Aussie-founded startup raises $4 million to help save the planet from gassy cows

CH4 co-founder Dr Steve Melle

Dr. Steve Meller, co-founder and chief of CH4, with a bottle of asparagopsis armata seaweed and a cow. Source: supplied.

Startup CH4 Global has raised US$3 million ($4.1 million) in seed funding, to scale up production of its seaweed supplement that helps gassy cows reduce their methane emissions.

Founded by a crew of Aussie, Kiwi and American scientists, CH4 is setting out to grow a very particular type of seaweed — asparagopsis armata — on an industrial scale. When processed in a particular way, the plant can be used as a food supplement for cows, hugely reducing each animal’s methane output.

Speaking to SmartComapny, CH4 co-founder and chief, and Aussie native, Dr Steve Meller, explains the business was spun out of research from CSIRO and independently verified by various researchers.

If this supplement makes up just 1% of an animal’s feed, he says, it can reduce its methane output by 90% to 95%.

And those bovine gasses are a bigger issue than you might think. There are 1.5 billion cows in the world, Meller says. Between them, they’re emitting more greenhouse gasses, in the form of methane, than China, the worst offending emissions country in the world.

The funding comes from a group of family offices and private investors from all over the world, as well as from government innovation groups, including the New Zealand Provisional Growth Fund, South Australian Research & Development Institute, the Australian Fisheries Research Development Corporation, and the South Australian Landing Pad.

All of this speaks to the first tenet of CH4’s business — to act with urgency.

The Paris climate agreement deadline is just 10 years away, Meller notes, and he doesn’t have much faith that, as a planet, we’ll make it.

“We’re way behind where we need to be, from a political standpoint, from a technology standpoint, in every single possible way,” he says.

Partly, Meller says the world is just not on the right trajectory — until this year, annual emissions have been increasing each year, not decreasing.

But he also believes people are pinning their hopes on technologies that are still in their early stages of development.

“Collectively, I personally don’t believe the world can achieve Paris goals utilising those approaches and those approaches alone,” he says.

In 2020, with global travel disrupted by the COVID-19 crisis, greenhouse gasses for the year are expected to have decreased by 8%, he says.

In order to hit the Paris goals, we will have to see emissions reduced by a further 6%, year-on-year, for the next 10 years.

“The world is getting closer to reaching a climactic tipping point,” Meller says.

“If you had in hand a tech that unequivocally works, has been shown to be safe, and you could grow it at massive scale, wouldn’t you want to do that?”

Sustainability meets social change

The second tenet of the CH4 Global business, however, is about making all of this worthwhile for the farmers.

“Dairy farmers and beef farmers are under extraordinary pressure, globally,” Meller says.

Economically, they can’t be expected to put their hand in their pockets for something that’s going to benefit the planet, with no gains for their business.

With farmers having to pay for the supplement, the team had to make sure that investment would pay off.

Value can come from premium pricing for a “low-carbon cow”, he explains.

The supplement also serves to make the animals’ digestive systems more efficient, meaning savings on feed.

“Collectively, all of that will put money in the farmer’s pocket,” Meller explains.

Finally, the third tenet is to collaborate with Indigenous and First Nations communities wherever GH4 operaties.

In Australia, it’s partnered up with the Narungga Nation corporation in South Australia, to build a commercial-scale processing facility. There are also several collaborations with Iwi, or Mauri communities, in New Zealand.

Three of the startup’s New Zealand-based founders are Maori themselves, Meller adds.

“These are groups of people around the world that have been under-served and under-represented,” he says.

“So we’re very much partnering to drive social change, economic impact and cultural values.”

Giving us a chance

This $4.1 million in funding will allow the startup to scale.

Already, the CH4 team has proven the seaweed can be cultivated, and that it can be processed in the right way.

There are particularities here regarding the key ingredient: bromoform. Every species of seaweed produces this, Meller explains, and it can be harmful if released in large concentrations.

But, in this particular species, it’s stored internally. CH4’s objective is to keep the bromoform inside the seaweed’s gland cells.

“It’s created nature’s little packaging, perfect for the cows,” Meller says.

This means getting the processing right is “critically important”, he adds.

“We believe we’re well ahead of everyone else in understanding the way to process it.”

Most of the funding is going towards building a series of one-hectare plots for growing the seaweed, so the team can figure out the optimal conditions.

It’s a stepping stone towards building a 20-hectare commercial-scale facility next year, which will be the first of its kind in the world, Meller says.

The team will be researching the conditions of the water and figuring out ways to maximise growth, eventually producing enough product to feed some 10,000 cows.

By 2021, “when we prove the economics, and that we can do all of those things”, things will really ramp up, says Meller.

In fact, the team is already working towards another, larger funding round, and it’s already in conversations with large-scale industrial suppliers that could lead to facilities being built at a larger scale, and in more places.

“This year is focused on validating that one hectare,” the co-founder says.

Ultimately, Meller says this product, and others like it, could buy us some time.

Many climate technologies are focused on addressing the levels of CO2 emitted into the atmosphere, he says. There’s less of a focus on methane.

But, Meller argues we haven’t honed or perfected any of those technologies yet, and they won’t make enough of a difference quickly enough.

Methane is something we can address now.

“If we can achieve the reductions that we need by scaling this technology across the world to achieve that impact, the world now has at least a couple more decades for all of those decarbonisation technologies to mature sufficiently,” he says.

Without addressing the methane problem, “we have no chance”, he adds.

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