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.
The bulk of that capital has gone 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 150+ countries committing to large cuts in methane by 2030, and scores of companies pledging to slash Scope 3 emissions over the same timeframe, pressure is building to take action. And larger checks will 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.”
Enteric methane reduction strategies
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 carbs 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 the production of methane in ruminants are already commercially available, although questions remain over who will ultimately foot the bill: farmers, processors, or consumers?
Feed supplements: What will drive widespread adoption?
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 US 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.”
As for the biggest challenges, says the spokesperson, “Despite 100+ trials being available, we notice that 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.”
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. So we cannot plug and play into a system; we rather need to find support in the building of an ecosystem.”
Companies that have made Scope 3 commitments ‘will take the lead’
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 call Uplook, which feeds into other systems such as carbon insetting marketplace Athian that can enable the generation of carbon credits, says Cook. On average, she adds, 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, she explains. “Over two thirds of Fortune 500 companies have made Scope 3 commitments; they need scalable solutions, so they will take the lead.”
Asparagopsis (red seaweed) offers promise of larger reductions in enteric methane
The next wave of methane-busting feed supplements—derived from the red seaweed Aparagopsis, or components found in it, such as bromoform—promises more dramatic reductions in enteric methane emissions (up to 90%) but presents challenges around scaleup and regulatory approvals.
As a result, some startups in the field have pivoted to different materials, while others (Rumin8, Number8 Bio) have developed alternative production methods such to produce compounds found in seaweed, which they claim are more scalable.
Volta Greentech pivots away from seaweed
Swedish startup Volta Greentech has spent several years growing Aparagopsis. Founder and CEO Fredrik Åkerman says the firm has now pivoted away from that to a new product, which he cannot disclose until he finalizes IP.
“We have fully shifted to a new product that is showing very promising efficacy in beef and dairy in line with Asparagopsis,” says Åkerman. “The major advantage of this versus Asparagopsis is the scalability of production. We can produce this more simply and at a much larger scale more cheaply with co-manufacturers.
“I can’t share how it is made, but the mode of action to reduce methane production in ruminants is the same as Asparagopsis. The main focus now is going through the technical feed additive approval process in Europe. We plan to submit a dossier next year and our ambition is to have product on the market in 2026.”
He adds: “Asparagopsis delivered great results but the challenge has been production. We spent many years developing different ways of producing it, but we didn’t get what we wanted. Now we have a new product where production is simpler and cheaper, we decided it didn’t make sense to work on both.
“There are many companies that are making a lot of progress with Asparagopsis. But for us, we don’t see it competing cost-wise with our new product.”
As for incentives for farmers, he says: “It will be a combination of factors. In Europe, for example, some meat and dairy companies and retailers have ambitious climate targets and are investing in financing solutions for farmers that supply them. But we also need governments to act because if no one is putting pressure on companies to reduce emissions, it will take more time.
“So in Sweden, for example. there is no specific target for reducing emissions in agriculture, whereas Denmark [which is planning a carbon tax on livestock emissions from 2030] is ahead of everyone.”
“Asparagopsis delivered great results but the challenge has been production. We spent many years developing different ways of producing it, but we didn’t get what we wanted. Now we have a new product where production is simpler and cheaper, we decided it didn’t make sense to work on both.” Fredrik Åkerman, Volta Greentech
Sea Forest: ‘The issue is how many farmers and feedlots want to use it and who is going to pay for it?’
At Tasmania-based Sea Forest, which started researching seaweed as a methane reduction strategy in 2018, CEO Sam Elsom says the potential is significant, but stresses that growing Asparagopsis at scale is not for the faint-hearted.
“It took us two years to really understand how the seaweed reproduces in nature and how to replicate that in a controlled environment in raceways on land. But just because we’ve developed a method for cultivation in Tasmania doesn’t mean we could go to New South Wales, build a farm and make it work.”
Sea Forest supplements are oil-based extracts, rather than freeze-dried whole seaweed, says Elsom, who has also developed lick blocks and is working on slow-release bolus products. “It’s much cheaper than freeze drying, which is also incredibly energy intensive.
“And for what’s left over after extraction, we have exciting byproduct pathways we’re working on,” adds Elsom, who has an 1,800-hectare marine lease and a 30-hectare farm featuring 660 ponds. “From our existing assets, we could scale to feed about 4 million head of livestock. Our issue now is not how much seaweed we can grow, but rather, how many farmers and feedlots want to use the product and who is going to pay for it?”
