🌏 Ruminating on methane emissions
A gut check on reducing bovine burps
Our bellies and the fate of our planet are inextricably tied to the guts of ruminants. As they breakdown grass and cellulose in their feed, ruminants belch out methane - enough to visibly fill an inflatable backpack during one sitting. Ruminant animal products like milk, meat, wool, and leather are essential livelihoods and sources of sustenance for much of the world - who don’t have vegan alternatives access because of income or supply chain limitations.
Meanwhile, methane is having a moment. No longer able to pass as “the other greenhouse gas” methane’s in the hot seat and accountable for its 84x greater potency vs CO2 in its first two decades, and contribution to >25% of current warming. The race is on to slash methane emissions by 30% by the end of the decade via the Global Methane Pledge, signed by 100 developed and developing countries, which could immediately reduce warming by >0.2°C by 2050.
Compared to the haystack of distributed sources of CO2 emissions, CH4 accounting pencils out a much simpler story. All fingers point to agriculture as the largest source of anthropogenic methane emissions, with oil & gas production a close second (remember our O&G methane feature with Crusoe Energy?) Cow burping alone makes up a whopping ~30% of methane emissions, or ~10% of global GHG emission!
Biogenic carbon burps
But to cut cows some slack, not all methane emissions are created equal. Cows release biogenic methane which is part of the natural biogenic carbon cycle:
plants absorb carbon dioxide and produce carbohydrates such as cellulose
cows eat the cellulose and emit a portion as methane as burps and manure - if you want to sound fancy, “enteric emissions”
12 years later, the methane is converted back into carbon dioxide
The carbon that the plant initially captured from the atmosphere is the same carbon that eventually gets released back when the methane is converted. It’s recycled carbon. Meanwhile, fossil-based methane is new warming dug up from old dino bones and pumped into the atmosphere and oceans. Therefore, reducing biogenic methane could create a net cooling effect by destroying more methane than gets emitted.
Enteric emissions 101
Ever considered how the rumen works? It’s quite magical. Enteric fermentation is a highly evolved process that allows ruminants (cattle, buffalo, sheep, goats, etc.) to digest cellulose, the basic component of plant cell walls. Rumen microbes ferment simple and complex carbohydrates like cellulose to produce volatile fatty acids (VFAs), which satisfy ~70% of the animal’s energy requirements. The rub comes when the production of certain VFAs also produces hydrogen (H2), which methanogens then convert to CH4. Cellulose in, CH4 out.
*Efficient* enteric emission management
Humans have tried their hand at optimizing livestock productivity and bottom-lines for millenia, long before we felt guilty about methane’s global warming impacts. It turns out that reducing cow’s belchiness generally increases their productivity. Call it a win-win. Legacy enteric fermentation abatement approaches mostly work indirectly via decreasing emission intensity by increasing animals’ efficiency of time to output. Consider a super-ruminant that pumps out milk at lightning speed - it’s considerably cheaper to raise, and conveniently produces less CH4. Increased productivity means fewer animals, which means less methane (and other negative externalities like NOx emissions and land use). Many efficiency measures are also inexpensive (read: break-even) to implement.
Genetics - reproduction tech to improve feed conversion efficiency, resiliency via breeding
Management - antibiotics & bovine growth hormone
Nutrition - grazing & grassland management, propionate supplements
But when it comes to the increasing global demand for meat, dairy, and wool products going head-to-head with 8-year out methane cut off regulations, efficiency isn’t enough. Enteric emissions need a true silver buckshot to eliminate CH4 from business-as-usual production in the short term. (Bullseye, anyone?) [Note: the livestock industry has significant systemic problems outside of methane emissions which disruptive tech like alternative proteins and regenerative agtech more directly address. More in takeaways below.]
*Absolute* enteric emission management
Absolute enteric methane reducers are in business to be the equivalent of plugging leaking oil & gas wells. CH4 mitigation is the name of the game. It’s still early days for this climate tech submarket slice, though we’re already seeing some teams forming:
Anti-methanogen vaccines: while currently very limited / early-stage, a vaccine that triggers antibody production to bind with methanogens and render them inert would be highly desirable since it requires infrequent administration and no on-farm changes
Methane-capture wearables: hardware like Zelp’s masks that strap onto the cow and captures and/or flares the methane before it’s released into the atmosphere, is sure to capture imaginations. Wearables also capture important health data about individual cows and the herd, which farmers use to increase productivity and decrease costs.
Feed additives: vary considerably in their efficacy and level of tech development and testing, though are similarly administered as a fractional volume of cow’s existing feed. See the helpful graphic below of the mitigation efficacy of the ten additives most researched for methane mitigation.
