Across the United States, factory farms are turning into gas refineries, and California is paying them for it. The state’s Low Carbon Fuel Standard (LCFS) was intended to reward makers of climate-friendly fuels with credits they can sell into an LCFS credit market. However, the most lucrative incentives do not go to true renewables like electric vehicle charging using solar or wind power — they go to so-called “biogas” made from factory farm pollution.

This is not only counterproductive and a distraction from real climate solutions. It’s also having serious environmental and public health consequences for communities across the country. Factory farms outside of California can and do participate in the LCFS and generate credits. Now, the program has become a primary driver of factory farm gas across the United States.

Our new analysis finds that 196 digesters in 16 states benefit from the LCFS. Other analyses have shown that biogas production is driving bigger factory farms inside and outside the Golden State.

Across the country, California’s LCFS is promoting the factory farm model and boosting Big Ag’s profits — and its pollution. State regulators must change course and end incentives for factory farm gas.

California’s LCFS Enriches Factory Farms Nationwide

LCFS is incentivizing a nationwide “manure rush” as factory farms seek to profiteer off the program’s incentives. They do this by installing anaerobic digesters to produce methane gas from factory farms’ massive amounts of waste. Notably, this gas is just as bad for the climate as fracked gas when burned. 

The LCFS awards the makers of “low carbon” fuel with credits, which fossil fuel polluters in California can then buy to “offset” their pollution. Through a bogus accounting method called avoided methane crediting, the California Air Resources Board (CARB) rates factory farm gas the most “climate-friendly” fuel in the program and grants it the most lucrative treatment of any fuel. 

Essentially, avoided methane crediting rewards factory farms for poor environmental performance. The bigger and more polluting the factory farm, the bigger the payout from the LCFS.

Factory farm waste contributes to huge quantities of water, air, and climate pollution. Rather than address this problem, the LCFS encourages factory farms to produce even more pollution to get these lucrative credits. Moreover, digesters worsen underlying environmental and public health risks of factory farms. 

California regulators are willfully ignoring these perverse incentives and the environmental and public health harms of rewarding factory farms for polluting through the LCFS. Worse, in making the LCFS available to factory farms nationwide, they are driving climate and air pollution in other states and in communities that have no say over what California’s regulators decide to do.

Our analysis shows that nearly half of the projects receiving LCFS benefits are outside of California. The most-impacted states (after California) are:

1. Wisconsin – 20 digesters
2. Texas – 10 digesters
3. New York – 9 digesters
4. Missouri – 8 digesters
5. Idaho & Indiana – 7 digesters each

Explore our map to see where digesters profiting from LCFS are.

Factory Farm Gas Incentives Lead to Bigger Factory Farms

A growing body of research finds that incentives for factory farm gas digesters are leading to bigger and/or more polluting factory farms, since digesters are more profitable on bigger facilities. 

We found that in California, mega-dairies that have installed digesters grew, while those without digesters shrank. An analysis by Friends of the Earth and Socially Responsible Agriculture Project has found that across eight states, dairies with digesters had a yearly growth rate 24 times that of dairies without them.

Today, the average number of cows confined on a factory farm dairy generating LCFS credits is 7,900, and the average hog project confines 78,700 hogs.

While agriculture, fossil fuel, and financial giants swarm to benefit from these incentives, rural communities are being ignored and treated like sacrifice zones for misguided climate policy. Wisconsin, the most LCFS-impacted state (after California), is seeing this firsthand. Lisa Doerr of Sustain Rural Wisconsin Network had this to say:

“Wisconsin is paying a monstrous price for the unholy alliance between Big Ag, Big Oil, and Big Finance that spawned California’s deeply flawed policy. Millions flowing from tax credits are fueling massive new expansions. 

“Global investment groups are roaming our rural communities looking to house tens of thousands of cows and pigs. Thousands of trucks roar up and down rural roads, spreading waste on every corner of land they can find. Hundreds of fans run 24/7 so the animals don’t suffocate.”

All these animals in such tight confines lead to major pollution problems that are left unaddressed or are exacerbated by factory farm gas production. Air and water pollution from factory farms is associated with kidney diseases, respiratory conditions, low birth weight, and more. These facilities are disproportionately sited near communities of color and low-income communities.

The LCFS Rewards Polluting Facilities for More Pollution

Factory farms have already been responsible for pollution crises across the country. In 2022, a digester at Winding Meadows Dairy in Iowa leaked over 365,000 gallons of manure in three weeks, contaminating a nearby waterway. Winding Meadows now receives LCFS credits.

“Let us be perfectly clear: We do not want a transportation fuel policy that entrenches and enriches Iowa Select, Smithfield, Tyson, JBS, and Prestage Farms at the expense of our communities, land, air, and water,” said Ava Auen-Ryan, the Farm & Environment Program Director at Iowa Citizens for Community Improvement. “A climate policy that grows and rewards factory farms is not a solution.”

North Carolina faces a similar threat, as its biogas facilities have had a consistent track record of pollution, said Dr. Rania Masri, Director of Organizing and Policy, Co-Director, at the North Carolina Environmental Justice Network.

In 2022, one North Carolina hog operation overfilled its lagoons. It illegally discharged fecal matter, liquefied hog carcasses, and old meat into surrounding wetlands. This contamination caused groundwater levels of ammonia to spike to over 17 times the legal limit.

“Our region is heavily burdened by biogas, poultry, pipelines, wood pellets, and floods,” continued Dr. Masri. “In North Carolina, we need outside support, not programs like California’s LCFS that financially incentivize increased pollution and thus worsen cumulative impacts for already marginalized communities.

The LCFS offers no guardrails or assurances to communities that factory farm pollution won’t continue to endanger them. It only promises more of it.  

CARB Must End Incentives for Factory Farm Gas

What California is claiming to be clean energy, frontline communities call pollution. LCFS’s factory farm gas incentives won’t help the climate — they only entrench and enrich Big Ag’s factory farms. 

“For 40 years, we have worked to keep independent family farms on the land, and programs like LCFS push us in the opposite direction,” said Rhonda Perry at Missouri Rural Crisis Center.

“It’s clear that these incentives don’t go to sustainable U.S. family farms — they go to massive foreign-owned factory farms, like Smithfield. By funneling public dollars into corporate factory farms, this program drives bigger and fewer farms, pushes even more family hog farmers out of business, and rewards the very pollution that harms our rural communities. That isn’t just bad policy — it’s a corporate subsidy that makes it harder for independent livestock producers to survive.”

This is why Food & Water Watch and our allies impacted by the LCFS are working to hold CARB accountable. We’re also working to keep perverse incentives for factory farm pollution out of climate programs in other states and at the federal level. We’re opposing factory farm gas in states across the country, and with our allies in California, we are suing CARB over these incentives. 

We will continue to oppose the factory farm gas boondoggle in D.C., in state houses, and in the courts. Because allowing Big Ag and their factory farms to profiteer off worsening the climate crisis while polluting local environments and threatening public health is a scam we simply cannot accept.