‘I think the rubber hits the road when we get close to 2030’
Will methane-reducing feed supplements ultimately pay for themselves through increased yields or will consumers pay a premium for greener meat and dairy? Or will the success of the whole endeavor rest on carbon credits?
According to Elsom: “If you’ve got a product that goes into a big retailer, maybe they’re motivated to support farmers to meet their emissions reductions targets. Or maybe you’ve got a wagyu beef producer sending product to high end restaurants [that want to make environmental claims], so there’s not one answer [to who will pay]. And then there are carbon credits.”
He adds: “Right now we’re working with [Australian fashion house] M.J. Bale [which sells ‘methane-reduced’ merino wool suits from sheep fed Sea Forest supplements]; we’re working with [restaurant chain] Grill’d on a lower emissions burger, and Ashgrove Dairy [which makes ‘Eco-Milk’ from cows fed Sea Forest’s feed supplements] that’s available in Coles and Woolworths; plus we’ve been working with [global dairy co-op] Fonterra and other dairy companies. We’ve also just done a deal with [vertically integrated UK supermarket chain] Morrisons.
“But I think there’s also going to be a need for some government support.”
In terms of productivity benefits, he says, “a peer-reviewed paper that came out in 2020 showed productivity gains from Asparagopsis supplementation in beef cattle, but we haven’t seen that replicated in larger trials, which you need before making any claims along those lines to farmers. Anywhere from 4-8% is probably realistic.”
Asked what will focus minds, he says, “I think the rubber hits the road when we get close to 2030, as so many people have made commitments around that date. Meat and Livestock Australia has a 2030 carbon neutral target for the Australian red meat industry, for example.”
“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?” Sam Elsom, Sea Forest
CH4 Global: ‘We’ve shown that we can efficiently and effectively grow Asparagopsis at a much larger scale, frankly, than anybody else’
Headquartered in Henderson, Nevada, with operations in Australia and New Zealand, CH4 Global grows Asparagopsis in patented vessels on land and deploys a patented processing method it claims reduces the loss of volatile bioactives, provides stability and reduces cost, waste and energy use.
[Disclosure: AgFunderNews’ parent company AgFunder is an investor in CH4 Global.]
The firm, which is gearing up to open a large-scale facility north of Port Lincoln in southern Australia later this year, has “shown that we can efficiently and effectively grow it at a much larger scale, frankly, than anybody else,” claims founder and CEO Dr. Steve Meller. “And we can do so in a way where we don’t limit the propagation and the growth rates of the seaweed.
“The ponds are designed to optimize the current and fluid flows so you can still get light penetration even as you double and continue to double and replicate. So there are no dead zones, no spots where current doesn’t flow, no locations where light isn’t penetrating at a certain intensity. Our profit margins will be in excess of 40% and our COGS are four- to seven- and in some cases 10-fold lower than anybody else in this space.”
The seaweed supplements generated at CH4 Global’s new facility have already been allocated to three buyers, says Meller, who has also developed partnerships with Korean food giant Lotte International and an undisclosed “global corporation” for potential supply in South America.
When it comes to ROI, he says, there are multiple potential avenues: “What we know from the work CH4 Global has been doing on Australian beef, is that somewhere between a 2-3% premium is all that’s required to cover the costs of the product. The second lever is feed efficiency [cattle in trials with CirPro achieved the same weight gain as the control group while consuming less feed, he says].
“The third lever is the value of carbon, and the fourth lever is the impact of taxes on livestock emissions. In future you may have markets closed off from you [if you fail to reduce livestock methane emissions].”
SeaStock: ‘Pushing the price onto the consumer is a really big ask’
At Australia-based SeaStock, which makes highly concentrated Asparagopsis supplements stabilized in canola oil for use in compound, mash and lick block feed applications, managing director Tom Puddy says he’s not convinced that all of these levers will work, however.
“I just don’t see someone at the supermarket shelf buying milk for an extra dollar per carton. I think pushing the price onto the consumer is a really big ask. And there are also credibility issues around carbon credits.”
By contrast, productivity gains from using Asparagopsis supplements have more obvious appeal to farmers, he says. “We’re targeting around 50 cents per cow per day, and if you’re getting a 10-20% productivity gain, you can offset that cost.”
“There are credibility issues around carbon credits.” Tom Puddy, SeaStock
‘Investors are very skeptical about investing in large-scale aquaculture projects’
He adds: “The next challenge is around approvals, as there’s not a consistent regulatory framework in every market, so there’s no cookie cutter approach you can apply to every new market. You have to do trials on different country protocols, and then obviously you need patient capital, which is a challenge as 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.”