Compounds: Bovaer’s 3-NOP claims 30% methane-elimination and is a telling case study of how a big legacy industrial co (DSM) can use their considerable resources to accelerate research (10 years), testing (50 trials), and approvals (included in the EU registry as the first feed additive authorized for marketing environmental benefit) and claimed the entire market prize - much like in pharma. Hot on 3-NOP’s heels is bromoform, a bioactive compound that boasts ~100% in-vivo methane elimination. Companies like Rumin8, seek to isolate bromoform while maintaining the finicky bioactive compound’s efficacy and eliminating potential toxic side effects. See: *Tricky Tummies and *Toxic Tailings call-out below for more.
Natural ingredients: from witchbrew to lemongrass, garlic to chestnut, tannins to linseed, the list of natural ingredient feed additives with suggested methane-reducing powers goes on. Meta-analyses and venture-funding activity suggest the most promise in a particular strain of frilly red seaweed, Asparagopsis Taxiformis. The accidental seaweed discovery (so the story goes) led to a 2014 study which has led to a boom in research and investment activity into seaweed-fueled cow burp startups. Asparagopsis’ efficacy correlates with its high concentration of bromoform compounds, and natural ability to effectively deliver bromoform without the rumen adapting (see: Tricky Tummies). Simple? Not so fast. Asparagopsis is hard to grow and faces unique manufacturing challenges in both ocean farming and land tanks, including limited supply of seed stock, high energy requirements for tanks, underdeveloped industry for ocean farming, heavy water weight, etc. Coupling the low-margin of seaweed farming with the low-margin of the dairy/cattle industry does not make for software margins. Startups are eeking out value in different ways:
🪙 Licensing the IP to produce asparagopsis, like FutureFeed which was first to market with the asparagopsis finding
👷 Arbitraging production with free and low-cost inputs like natural conditions, renewable electricity, upwelled nutrient-rich water, labor, etc., like CH4 Global’s operations in Australia and New Zealand
♻️ Mixing inputs to cut costs and maintain efficacy, like Alga Biosciences which bulks out asparagopsis with other low-cost algae like kelp
Innovators: Mootral, Blue Ocean Barns, Symbrosia, Alga Biosciences, Volta Greentech, FutureFeed, CH4 Global, Sea Forest, Greener Grazing, Primary Ocean, The Seaweed Company, Seastock, Seascape Restorations, Agolin
Feed additives proponents are quick to point out their co-benefits: fly abatement, improved cow health which reduces antibiotic use and therefore antibiotic resistance. But to the cunning investor’s eye, additives have a few things going for them that make them a potential venture-scale bet:
💯 high level of emissions reduction efficacy: depending on who you ask, 90%! 30%!
🥛 co-benefit productivity gains: healthy cows spend less energy making poisonous gas and more energy growing or producing milk - said another way, less feed = more product
⏱️ short time-to-impact: the closest approach to to flipping a switch
🤫 compatible with existing practices: imperceptible change on the farm is the most important feature for a climate technology
*Tricky Tummies: Cows’ tummies aren’t easily fooled. Methanogens rule the rumen and aren’t game to give up their balance so easily. Thus, these miracle additives can quickly lose efficacy as the tummy learns and returns to its natural gassy state. Garlic and raw bromoform’s impacts, for example, rebound from near perfect reduction to imperceptible levels after just 2 weeks use. The goal is to permanently, constantly disrupt the methanogen’s 9-step process to continue mitigating.
*Toxic Tailings: Another pesky problem - some additives can be seriously toxic. Bromoform is a carcinogen (nbd!) so any traces ending up in meat or milk would naturally render the whole additive enterprise moot. (hah) This research is naturally highly debated, and evolving in real-time though trending in the bromoform bio-additive producers’ favor.
Plugging into the value chain
The cattle value chain is a tightly run mathematical operation optimizing for weight, size, and yield, with only a few key entry points for feed additive startups to make a play. The value chain starts with the ranchers, who raise cattle until they become big enough to enter the feedlot (think massive animal feeding operation), before being slaughtered and processed into meat by meatpackers (typically the big 4: JBS, Tyson, Cargill, National), then onto the shelves and plates of supermarkets, food service suppliers, and restaurants.
Corporate offtake: meatpackers, food and drink companies, restaurants, supermarkets
Companies at the end of the value chain are closest to the customer and therefore bear the brunt of the low-carbon pressure. If a retailer agrees to offtake low-carbon beef or dairy, they can have the demand pull-through to request their suppliers adopt certain feed additives to claim the methane reduction benefits on their Scope 3 report cards - which is a version of insetting. This is particularly useful in cattle value chains, where many of the major feedlots are in bed with the Big 4 and each feedlot alone could span hundreds of thousands of cattle. However, offtake agreements still shift the heavy cost burden onto the corporates, which may not be able to realize enough of a price premium to offset the feed additive costs.
