USDA Extends Pause on Loans for Anaerobic Digesters Through Year-End

U.S. Department of Agriculture will extend its pause on new loans for anaerobic digesters through December 31. The agency said the decision rests on financial performance data showing significant delinquency rates and realized losses. Anaerobic digesters capture methane and carbon dioxide from manure at large-scale animal feeding operations and convert the gas into energy.

Hundreds of these systems operate across the United States, with concentrations in California, North Carolina, Idaho, and Iowa.

An Inside Climate News review of USDA lender data updated at the end of March found that 11 percent of 746 project lenders were more than 90 days delinquent. R. Claeys, administrator of the USDA’s Rural Business-Cooperative Service, wrote that supporting high-risk projects threatens the long-term stability of the loan program.

An agency spokesperson stated the pause reflects the Trump administration’s commitment to prudent stewardship of taxpayer funds. The directive, issued in April, extended an earlier pause that began in January.

Biogas received a federal loan in 2018 for a digester at White Oaks Farm in North Carolina. The cover later breached, discharging 10,000 gallons of waste into a nearby swamp in 2022. The company sold the farm at auction in 2024 and entered foreclosure.

Phoebe Seaton, co-executive director of the Leadership Counsel for Justice and Accountability, said the projects represent both economic and environmental liabilities for communities near large dairy operations. Tarah Heinzen, legal director at Food & Water Watch, cited concerns about leaks, ammonia emissions, and increased nutrient runoff.

Serfass, executive director of the American Biogas Council, said staffing reductions rather than delinquency rates explain the pause. The council maintains that only a few digesters are seriously delinquent and that new projects should not be delayed.

Nicole Ayache, chief sustainability officer for the National Milk Producers Federation, said the group has been in contact with the USDA and hopes the review concludes quickly so farmers relying on the program are not left waiting.