Describing reducing greenhouse gas emissions from farming as “one of society’s most significant opportunities of the decade,” animal health company Elanco and nutrition, health, and sustainable living-focused science-based company Royal DSM announced today the launch of a new strategic alliance bring DSM’s methane reducing cattle feed Bovaer to the U.S. market.
Elanco has secured the U.S. licensing rights to develop and commercialize Bovaer, currently approved in Europe, Brazil, Chile and Australia. With an estimated global market opportunity for livestock methane reduction of $1 billion to $2 billion, Elanco expects Bovaerto have blockbuster annual revenue potential in the U.S. market of over $200 million annually.
Agriculture has emerged as a major focus area for climate action, as the sector accounts for a significant proportion of global greenhouse gas (GHG) emissions, and among the most difficult areas to address climate impact. According to the UN’s Food and Agriculture Organization, total emissions from global livestock represent 14.5% of all anthropogenic GHG emissions.
Rapid reduction in methane emissions is seen as one of the most effective near-term actions that can be taken in order to help achieve the global climate goal to limit warming to 1.5°C. Methane is an extremely potent greenhouse gas, with as much as 80x the warming power of CO2. At the COP26 conference in November, over 100 countries, representing 70% of the global economy launched the Global Methane Pledge with commitments to cut global methane emissions by at least 30% by 2030, compared to 2020 levels.
Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of Royal DSM, said:
“This alliance will help us realize Bovaer’s potential as a powerful solution with a significantly positive impact on the planet. In addition, and fully aligned with our purpose-led performance-driven strategy, the alliance enables us as DSM to monetize our long-term innovation faster.”
According to Elanco, studies and on-farm trials in 14 countries showed that the product reduces enteric methane emissions by about 30% for dairy cows, and even higher for beef cattle.
As part of the new strategic alliance, Elanco will be responsible for the U.S. approval process, commercialization and product supply, supporting DSM supply in markets outside the U.S. Elanco will evaluate the regulatory submission and manufacturing options to bring Bovaer to the U.S. market as soon as possible, with the State of Indiana already indicating its support for expanded manufacturing investment in the state.
Today’s announcement follows Elanco’s launch earlier this year of new tools aimed at advancing U.S. livestock sustainability efforts, including an analytics engine to assess the carbon footprint of cattle operations, and the launch of Athian, a new company to help the cattle industry capture and claim carbon credits.
Jeff Simmons, President and CEO of Elanco, said:
“We are excited to partner with DSM to start the process of bringing this game-changing innovation to U.S. livestock producers. It will further strengthen Elanco’s efforts to create the livestock sustainability market and the next era of value for farmers by adding to our efforts to reduce, measure and monetize emission reductions, including Experior, Uplook and Athian. We are eager to work with regulators to bring a unique innovation like DSM’s Bovaer to the U.S. market as quickly as possible to support farmers and positively impact the climate crisis.”