As for growing systems, SeaStock operates a pilot plant in Fremantle in Western Australia with sufficient capacity for trials with partners, says Puddy.
“But large-scale production will be outside in a modular system of enclosed plastic tubes or horizontal photobioreactors. One module will be 12 tubes and 500,000-liters of capacity 100 meters apart. For a large-scale plant, we’re looking at anywhere between 50 to 100 modules to enable us to feed hundreds of thousands of cows per day.
“The algae is constantly agitating through the tubes, which are connected by pumping stations. We use renewable energy to power up the pumps and any sort of additional thermal control or cooling systems that we need. This can also be supplemented through geothermal energy.”
In this system, he says, “purity is critical, so you’re growing 100% [Asparagopsis] culture, then nutrient control, and maintaining an optimum temperature of 22⁰C.”
He adds: “It’s a very low capex system.”
As for downstream processing, he says, “We’ve developed a proprietary high-yield method where we can extract valuable compounds such as bromoform and supply a concentrated oil-based shelf-stable product that can work in a variety of different feeding regimens.”
The next step for SeaStock is raising capital and developing strategic partnerships, says Puddy. “We’re looking to operate a large-scale facility here in Western Australia and we’ve identified a site in an industrial area called Kwinana, just south of Fremantle, which has access to the sea water through underground bores. It’s also an interesting site as we can receive waste CO2 from adjacent industries [as a carbon source for the seaweed to feed on].
“Another option is repurposing disused mines far inland that have high salt levels. We can repurpose that pit water to grow the seaweed and we can also use the thermal gradient of the mine pit water to do the heat exchange.”
Symbrosia: ‘There’s going to be multiple billion-dollar valuation companies’ in this space
At Hawaii-based Symbrosia, meanwhile, founder and CEO Alexia Akbay believes a variety of different Asparagopsis growing systems can be profitable.
Symbrosia—which makes an oil-based and dried product using a low-energy drying technique—has a two-phase process going from photobioreactors to ponds, says Akbay. “We can currently only provide feed for up to 200 head of cattle at a time, but by the end of this year we’ll be able to supply up to 7,000. And then we have plans for a second larger facility, which is currently in the early stages of design and planning.”
Like SeaStock, Sea Forest, and CH4 Global, Symbrosia is a licensee of Australian firm FutureFeed, which owns the global IP for the use of Asparagopsis for livestock methane reduction, and issues licenses to companies growing it for this purpose.
So how do the nine FutureFeed licensees see each other? Are they direct competitors, or are they going after different parts of the market?
According to Akbay, who predicts it will “probably be Q4 of 2025 following federal regulatory approval, where we are confidently selling” into the US market, “I think that some folks have probably made bets on systems before testing them properly and there’s probably two or three licensees that are in that situation right now that who have invested significant capital into production systems that are not going to be optimal to scale.
“But more generally I think there’s plenty of room in the market for lots of players to develop strong partnerships that will help us commercialize these products, and plenty of room to develop unique innovations that could add revenue opportunities to our businesses, and in the long term that could be encompassing of the wider seaweed industry and its development.
“I think there are going to be multiple billion-dollar valuation companies coming out of this.”
As for the ROI for farmers, says Akbay, who has raised about $14 million in equity and non-dilutive funding, “It’s really case by case. If you’re a large beef producer that goes directly to market with a product, you might be able to recoup the cost by launching a premium product, so in some places even without any regulatory pressure, we’re seeing some large beef producers independently pursuing this.
“For example, one of our partners, Organic Valley, pays its farmers for every ton of CO2 equivalent that they abate because it has overarching climate-based targets.”
CleanEyre Global: ‘One of the biggest challenges is pathogen control’
Australia-based CleanEyre Global has spent two years in R&D working with both species of Asparagopsis (taxiformis and armata), before making any decisions about scaling up, says CEO Ron Tremaine.
“Initially we believed the solution to large-scale production was going to be sea-based. What we found very early on is that we couldn’t control the variables, so we made the decision that land-based production was the right solution.
“So we looked at developing a low capital production system, which essentially uses a large plastic bag in a frame structure, although we’re now testing more rigid bioreactors. We control light intensity [with LEDs], salinity levels, water temperature, and continuous flow of air which keeps the Asparagopsis in a life stage where it continues to clone itself and creates continuous growth in biomass.”
He adds: “One of the biggest challenges is pathogen control, either from bacteria or competing macro- or microalgae. In the coming months we’ll be filing what we think is going to be groundbreaking IP in this space. We’re also working on solutions to monitor bromoform levels during production and maximize the amount of bromoform within the biomass.”
