Dairy Cows, Methane and Carbon Credits

OMAHA (DTN) -- The Food and Drug Administration has approved a feed ingredient that reduces methane in lactating dairy cows -- a move that could help dairy producers get paid through voluntary carbon markets -- while USDA began taking steps to develop standards for carbon programs.

Elanco on Tuesday announced the FDA has approved its feed additive Bovaer (3-NOP) as the "first-in-class methane reducing feed ingredient" that meets safety and efficacy requirements for lactating dairy cattle. Elanco stated a tablespoon of Bovaer daily can reduce a dairy cow's methane emissions about 30%. One million cows using Bovaer could reduce emissions roughly the same as removing 285,000 cars from the road each year.

USDA has already provided $90 million in conservation grant funding to help prepare at least some dairies to take advantage of feed additives that lower methane emissions.

Jeff Simmons, president and CEO of Elanco, indicated the new feed additive would help dairy farmers generate income by lowering their methane emissions.

"This monumental announcement has the ability to accelerate the opportunity for climate-neutral dairy farming while creating a new revenue stream for dairy farmers across the country," Simmons said.

Gregg Doud, president and CEO of the National Milk Producers Federation, said the FDA approval of Bovaer would help the industry's pathway towards net-zero emissions. "Bovaer and other new technologies that reduce enteric emissions will help U.S. farmers be rewarded for participating in voluntary, producer-led sustainability initiatives, which is critical for the success of such efforts," Doud said.

Bruce Knight, a conservation consultant and former USDA undersecretary for marketing and regulatory affairs, said some steps will be needed -- including the use of USDA conservation programs -- but federal approval of an additive that confirms lower methane emissions sets up the dairy industry be recognized for emission reductions. Given that the additive affects emissions from each cow, it's also "size neutral" so a small dairy farm could take advantage of lower emissions as well.

"That's what's really positive about a feed additive," Knight said. "The dairy industry is very well poised to act quickly on the adoption of these technologies."

Cows emit on average 220 pounds or so of methane per year, mainly from belching. According to EPA, a metric ton of methane is roughly 28 times more potent than a metric ton of carbon dioxide. Bovaer works by suppressing the enzyme in the cow's rumen that forms methane, Elanco stated.

"By mitigating methane, the livestock industry can reduce the rate of climate warming and allow food companies and retailers to make meaningful progress toward their Scope 3 emissions goals," Elanco stated.

Elanco cited that farmers could receive an annual return of $20 per head or more "by engaging in voluntary carbon markets and securing USDA and state conservation programming."

"Reducing enteric methane is critical if we are to reach our climate goals," said Dr. Frank Mitloehner, CLEAR Center Director and University California Davis Professor and Cooperative Extension Air Quality Specialist. "It's exciting our farmers will have an important tool to do that, in Bovaer."

USDA SEEKS INPUT ON CARBON PROTOCOLS

The federal approval of Elanco's additive focused on reducing dairy emissions came on a day the Biden administration also rolled out a statement of policies by federal departments on "Principles for Responsible Participation into Voluntary Carbon Markets." The 12-page document detailed the need for standards including expanding market opportunities and reducing barriers for "farmers, ranchers, forest owners, small businesses," and others.

Agriculture Secretary Tom Vilsack also took a step in developing a USDA carbon standards program. USDA announced the department is seeking information from the public and stakeholders about protocols that should be considered by USDA in created a new "Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program," -- which is the main program created by the Growing Climate Solutions Act.

Essentially, USDA wants stakeholder input in how to create guidelines for groups or companies to verify carbon credit practices and help develop a list of "widely accepted voluntary carbon credit protocols," USDA stated.

"High-integrity voluntary carbon markets offer a promising tool to create new revenue streams for producers and achieve greenhouse gas reductions from the agriculture and forest sectors," Vilsack said. "However, a variety of barriers have hindered agriculture's participation in voluntary carbon markets and we are seeking to change that by establishing a new Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program."

RCPP SETS UP DAIRIES TO USE ADDITIVES

Doud also credited Vilsack for helping dairy farmers prepare to use Bovaer. Dairy companies, cooperatives and trade groups in several states were awarded more than $90 million in fiscal-year 2023 under the Regional Conservation Partnership Program (RCPP) to reduce methane emissions.

"FDA's approval of Bovaer now enables these key resources to move forward and sets the stage for dairy to build on this first round in fiscal year 2024."

Some of those RCPP projects include:

-- Dairy Farmers of America is the lead partner for the Climate-Smart Dairies Partnership awarded $22.8 million to reduce greenhouse gas emissions in dairies by providing feed additions to up to 50 operations with 140,000 head of cattle.

-- California Dairies Inc received another $21.4 million to "help kickstart the use of these feed additives" that would help reduce emissions in California dairies with the goal of lowering the GHG footprint of the state's diary industry by 35%.

-- Dairy groups in Idaho, Michigan Washington state and Wisconsin also received RCPP grant awards focusing on reducing methane by multiple strategies, including feed management.

White House fact sheet on voluntary carbon markets:

https://www.whitehouse.gov/…

USDA request for information on greenhouse gas programs https://public-inspection.federalregister.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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