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Now their 150-acre farm in Kewaunee County, home to 30-some cows plus additional steers, is surrounded by dairy farms that house many thousands of animals each, Utesch lamented one rainy day this spring as he walked across the sodden grass toward his herd.

Today, Kewaunee County has among the country’s highest proportion of factory-farm dairy operations, often known as concentrated animal feeding operations, or CAFOs.

These dairies have expanded quickly in recent years, boosted in part by the presence of biodigesters, which collect gases (primarily methane) from manure to produce biogas.

Biodigester operators can sell the biogas to fuel companies and claim lucrative renewable energy credits through state and federal programs, passing some of the revenue on to the dairy.

Supporters applaud the technology, used widely in dairy farms and hog CAFOs, as a way to reduce manure stored in lagoons and generate gas that can replace fossil fuels.

Some farms, like organic Straus Family Creamery in Northern California, have long used the biogas from manure to generate electricity to power their own operations and sometimes send electricity to the grid for revenue.

But when biogas is sold into larger gas markets, critics cite many issues.

Environmentalists say that biodigester incentives encourage dairies to add more cows to produce more poop, which increases air and water pollution.

Small farmers note that biodigesters are most likely to benefit the largest operators, meaning they increase the competitive edge that these players already have. And academics say that the carbon reduction benefits of biodigesters are questionable.

Lynn Utesch and his wife have for 22 years raised cattle for grass-fed beef on their farm in Kewaunee County. In that time, they’ve seen the dairies in their county expand and install biodigesters. (Photo credit: Kari Lydersen)

Indeed, Utesch thinks it is a “fallacy” that biodigesters are “green” or that biogas is clean.

“Digesters have been touted as a cure for the many problems of the CAFO industry, while in reality all they do is multiply the problems,” he said. “What digesters provide is a way for CAFOs to milk the taxpayers as much as they milk the cows.”

Despite the well-documented and frequently voiced concerns, biodigesters have enjoyed financial support from state and federal governments as well as private investors. But after a boom in the early 2020s, the financial outlook for biodigesters now appears dimmer, at least on some fronts.

The once-lucrative payments for providing fuel companies with “renewable” gas have diminished in value, and environmental groups are suing over changes to that program meant to bolster that value.

The Internal Revenue Service (IRS) is debating terms of its federal tax credit for clean fuels—another revenue source for biodigesters. And the U.S. Department of Agriculture (USDA) has halted grants and loan guarantees for biogas production.

In other words, biodigesters are at an inflection point. But industry boosters remain bullish about the technology, and watchdog organizations warn that biodigesters may be well-poised to capitalize on spiking energy demand as well as global sustainability incentives.

Exposed to the air, the cow pies decompose through an aerobic process that does not release much methane. (Cows release much more methane when they burp.)

The manure from concentrated dairies, by contrast, is collected into giant pits often referred to as “lagoons,” exuding methane from the anaerobic decomposition that happens when little oxygen is present.

Many dairies periodically empty the pits by spraying manure onto fields of crops. Manure can instead be fed into biodigesters—which often look like large, inflated domes—that capture the methane-heavy biogas resulting from the breakdown of manure.

Many farms with biodigesters operate on a hub-and-spoke model, meaning the collected biogas is pumped through pipelines or transported by truck to a centralized refinery.

At the refinery, it is processed to remove water, carbon dioxide, and other elements, transforming it into Renewable Natural Gas (RNG). This fuel—chemically almost identical to fossil-fuel natural gas—can be turned into compressed natural gas (CNG) or liquefied natural gas (LNG) and used to power vehicles or injected directly into a utility’s natural gas pipeline.

Refining isn’t necessary when biogas is burned to generate electricity, powering a farm or sending electricity back to the grid.

Waste left over from the digesting process—a slurry known as digestate—can be spread on fields as fertilizer, or dried and used as bedding for animals.

In theory, it all sounds like a way to make farms more sustainable. But some fear that federal and state biogas incentives encourage dairies to grow to unsustainable levels, producing more waste than the land can handle, even with some of it diverted to digestion.

In theory, it all sounds like a way to make farms more sustainable. But some fear that federal and state biogas incentives encourage dairies to grow to unsustainable levels.