While Tremaine believes there must be a yield benefit to incentivize farmers to use Asparagopsis supplements, the ROI will vary according to the customer, he says.
“For example, one of our offtake partners is already using microalgae to increase omega-3 levels and by using our feed supplements as well, their livestock can produce food that’s healthier for the climate and for the consumer. So some small scale producers are taking the lead on this and developing a strong branding position [for finished goods from animals fed Asparagopsis], whereas the large-scale operators will transition over time as the market demands.”
Danone and General Mills: Solutions must work for farmers
In the dairy sector, Danone has worked with farmers on a variety of manure management initiatives to cut methane emissions, but has also been working on enteric methane, says Chris Adamo, VP of public affairs & regenerative ag policy.
“We’ve been working with DSM on Bovaer for several years and we’ve seen substantial data, not just on the environmental efficacy, but also on animal care and milk quality impact, and we feel pretty confident about all three of those areas.
“We’re now helping pay for some farms to use Bovaer in some markets, but we’re not locked into one technology at this point. There are other products based on seaweed that may help in future [Danone Manifesto Ventures has invested in Symbrosia, for example].
“We’re hopeful that seaweed is a really viable option if you can get an 80-90% reduction in methane and then perhaps there are additional nutritional benefits that help offset the cost. But these are things we’re still learning about.”
“The key challenge is farm engagement. You can’t force this on farmers. You have to meet them where they are. There isn’t a one-size-fits-all approach for methane reduction on farms.” Chris Adamo, Danone
At General Mills, another member of the Dairy Methane Action Alliance, Margo Conovor, manager, regenerative agriculture, says the firm is focusing on manure management strategies such as solid-liquid separation, and more frequent emptying of the manure pit, particularly during the summer months as part of a “whole farm” approach to reducing emissions.
Feed additives to reduce enteric methane are “definitely something that we’re looking at as part of our plan,” she says. “But we are being a little bit conservative about approaching them, since we’re talking about [interfering with] the cow’s natural digestive process. Ideally there are yield benefits for the farmer, because we think that that is more motivational for long term adoption.”
She adds: “We’re also looking at feed rations more generally, so we’re looking at opportunities to diversify the cow’s diet and see how that can potentially reduce enteric emissions.”
FutureFeed: ‘The clearest regulatory path is in Australia and Europe’
Australian startup FutureFeed owns the global IP for the use of red seaweed for livestock methane reduction, and has to date issued licenses to nine companies growing it for this purpose.
“What’s exciting is that Asparagopsis is a natural product that can drive both significant reductions in greenhouse gases and potentially deliver extra productivity,” says CEO Alex Baker. “If we can get it formulated into a product that is consistently delivered into beef and dairy systems, we’ve got a winner. But cultivation at scale still presents challenges, plus there are ongoing jurisdictional and regulatory pathway challenges simply because it’s a new thing.”
He adds: “The clearest regulatory path is in Australia and Europe. In Australia, dried Asparagopsis is an approved feed material, while oil-stabilized Asparagopsis can also be used as a feed material as long as it meets Excluded Nutritional or Digestive (END) requirements.”
In Europe, he says, “For whole seaweed, you could go and sell it today as a feed material. An extract or otherwise is a feed additive, which requires an application process.”
In the US, meanwhile, “There’s currently nowhere clear for it to sit,” says Baker. “If you were to go through the full veterinary drug application, that’s extensive and probably has some unnecessary elements to it, given the nature of the product. But the FDA is working with Congress to get legislative authority for a regulatory pathway for things like Asparagopsis supplements. [The pathway covers “substances added to animal food or drinking water that… may affect the microbiome of the animal, affect the byproducts of the digestive process, or reduce pathogens in food products made from the animal.”]
“There’s a bill [Innovative Feed Act] in the Senate that hopes to develop an additive pathway, which the FDA can basically build guidance around and help this new class of products get to market in the US.”
‘We have to give farmers something else as well as methane reduction’
When it comes to driving adoption, he says, “I think the fact Asparagopsis improves feed conversion rates will help drive adoption. We have to give farmers something else as well as methane reduction. We also see indications that governments could mandate the use of these kinds of products in future.”
Carbon credits are a “way of getting things moving as most of big food companies and retailers have signed up to the Science Based Targets initiative (SBTi) and have scope three reporting requirements,” he says. “But we need to agree the methodology for measuring and claiming the abatement from feed additives in order to improve their reputation.”
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