While burping cows and other ruminants are some of the leading sources of methane emissions, a surprisingly small sum—little more than $233 million according to AgFunder data—has been pumped into startups tackling the problem over the past decade. Much of that capital has been funneled into red seaweed-based feed supplements, which require “patient capital,” notes Tom Puddy at Australia-based SeaStock, one of several startups growing Asparagopsis to feed livestock for methane reduction. “Investors are very skeptical about investing in large-scale aquaculture projects as there have been some spectacular disasters in areas such as algae biofuels and massive prawn farming systems.”
That said, with more than 150 countries committing to large cuts in methane by 2030, and numerous companies pledging to slash Scope 3 emissions over the same timeframe, pressure is mounting to take action. Larger checks will likely go to companies able to demonstrate credible—and scalable—solutions, predicts Sam Elsom, CEO at Tasmania-based Sea Forest, another startup growing Asparagopsis. “Farmers can try and sequester more soil carbon, they can plant trees, they can do manure management, but none of those things can deliver the level of abatement that Asparagopsis can. It’s a case of for how long can you kick the can down the road?”
Indeed, the market opportunity for firms that can deliver affordable, scalable solutions for farmers is potentially vast, says Alexia Akbay, founder and CEO at Hawaii-based Asparagopsis startup Symbrosia: “I think there are going to be multiple billion-dollar valuation companies coming out of this.”
A potent greenhouse gas, methane is generated on farms both from manure and burping ruminants such as cows and sheep in a stomach compartment called the rumen. Here, microbes break down complex carbohydrates to produce carbon dioxide and hydrogen, which are then converted into methane by another set of microbes and belched out. Approaches to tackling enteric methane production vary, with innovative startups and academics exploring everything from vaccines to breeding animals that produce less methane, to editing the genes of the microbes in the rumen. While some of these approaches may take years to hit the market, several feed supplements that interfere with methane production in ruminants are already commercially available, although questions remain over who will ultimately foot the bill: farmers, processors, or consumers?
Of the available methane-busting feed supplements, the best-known option is Bovaer (3-nitrooxypropanol), which inhibits an enzyme involved in methane production in ruminants. Developed by DSM-Firmenich and commercialized in the U.S. by animal health partner Elanco, Bovaer is now commercially available in 64 countries with additional approvals expected this year. “Whereas in the initial year after approval we participated in many pilots, in some of the more advanced countries, and after successful completion of those pilots we now see the transition to repeat use and scaling,” says DSM-Firmenich.
In the vast majority of cases, says a spokesperson, “The companies which benefit from the Scope 3 emissions reductions pick up the costs of Bovaer. They either do so as individual companies or split the costs between a consortium. In a few cases, they also integrate the reduction in a premium product with a value proposition around sustainability.” However, despite 100+ trials being available, individual companies still want to test/pilot before scaling, and this takes time. There is also ambiguity on how methane reductions will be accounted for and which local standards might apply.
In the US market, where Bovaer has recently secured approval for use in lactating dairy cattle, Elanco has been instrumental in helping to put such an incentive system in place, says the company’s VP livestock sustainability Katie Cook. According to Cook, Elanco is “creating a self-sustaining carbon inset market for American agriculture.” Farmers using Bovaer can input farm data into an online tool called Uplook, which feeds into other systems such as carbon insetting marketplace Athian that can enable the generation of carbon credits. On average, Bovaer can deliver a 30% reduction in enteric methane emissions in lactating dairy cows. Buyers such as Nestlé, Starbucks, or Danone can then purchase from Athian, who will then transfer those dollars back to the producer. “Over two-thirds of Fortune 500 companies have made Scope 3 commitments; they need scalable solutions, so they will take the lead.”
The next wave of methane-busting feed supplements—derived from the red seaweed Asparagopsis, or components found in it, such as bromoform—promises more dramatic reductions in enteric methane emissions (up to 90%) but presents challenges around scale-up and regulatory approvals. As a result, some startups in the field have pivoted to different materials, while others have developed alternative production methods such as microbial fermentation