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Last week, oil and gas giant Shell announced plans to buy a leading Danish biogas company, Nature Energy, which refines methane gas from organic waste. Shell struck this deal less than two months after BP took over a different biogas company, Archaea.

Fossil fuel corporate investments in methane gas generated from landfills, crops, or manure are growing as countries demand alternatives to fracked fossil gas. The Biden administration has dedicated taxpayer funds to subsidize facilities that turn animal manure into burnable gas in the name of reducing greenhouse gas emissions. In some states, biogas also qualifies for renewable energy portfolio standards.

Environmental advocates, however, argue that biogas is a false climate solution built atop dirty industries, particularly concentrated animal operations. They worry that public incentives to build biogas plants will simultaneously stall a transition away from confined livestock farms and fossil gas production without significantly reducing greenhouse gas emissions. On Wednesday 140 public health and environmental groups urged USDA to stop investing in biogas, following a similar letter from five Democratic senators. Environmental justice advocates have also petitioned to remove biogas from California’s renewable energy portfolio.

“There’s a real opportunity cost given the timeline for transitioning our energy systems and farm systems,” says Rebecca Wolf, policy analyst at Food & Water Watch. “Building this type of infrastructure is going to further exacerbate our reliance on fossil energy and it will take us away from a fair food and farm system and towards more industrialization and more consolidation.”

Public officials and corporations sell biogas as green energy, but the reality is much more complicated. Biogas, or renewable natural gas, is chemically similar to fracked fossil gas and mostly consists of methane, but instead of drilling it from the earth, it can be derived by breaking down organic material in machinery called biodigesters. Biodigesters can create environments that make food waste, manure, or plant matter release methane, or they can refine naturally generated methane coming off of oxygen-starved waste sites, such as landfills or liquid livestock manure lagoons.

Burning this biogas turns methane, a powerful greenhouse gas, into carbon dioxide, generating energy with fewer greenhouse gas emissions than burning oil or coal. Since some biodigesters can capture methane that otherwise would have gone into the atmosphere and others run on waste products, many life cycle analyses find that biogas generates fewer greenhouse gas emissions per unit of energy than fracking for natural gas.

Biogas opponents argue that the industry overstates its climate benefits, especially because it encourages industrial farms to produce more waste and raise more methane-emitting livestock. Biogas facilities turn excess manure into a revenue stream for larger industrial farms, giving them a new competitive advantage and an incentive to expand their polluting operations. One analysis found the largest dairies with 10,000 cows derive the highest value from biogas incentives while dairies with just 100 cows derive almost none. Reporting in Hoard’s Dairyman estimated that large dairy farms contracting to supply manure to digesters can reap more profits from their manure than milk.

All told, biogas revenue distorts agricultural markets and puts smaller farms that rotationally graze livestock at a further disadvantage. This could exacerbate agriculture’s climate impact by marginalizing sustainable, low-methane manure management and lead to an expansion of industrial livestock farms just to profit off manure. Meanwhile, cows’ burps and farts are the main sources of agricultural methane emissions and biodigesters do nothing to address them.

“The question becomes, are you really reducing methane emissions under this system by creating this weird incentive to produce more manure?” asks Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy.

Beyond climate considerations, larger industrial livestock farms also pollute surrounding air, streams, and drinking water. Low-income communities and communities of color are more likely to bear the brunt of this pollution, which has been linked to respiratory and cardiovascular illnesses. Livestock air pollution is responsible for more than 12,000 premature deaths annually, according to the National Academy of Sciences, which is more than those from coal power plant pollution.

Biogas pipelines and facilities also leak some methane into the atmosphere, meaning any biogas projects that intentionally generate new methane will introduce new climate warming emissions if they leak. A recent study from the UK found biogas supply chains leak up to twice as much methane as previously estimated. Wind and solar projects generate cleaner energy and more of it for a lower cost over a longer lifespan than biodigesters. On a tight decarbonization timeline, electrifying gas infrastructure and investing in wind or solar will be more effective than swapping fossil gas for biogas.

Despite these risks and concerns, Secretary of Agriculture and former dairy lobbyist Tom Vilsack has doubled down on federal subsidies for biogas. Analysts predict the global biogas industry will more than double over the next decade even though many projects in the U.S. are not economically viable without public support. Promoting methane digesters was a central part of the Biden administration’s 2021 methane plan and USDA programs such as the Environmental Quality Incentives Program (EQIP), Rural Energy for America Program (REAP), and AgSTAR all distribute funds to subsidize biogas.

Wolf argues that USDA keeps expanding incentives for biogas despite its evident flaws because the agency kowtows to powerful agribusiness and fossil fuel interests. “We are talking about subsidizing a pollution profit model over real clean energy projects [because] those are not as profitable for these big companies,” says Wolf.

Dominant oil and gas corporations are taking notice and making major investments in biogas, with BP buying Archaea for $4 billion in October and Shell buying Nature Energy for $2 billion last week. Shell says this acquisition is part of its plan to grow low-carbon fuels, but it could also benefit its fossil gas business. Building out biogas pipelines and more gas infrastructure could delay electrification and a transition away from gas. “These big fossil fuel companies see an opportunity to keep their infrastructure, [their pipelines], in place,” says Lilliston.

Shell’s Nature Energy plans to run its forthcoming Minnesota, Wisconsin, and Quebec biogas plants on manure from surrounding dairy farms. Nature Energy did not reply to questions about the size of farms it may work with.

On Wednesday a coalition of 140 public health and environmental organizations urged the USDA to ensure conservation funds from the Inflation Reduction Act would not go toward subsidies or tax credits for biogas. This follows two letters from Senators Cory Booker, Kirsten Gillibrand, Edward Markey, Bernie Sanders, and Elizabeth Warren to the EPA and USDA in August that raised concerns about public investment in manure-based biogas facilities. “We are concerned that relying heavily on increasing the number of methane digesters will not sufficiently reduce methane emissions from agriculture and will have unintended negative consequences for agriculture industry consolidation and for environmental justice,” the letter says.