Vini Vidi Vaca 🐄

Hi there,

We’re Overview Capital and we invest in the mitigation of methane and other super pollutants at the earliest stages. Welcome to the fourth edition of our newsletter, The Overview: our biweekly dispatch on the world of methane and other super pollutants.

The topline

Two weeks ago, we spent three days at the UC Davis 2024 State of the Science Summit learning about methane emissions from livestock and the entrepreneurs, researchers, scientists, and other organizations advancing reduction-focused solutions. In this newsletter, we'll break down five key takeaways, including:

1. A pasture problem: The majority of methane emissions don’t come from feedlots

2. Good breeding: Selective breeding is a ‘low-hanging fruit’

3. Missing MRV: Measurement, reporting, and verification

4. Less is more: A focus on demand reduction

5. The best of science: Great minds discussed great ideas

A pasture problem: The majority of methane emissions don’t come from feedlots

Before we even get into the solutions, one fact that reverberated across most discussions during the conference is that the majority of methane emissions from cows don’t come from feedlots (inclosed, high-volume animal operations). While 80% was the number we heard quoted most often at the conference, some estimates of the methane emissions that stem from livestock on pasture, where they aren’t handled regularly by humans, are as high as 90%. This matters because it can greatly impact the applicability of solutions designed to reduce methane emissions from livestock, for example, feed additives. While new feed additives will be among the first solutions to market (DSM’s Bovaer is commercially approved in Brazil, Canada, and the U.S.), their efficacy depends on consistent application (regularly being fed to animals).

80% of methane emissions from livestock also stem from lower to middle-income countries. On the whole, understanding that the majority of methane emissions don’t stem from intensively managed feedlot settings or dairy barns highlights the need for a diverse cadre of solutions. Across numerous discussions and one-on-one interviews with leaders in this space, we’ve heard that significantly reducing enteric methane will require a layered approach, meaning a combination of feed additives, vaccines, selective breeding, and other solutions.

Good breeding: Selective breeding is the ‘low-hanging fruit’

Feed additives like the newly FDA-approved Bovaer by DSM and our portfolio company, Alga Biosciences’ solution, will likely be fast to market and offer significant methane emissions reductions in situations where cattle are handled by humans regularly (30%+ CH4 reductions). Similarly, the development of vaccines targeting methane-producing bacteria is a very exciting area of innovation that could lend itself to cattle that are handled by humans less frequently, like grazing and global farmers. One of our portfolio companies, ArkeaBio, is currently developing one. Navigating regulatory approvals will extend commercialization timeframes meaning that there must be a faster solution if we are going to meet ambitious methane reduction goals like California’s SB1383 to reduce methane by 40% by 2030. 

A solution that isn’t as readily discussed in venture circles that offers a lot of promise is selective breeding. Considering the significant improvements and cost declines in genetic sequencing and other genetic technologies over recent years, selective breeding is an increasingly attractive approach to methane reduction. It’s worth noting that cattle have been bred for desirable traits for 10,000 years. Cattle have been so successfully bred for meat and milk production in the U.S. that dairy cows today produce ~33% more milk than they did at the turn of the century. With the average lifespan of a commercial beef cow being 18-24 months, these changes can happen quickly.

While the estimates of methane emissions reductions we regularly heard cited range from ‘only’ 10-20% via selective breeding, the benefits of selective breeding include that it’s a drop-in solution for herds where genetics are already actively managed (many operations in developed countries) and that the reductions are more durable than ones that depend on consistent application.

Missing MRV: Measurement, reporting, and verification

This year’s conference focused on mitigating solutions to methane emissions from livestock. Something that was less discussed was solutions that can measure and monitor methane emissions at scale. While technical solutions to measure methane from cattle exist today, like GreenFeed, a technology designed by C-Lock, these solutions are expensive and measure emissions at the individual animal level. 