A 2024 study by Friends of the Earth found that Wisconsin dairies with digesters grew at 52 times the rate of those without. A California study covering 2016 to 2025 found that dairies had added an average of 860 cows three years after installing a biodigester, and net methane emissions increased as a result.

But Patrick Serfass, executive director of the American Biogas Council, noted that dairies have been expanding for decades, and biogas production helps reduce the methane emissions and handle the manure that inevitably results.

“There’s so much methane being put into the atmosphere from open-manure lagoons, [and] there is a very easy and attainable benefit that can be made from capturing all of that methane” and transforming it into renewable natural gas, used primarily to power vehicles, Serfass said.

He also points out that biodigesters can provide crucial revenue or energy bill savings for small farms as they burn the biogas to create their own electricity, or tap credits.

But the numbers show that digesters are far more likely to be on large farms (in fact, the biogas council’s data shows that only 21 farms with fewer than 500 cows have biodigesters).

Pagel’s Ponderosa was the first in Kewaunee County to install a biodigester, in 2009, according to an analysis by Friends of the Earth. (Photo credit: Keri Lydersen)

Nowadays, most dairy cows spend most of their time in tight stalls in sprawling buildings. The picturesque wooden barns that still decorate the rolling hills of Kewaunee County are largely empty and crumbling, with roadside signs advertising barn demolition.

Friends of the Earth noted in its 2024 study that over the past 30 years, the number of cows in Kewaunee County has increased by 88 percent, even as the number of dairies has decreased by 82 percent.

Pagel’s Ponderosa dairy was the first to get a biodigester in Kewaunee County, in 2009. Three more dairies installed biodigesters over the next three years, and then in 2020, Kinnard Farms, with over 9,000 cows, acquired a digester, according to the Friends of the Earth study.

All Kewaunee residents live within 10 miles of a biodigester, according to the study, and each of the operations has been cited at least once for improper application of waste on land.

Federal data shows Wisconsin having the most biodigesters, at 48, of any state after California. Seven of them are in Kewaunee—one of Wisconsin’s smallest counties. That day in May, Utesch drove his pickup through the rolling hills around his farm and pointed them out.

All Kewaunee residents live within 10 miles of a biodigester, according to the study, and each of the operations has been cited at least once for improper application of waste on land. Multiple studies have documented E. coli and other pollution in the county’s residential wells, likely caused by manure.

And while biodigester proponents often tout that the facilities replace smelly uncovered manure pits, Utesch and other critics lament that biodigester farms typically still have pits of waste—either manure waiting to be fed into the digester or the slurry remaining after the process. And they still smell.

Nationwide, people who live around digesters say their foul odor comes both from the uncovered manure and the exhaust from the biodigesters themselves, though the EPA notes that “what comes out of a digester after processing is much less odorous than the feedstocks that go into digesters.”

As Utesch toured the county, clouds of steamy white exhaust emanated from smokestacks or vents at the dairies.

Under these state programs, fuel companies are required to reduce the carbon intensity of the fuel they sell in the state. They can do this by purchasing credits representing biogas that could potentially flow into the state.

A fuel company that does business in California, for example, can pay a Wisconsin biogas producer and receive credits representing biogas that could end up in California vehicles. To qualify for credits, the biogas must be sold to a company that provides fuel or has vehicle fleets in California or be injected into a gas pipeline that connects to California.

Under California’s Low Carbon Fuel Standard (LCFS) program, the credit value is based on “avoided methane” emissions—meaning the specific amount of methane that would have been released if a farm’s manure were to decompose in an open lagoon instead of being captured in a biodigester.

Large dairies with lots of manure can receive big payouts for the methane emissions they avoid by installing a biodigester.

Environmental advocates argue that states can design programs to promote clean transportation without disproportionately boosting biodigesters.

The cost of a credit has decreased dramatically, however: In early 2020, a credit on California’s market was worth over $200. But by early 2025, the value of that credit hovered just over $50, according to the California Air Resources Board (CARB), which runs the program.

CARB implemented changes to the program last summer to increase the value of credits. These amendments also made biogas eligible for incentives related to industrial processes and hydrogen production, further increasing the revenue available to biodigesters.