August 31, 2023

 

Startup raises US$29 million to scale seaweed-based platform to slash methane emissions from livestock

 

CH4 Global, a startup dedicated to combatting methane emissions from ruminant livestock through the utilisation of red seaweed-derived feed supplements, has successfully secured US$29 million in its latest funding round to build a production facility in southern Australia, AgFunderNews reported.

 

Central to CH4 Global's mission is the Methane Tamer supplement, which has demonstrated the capability to curtail methane emissions from ruminants by 90%.

 

The newly acquired capital injection will be channelled towards the establishment and validation of a production facility situated in southern Australia. This facility is poised to generate seaweed suitable for supplementing the diets of approximately 30,000 cattle, with the potential to yield annualised revenues reaching up to US$20 million. The startup's agenda also includes plans to introduce larger-scale facilities capable of catering to millions of animals.

 

Numerous companies have delved into the development of feed additives to reduce methane emissions. Notably, red seaweed (Asparagopsis), has emerged as a frontrunner due to its exceptional effectiveness. However, there are challenges relating to production and scalability.

 

CH4 Global, which operates in both the US and Australia, strategically addresses the scaling hurdle through its distinctive land-based production system. Dr Steve Meller, co-founder and chief executive officer, said that their approach boasts remarkable efficiency compared to other seaweed-growing methodologies for feed supplements.

 

Dr Meller said that conventional tank-based cultivation of photosynthetic microorganisms, including Asparagopsis, faces a limitation as multiplying cells obstruct light access for neighbouring cells within the tank. Consequently, scalability is restricted due to relatively low cell densities achievable. CH4 Global overcomes this issue with its covered outdoor ponds, enabling expansive seaweed growth.

 

The startup's strategy involves the establishment of 160,000-litre ponds at their upcoming facility in South Australia. The design optimally accounts for fluid dynamics, ensuring even light penetration as densities increase. Meller said that this strategy eliminates dead zones and ensures consistent light exposure intensity.

 

Moreover, the economic prospects of CH4 Global's innovative endeavour remains promising, with projected profit margins exceeding 40%. Notably, the cost of goods (COGS) is notably lower, between four- to seven-fold and, in some instances, ten-fold, than competitors in the same sector.

 

The new production facility, scheduled to commence operations in mid-2024, has already allocated the seaweed supplement output to three strategic buyers: CirPro, Ravensworth, and an upcoming third-party collaborator.

 

-      AgFunderNews