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dairy cows can now be fed Bovaer in the US
Image credit: istock/Clara Bastian

Bovaer is ‘creating a self-sustaining carbon inset market for American agriculture’ says Elanco

July 8, 2024

The best-known feed additive for reducing methane emissions from burping cows, Bovaer (3-NOP) has just secured the regulatory green light for use in lactating dairy cattle in the US. But who will pay for it, and what will drive widespread adoption?

Developed by DSM-Firmenich and commercialized in the US by animal health partner Elanco, Bovaer (3-nitrooxypropanol, which inhibits an enzyme involved in methane production in ruminants) 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 the firm, “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.

“A pilot has recently been started in Brazil to also explore the potential of the carbon credit market as an alternative source of funding.”

Challenges to rapid adoption

As for the biggest challenges, it says, “Despite 100+ trials being available, we notice that individual companies still want to test/pilot before scaling, and this takes time.

“In many geographies, but also inside some companies, there is also ambiguity on how methane reductions will be accounted for and which local standards might apply. This uncertainty slows down widescale adoption.”

Historically, meanwhile, there have been few “incentive systems in place to recognize producers/farmers for strong sustainability behavior, and it takes time to build and implement these,” adds the firm. “So we cannot plug and play into a system; we rather need to find support in the building of an ecosystem.”

Monetizing livestock methane reduction

In the US market, says Elanco’s VP livestock sustainability Katie Cook, Elanco has been instrumental in helping to put an incentive system in place, “creating a self-sustaining carbon inset market for American agriculture.”

Speaking to AgFunderNews after the FDA gave Bovaer the green light in the US and Elanco struck a deal with DSM Firmenich to expand distribution across North America, Cook said Elanco has developed tools that help both quantify methane emission reductions and generate carbon credits.

Uplook is an online tool that helps to quantify greenhouse gas emission reductions. It utilizes on-farm data and peer-reviewed science to identify the key drivers of an operation’s carbon footprint, and then track the progress of sustainability efforts such as using Bovaer.

“So as an example, we’ll go on farm, the producer will input data, for example, ‘I have 1,000 cows and I’m feeding them this much Bovaer per day.’ That’s then fed into a calculator that has been validated by a third party that says based on this data, that’s x number of metric tons of CO2e emissions reductions.”

This data can in turn feed into other systems that can enable the generation of carbon credits, said Cook, who said that on average Bovaer can deliver a 30% reduction in enteric methane emissions in lactating dairy cows.

“We’re working with a number of different organizations, but Athian is the one that’s the most advanced that we have a partnership with. So Athian is a carbon insetting marketplace, the first one for livestock here in the US.

“We work with producers who essentially give us a data release that says they allow us to upload their data to Athian, which then works with a third-party verifier who will go on farm and check: Were the animals actually fed Bovaer? Was the data collected correctly? Are the calculations correct?

“There is a protocol around Bovaer and Uplook that is validated by Athian’s Scientific Advisory Board and third-party auditors. The reduction gets verified and then Athian creates credits that a buyer such as Nestlé, Starbucks or Danone can then purchase from Athian, who will then transfer those dollars back to the producer.”

By engaging in voluntary carbon markets and securing USDA and state conservation programming, dairy producers have a scalable sustainability practice with the potential to create an annual return of $20 or more per lactating cow by feeding Bovaer.” Katie Cook, VP livestock sustainability, Elanco

$20 return per lactating dairy cow

According to Cook: “If you look at the overall value proposition today, it’s about a $20 return or more annually per lactating dairy cow that the producer would get for feeding Bovaer. About 50% of the return is going to come from a carbon marketplace like Athian, and the other 50% is going to come from government incentives.

“So there was about $89 million in RCCP grants awarded to dairy companies, coops and trade groups to reduce methane emissions last year. So that will be the first tranche of dollars that will be available for producers in addition to the carbon market. As government incentives like this go away, the expectation is that we’ll get a more robust carbon marketplace with more players and more opportunities for producers.”

150 farms enrolled so far

So how enthusiastic is the US dairy industry about using Bovaer now that it has the regulatory green light?

“We already have 150 farms enrolled on Uplook and we’re growing that number every day,” said Cook. “So that’s the first strong indicator of their willingness to participate. They’re already submitting data without getting any credit for it because they want to make sure they have worked out all the kinks so that they can be ready to implement Bovaer once product is available.”

But some farmers are skeptical, she said. “It’s a new marketplace that no one has participated in yet, so there are still a lot of questions like, How will I get paid? How often will I get paid? Those are the pieces that we’re working through as we get the RCCP grants finalized and get the carbon marketplace off the ground. Right now we’re in that weird in-between time, but we anticipate that this summer, we’ll have product available.

“There are always kinks when you start something new, but we have a really good group of producers that are ready to implement and willing to learn with us so that we can make this scalable for wider industry adoption.”

‘Scalable credible carbon credits’

That said, the driving force behind these initiatives in many markets will be large CPG companies under pressure to reduce Scope 3 emissions by cutting greenhouse gases in their supply chains, she said, and Bovaer is going to be a key part of that toolkit.

“Over two thirds of Fortune 500 companies have made Scope 3 commitments; they need scalable solutions, so they will take the lead.”

While other enteric methane reduction solutions such as Asparagopsis (red seaweed) are coming onto the market, she said, “Bovaer is the only FDA reviewed feed ingredient with a methane reduction claim. It has over 70 peer reviewed studies. It has over 100 on farm trials, so we have a lot of credibility. Plus it’s very scalable. We’ve built an ecosystem around it to not only get it on the farm, but also help create scalable credible carbon credits.”

Further reading:

CRISPR: A gamechanger for livestock methane reduction? ‘It’s high-risk, high-reward,’ says UC Davis professor

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