waterways, resulting in unsafe levels of bacteria and ammonia.
Smaller farms that sustainably graze livestock and do not generate methane-producing manure lagoons cannot compete with large operations making money off biodigesters, especially dairy farms. The U.S. dairy industry has consolidated [ [link removed] ] dramatically [ [link removed] ] as smaller farms struggle with persistent low milk prices. When carbon credit prices are high, some dairy farms can make more money [ [link removed] ] selling biogas and carbon credits [ [link removed] ] than selling milk. In effect, milk becomes a byproduct of manure production.
A study [ [link removed] ] by the Union of Concerned Scientists found that only the largest dairy operations stand to benefit from biodigester subsidies and that California’s low carbon fuel standard “creates clear market distortions in favor of large, confined operations, which could exacerbate the already-present trend of market consolidation.”
Environmental organizations have asked government programs to re-evaluate their support for digesters. Four groups petitioned [ [link removed] ] California to remove farm biogas from its renewable fuel standard. Last week, a coalition of over 30 organizations including Friends of the Earth, National Family Farm Coalition, Food & Water Watch, and Farm Aid, petitioned [ [link removed] ] USDA to bar biodigesters from receiving REAP dollars.
Congress created REAP in 2002 to give grants and government guaranteed loans to farms, rural small businesses, and rural utilities to build renewable energy systems or install energy efficient equipment. REAP seeks to lower energy costs for rural businesses, create rural clean energy independence, and combat climate change.
Petitioners argue that digesters harm rural economies by contributing to farm consolidation and polluting rural environments with more livestock manure. Petitioners also argue that expensive digesters are an inefficient use of limited REAP dollars.
Between 2021 and 2025, 8% of REAP funding went to support just 55 manure digester projects. The average REAP grant award for a new manure digester was $855,701 (near the program’s $1 million grant maximum [ [link removed] ]), and the average REAP digester loan guarantee was over $19 million. By contrast, the average REAP grant award for new solar or wind projects over this same period was $131,480 and $95,202, respectively. The average loan guarantee for solar projects was $6.4 million (and no wind projects received guaranteed loans).
In other words, for every one digester project that REAP funded, it could have funded three to six solar or wind projects. In most cases, solar projects also provide a bigger bang per taxpayer buck. According to the petition, manure digester projects that received government-backed loans generated 4.5 times less energy per REAP dollar than REAP solar projects.
USDA receives more applicants for REAP money than the agency can fund. Given these high demands for limited resources, petitioners argue that digesters take in too many subsidies for too little gain.
USDA appears receptive to the petition and newly skeptical of REAP digester projects. Two days after environmental organizations filed the petition, USDA put a 90-day pause on the “acceptance, processing, and awarding of loan note guarantees” for REAP biodigester projects and vertical farming, hydroponics, and aquaponics projects. USDA revealed that out of 21 loans for biodigester projects, 27% are in delinquency.
“The Rural Business Cooperative Service has determined that closer examination is warranted at this time, to ensure that current program administration appropriately accounts for financial, operational, and market risks associated with such projects,” a letter to agency staff [ [link removed] ] said.
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