Direct to Feed-Consumer: Ranchers, Dairy Farmers, Feedlots
Ranchers already buy mineral additives to be blended into feed products and are all ears when it comes to higher feed conversion rates (efficiency gains + methane reduction is a double whammy). There could also be an added decarbonization benefit with a decentralized production model by being able to produce closer to the animal supply chains. But ranchers really care only about the production and efficiency benefits, not the decarbonization ones. Selling directly to ranchers is also extremely challenging when they already have trusted relationships with many other parties for exploring new feed options. It’s tough to find willing buyers looking for the bleeding edge of the tech curve - especially when production efficiency isn’t the main sell.
Direct to feed companies: Cargill, Land O Lakes, Tyson, ADM
Talk about vertical integration. The same beef industry players also have their hands up the supply chain as the largest animal feed producers, which means corporate offtake here is a double whammy on Scope 1 and 3 emissions (but corporates beware of double counting).
Offsetting: Verra, Gold Standard
The carbon offsetting route is also a viable one with Verra and Gold Standard already leading the herd in developing methodologies for reduction of enteric methane emissions through feed supplements. However, the offsetting path brings up the hairy question of who gets to claim the emissions benefit. Downstream food retail brands likely won’t be happy campers if an outsider gets to reap an emissions benefit within their value chains.
Within these go to market channels, these are critical tradeoffs to consider:
Who claims the emissions benefit - the startup providing the additive or a potential corporate offtaker
What is the product - selling a feed additive, process (IP, right to produce), insetting program, or credit
Who is the customer - farmers, feedlots, corporates downstream of the value chain
What is the sell - methane reduction, increased productivity yield, health benefits
Bandaid on a broken system? The argument could be made that technologies which eliminate enteric emissions enable meat and dairy producers with the continued license to operate inhumane, unhealthy, environmentally destructive operations. Pragmatists would clap back that true systemic industrial transformation takes time, and we need immediate absolute solutions (not just efficiency gains) for the CH4 that’s here and now. Despite declining demand in the US and EU, turning the tap off entirely on industrial-scale animal production is likewise unrealistic, and ignores the fact that a majority of enteric emissions come from developing countries where veganism is neither realistic, nor culturally suited.
Corporates are backing their own horse… or cow. Much of the funding into enteric tech startups comes from corporates e.g. Danone & Symbrosia, Cargill & Zelp, Starbucks (via Valor Siren) & Blue Ocean Barns. Corporates decarbonization action is laudable and it’s hardly intrinsically problematic for startups to raise corporate capital, though corporate involvement early in startups’ development puts a heavy thumb on the scale of solving for one set of customer needs and could encourage startups to develop an easily acquirable single input rather than a portfolio of products.
Testing, testing. The entire scientific field of methane-reducing feed additives is just a decade old. Studies are limited in count, limited in size (e.g. rumen headcount), and limited in commercial application. Studies are prohibitively expensive for startups to run solo (although, many are starting to invest here with expensive VC dollars), especially given the complexities of interconnected biological and natural systems. Given the time and expense, startups often fall susceptible to underestimating (by 1-2 orders of magnitude) the amount of data needed to provide confidence to their up and down-stream buyers.
Size and lasting power matter. Without significant performance in emissions reduction and proven duration, farmers won’t get out of bed for new nice-to-have changes that could pose a risk to their operation.
MRV is a moo-ving target. Measuring methane reduction requires wacky animal trials during testing (think: cows wearing hoods), which don’t feasibly translate to commercial verification - though verification is of course required for carbon offset legitimacy.
Regulatory chicken and egg: innovators’ ability to fundraise and sign commercial contracts is limited by lack of regulation, yet regulatory action is limited by lack of innovators’ traction. Approvals and standards would push the market quickly, as seen with 3-NOP. Though, muddying the waters, agriculture is intensely political and favors entrenched interests over tech disruptors.
One size does not fit all. Applicability of venture-scale solutions varies dramatically by production systems (dairy vs beef) and by geography. Most feed additive solutions only work for mitigation if the rumen is dosed up every ~6 hours. Which begs the question of TAM vs SAM.
Exporting innovation. A majority of enteric emissions today are produced in China, India, Brazil, and developing countries, where future meat and milk consumption are going up. Yet, a majority of the technology players are based in the US, Australia, and EU where ag methane emissions are coincidently declining and consumption patterns are shifting away from animal sources. How do innovators involve global research and consumers to ensure adoption in non-native use cases?
Algae stans please stand up. The seaweed industry is booming in products from beauty to food, with indirect benefits like alternatives to fishing livelihoods in developing countries, as a filter for runoff effluent from fish farms and rivers, biodiversity, replacement for land use, etc. Nascent industry open questions remain around capacity, capex, and price.