Absent more innovation, whether using satellite data or other, methane emissions reductions in livestock will likely need to be sampled and measured at the level of individual animals and then extrapolated to larger populations and herds. That approach isn’t necessarily imperfect or inaccurate but will entail building robust and finely calibrated error bars. Regardless of how methane emission reductions are measured, at present, there aren’t robust and consistent protocols guiding this work across settings and jurisdictions. We’ll continue to invest in measurement and monitoring technologies and solutions designed to simplify verification, reporting, and standard setting. We will continue to talk about the importance of this area to all other work in livestock and enteric fermentation, too. 

Further, as part of this section, it’s worth noting that the policy landscape for enteric methane is still quite nascent. While forward-thinking jurisdictions like California and New Zealand have set targets for methane reduction, nowhere do we see strict penalties comparable to the EPA’s waste emissions charge or formal incentives for emissions reduction. This dynamic is likely driven in part by margin constraints; many farmers, especially in the dairy industry, operate with razor-thin margins and they face a very different economic calculus than oil and gas producers do. While punitive policies could perhaps be borne by stakeholders elsewhere in the animal agriculture supply chain, this line of reasoning goes to show there’s no one-size-fits-all approach to greenhouse gas mitigation policies across sectors.

In the absence of regulatory clarity, and as innovative products like feed additives enter the market, it’s critical we all collectively agitate for policymakers to set targets, policies, and incentives for methane emissions reduction to drive market adoption. 

Less is more: A focus on demand reduction 

By 2050, livestock production is projected to increase by 20%, and greenhouse gas emissions from livestock could increase by 46% under business-as-usual scenarios. While the conference was very focused on solutions to livestock methane production, there was little to no discussion of reducing demand for meat or dairy products.

Perhaps recent years have shown a lack of ability of plant-based alternatives to dent demand for animal products meaningfully. Perhaps that skepticism extends to the ability of cultured or cultivated meat technologies to scale and come down the cost curve. Considering global population growth will continue for decades and expanding middle classes in Asia will drive more demand for meat, it’s important to have a pragmatic approach to designing solutions for methanogenesis in cattle to keep emissions down as demand for meat and milk rises towards 2050.

All those things may be true, and we’d still suggest that a focus on demand reduction is still less prevalent in conversations than we would have liked to see. Not consuming products from animal agriculture remains one of the best individual levers to impact the Earth and its atmosphere. 

The best of science: Great minds discussed great ideas

There were 200 people at the conference this year, double the number last year, but still, a small number considering the scope and impact of methane emissions from livestock and agriculture, the largest anthropogenic sources.

To close on an upbeat note, the conference represented a convergence of the best science and technology have to offer. We met with experts in fields ranging from immunology and genealogy to nutrition and microbiology. All of these fields are readily being applied to livestock to the same extent, if not to greater extents in some cases, than they’re being studied and applied to humans. There are, in fact, more domesticated animals by mass than humans!

We left with a lot more hope. Not just for addressing methane emissions from cattle, but for the potential for cross-cutting, transformative solutions that help balance environmental, economic, and social priorities in coming decades. We’re excited to drive increased investment, collaboration, and conversation across all these fields and sectors.

News and policy

In major industry news this week, the methane-reducing feed additive designed for livestock, Bovaer, which is already commercially available in Brazil and a handful of other countries, was approved by the FDA for use in the U.S. The feed additive can reduce methane emissions from cattle by up to 30% with consistent application. One of our portfolio companies, Alga Biosciences, is working on a feed additive for livestock that reduces methane emissions more significantly. The first commercial feed additive approval in the U.S. paves the path for other additives, like Alga’s.

Odds and ends

If there is anything to take away from this edition of our newsletter, it’s that livestock is the largest source of anthropogenic methane, and reducing these emissions is incredibly important to reduce global temperatures within our lifetime. The easiest way to do that would be to, well, stop eating cows. Since that presents a global challenge for a multitude of reasons, investment in scientifically validated and scalable anti-methane and measurement technologies is both timely and imperative.

Thanks for reading the fourth edition of The Overview. If you are a methane or super pollutant focused company or want to connect on methane or our investment work, please reach out to [email protected].

– Team Overview