SustainNOW Podcast - Learn from entrepreneurs & scientists about climate solutions
SustainNOW Podcast - Learn from entrepreneurs & scientists about climate solutions
36: Cracking Methane Emissions: A Seaweed Solution for Cattle
Today's episode promises to be a fascinating deep dive into the science of sustainability and the future of livestock.
Joining us today is Steve Meller, co-founder of CH4 Global, a company focused on reducing methane emissions from livestock—specifically, the burps and farts of cows. Yes, you heard that right! We’ll be discussing how a unique type of red seaweed can dramatically reduce methane emissions from the 1.5 billion cows around the world, contributing to a significant decrease in global greenhouse gases.
Steve shares his journey from a corporate career at Procter & Gamble to founding CH4 Global at the age of 58, driven by his passion for sustainability and his determination to make a real impact. We’ll explore the pivotal moments in his career, the challenges of scaling a startup in the climate tech space, and the innovative strategies his company is employing to make a difference.
So, if you’re curious about how we can address one of the biggest contributors to climate change through innovative thinking and technology, this episode is for you. Stay tuned as we explore the journey of CH4 Global and the exciting potential of reducing the impact of cow burps. Without further ado, let’s jump into the conversation with Steve Meller. Happy listening! 🌱🐄
The following description was created automatically by AI :)
What if you could revolutionize agriculture while significantly reducing greenhouse gases? Join us as we dive into Steve's incredible journey from a corporate career at Procter & Gamble to pioneering innovative solutions in sustainability. Inspired by American TV shows and driven by a passion for science, Steve transitioned from a career in neuroscience to becoming a key player in the fight against climate change. Discover how he leveraged his expertise to explore the potential of red seaweed, asparagopsis, in mitigating methane emissions from cattle, and the serendipitous moments that led him to this groundbreaking discovery.
Ever wondered about the real-life challenges and triumphs of entrepreneurship? Steve opens up about the loneliness and relentless decision-making that come with building a startup from scratch. He shares how mentorship, personal inspirations like Steve Jobs and Roger Federer, and the unwavering support of his spouse have been crucial in navigating these hurdles. Dive into the nitty-gritty of Steve's entrance into the agricultural sector, the complexities of seaweed cultivation, and how his work is paving the way for a more sustainable future.
Curious about the future of sustainable innovation in agriculture? This episode delves into the financial and logistical hurdles Steve's company faced in scaling seaweed production, from designing cost-effective growing facilities to ensuring the product's efficacy. Learn about the economic benefits for farmers, the challenges of tracking methane emissions, and the potential for premium pricing on low-carbon beef and milk. Steve's optimism and dedication to making a positive impact offer an inspiring narrative on how innovative solutions can address pressing environmental issues. Tune in to explore practical solutions for a greener world and find out how you can get involved.
Please check out show notes and background information: www.sustainnow.ch
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You are listening to Sustain Now. In this podcast, you will learn from successful entrepreneurs and scientists about the newest climate change solutions to address the climate crisis, from food and agri-tech over energy material innovation to circular economy. This non-profit podcast is hosted by Frederica. She is a tech entrepreneur and climate enthusiast. You can find show notes and background information on wwwsustainnowch. Enjoy the show.
Speaker 2:Steve, thank you so much for joining my podcast Sustain Now today.
Speaker 3:Thank you very much. It's a great pleasure to be here.
Speaker 2:Today, we will talk about burps and farts of cows, respectively of the methane gaze emitted by cows. I was surprised, actually, when I saw the fact that there are 1.5 billion cows currently living on our planet, which is representing the second largest livestock after chicken. Yes, so what made you interested in the first place in cow burps and farts?
Speaker 3:Oh, that's a longish story but let me see if I can change that A bit of an evolution of my career really has led me to this whole world of sustainability has led me to this whole world of sustainability and my corporate career the latter part of it in a global Fortune 100 company was a piece of the work was focused on how do we better improve the product profiles, the company's footprint.
Speaker 3:I got very deeply involved in that work and when I retired, about 12 years ago or so now in my spare time I was consulting with a variety of other Fortune 100 companies, often about this question about how do we improve our footprint, our sustainability profile, and serendipitously, I came across an opportunity about this unique property of this red seaweed called asparagopsis, and it was back in the days where there was very little known and the Australian government was doing work in secrecy around.
