A proposal to extend Oregon’s tax credit for collecting cow manure for energy has come under fire from critics who say it’s mostly beneficial to large dairies.

The tax credit of $3.50 per wet ton of bovine manure collected is intended to promote the construction of methane digesters that produce renewable energy. It’s slated to end in 2022.

Senate Bill 151, which would change the sunset date to 2028, is supported by the Oregon Farm Bureau and Oregon Dairy Farmers Association.

“Manure digesters provide very clear environmental, renewable energy, and economic benefits to the dairy industry and the public,” the groups said in written testimony.

Oregon currently has three methane digesters in operation, one of which annually sequesters 136,000 metric tons of carbon dioxide — the amount emitted by about 29,000 cars, the groups said.

Extending the tax credit helps ensure these digesters will remain online and may encourage others to invest in the technology, the letter said.

However, critics of the tax credit claim it amounts to a subsidy for the largest “confined animal feeding operations,” or CAFOs, in the state.

The biggest benefactor of the tax credit is a dairy with 70,000 cows, and digesters are only economically feasible for facilities with well over 500 cows, said Amy Van Saun, an attorney with the Stand Up to Factory Farms Coalition, which opposes major CAFOs.

The bill creates a “perverse incentive” to continue siting major CAFOs in Oregon at the expense of rural communities, she said.

At best, such digesters only capture the added methane generated by the development of factory farm systems, Van Saun said.

CAFOs should be required to trap their emissions if they choose to raise animals in this manner, rather than be paid for it by the public, said Amy Wong, policy director of the Friends of Family Farmers nonprofit.

Natural gas from factory farms is not “truly clean energy” and the state government should instead encourage pasture-based farming and technologies such as wind and solar electricity, Wong said.

“Oregon should not use public dollars to support large, private corporations at a time Oregon is facing a budget shortfall,” she said.

The Oregon Center for Public Policy, which advocates for “inclusive economic policies” for workers, also opposes SB 151 because the tax credit costs the state $5.5 million per biennium that could be invested in more valuable projects and services.

The bovine manure tax credit was originally included in a broader tax credit for biomass energy created in 2007, but it was renewed as a standalone tax credit in 2017, said Kyle Easton, an economist with the Legislative Revenue Office.

In recent years, most of the financial benefit from the tax credit has gone to four companies, he said. “There is a concentration in a few of the entities that are receiving this credit.”

Knowing that such a tax credit will continue to exist can help digester investments “pencil out” financially for companies that may not otherwise be able to afford them, he said.

Economic studies have indicated size is an important consideration in investing in digester technology, Easton said. “The larger the herd, the more financial sense it makes for the farm to have an on-farm digester.”