Speaker 3:The National Science Agency, csiro, was doing some work on this and I was aware of it and it just became apparent to me that in order to have impact at scale and well had set 2030 goals, we needed to do some things with urgency and growing this seaweed and looking to impact these 1.5 billion cows and also the 1 billion sheep and the 1 billion goats these are all ruminants that produce methane could be something that I could focus on. I had the skills that I developed around the science in my PhD research side. I had the corporate skills and understanding how do you build businesses on a global scale? I assembled a team of really capable people from large sector areas and that's sort of how we started. It was just being in the right place at the right time.
Speaker 2:And can you talk me through your different pivotal moments in life leading up? What are the pivotal moments where you say like okay, this is when I changed my career from corporate? Or can you talk me through the different life steps in your?
Speaker 3:life. That's actually a really good question that I don't think anyone's ever asked me, but I think about a lot, because all of us are where we are due to decisions that we've made, or sometimes decisions we didn't make. And as a person growing up in quite rural parts of Australia, I remember watching some American TV shows very early on and a lot of them were science-based and I decided at an early age I wanted to be a scientist. I had no idea really what sort but a scientist. And as my life evolved and I started university, I really got very deeply interested and I thought I'm going to be a scientist, I'm going to stay in the area I was, adelaide, which is the capital of South Australia, and that'll be my career path.
Speaker 3:And I started on my PhD and it got me thinking about how do you ask questions and how do you think differently about the approaches to things. And one of those first pivotal points for me came as I was nearing the end of my PhD what do I do next? Do I go be a scientist in Adelaide, like most people would ordinarily do, or do I take off, go see parts of the world and build my science career there, in research, which is what I chose to do. So pivotal point number one is I decided to leave Australia, where did you go to?
Speaker 3:My plan was to go to the US to a research group at the University of Iowa, in the middle of the United States, somewhere I knew nothing about. But I decided I was going to take the better part of the year and travel with a backpack through Africa before I got there. So I did that, which was an incredible experience at seeing and being deeply involved in continents and many different cultures, many different incredible experiences that I was able to be able to have. I think that helped and served me well of seeing how people live, deeply involved in aspects of agriculture, the environment, the impact that was going on I didn't realize it then of how big an impact and what that would be in later decisions in life. And so I ended up in Iowa and what I knew is I didn't want to stay in fundamental research for the rest of my life. I wanted to ask and answer bigger questions, the application of that science, and so after about six or seven years there I was recruited by Procter Gamble. Really knew nothing much about them either.
Speaker 2:What did you do in science so?
Speaker 3:my background was in life sciences, medical sciences and neuroscience, specifically the brain and understanding, and my specialty area in there was understanding how pain and chronic pain, how do we experience it, how does it cause, what are the ways in which we can better treat it and it was an exciting area just trying to understand how the brain operates. We still have only an inkling of that today, but it was incredibly exciting. But I wanted to see the application of things. So pivotal point number two is I chose to leave that area of science and move to a corporate career For the dark side, some may say. I think it was a wonderful experience. It taught me how to take things from the bench, the lab science, and build them into products that can actually impact people in one way, shape or form.
Speaker 3:But corporate life can be a little fickle and about a year and a half in they decided to close the whole research area that I was brought in to set up. So point number three was sat with the vice president and he said well, you could stay and do this sort of work. It's really interesting that much he said you could leave. Not sure where I would go. I'd moved across multiple states in the US and I'd only been there a short time and he said you can find money from inside the company to do things that interest you. So I thought that sounds pretty good. So I managed to scrape up over the next five or six years about $80 million from different parts of the company to do things that I thought would be good and impactful.80 million from different parts of the company to do things that I thought would be good and impactful. Turns out they made money for the company.
Speaker 3:Example Products and brands that have made their way into market probiotics that now help human health uncovered as an example. So they left me alone to do that sort of things and then, after a few more years, got asked to move into a corporate role to think about how do big companies work with small companies, what would that look like? This whole area of open innovation Got deeply involved in the company's sustainability goals around water and waste and energy and materials, the multi-billion dollar spend pools the company had and how does it become more efficient in it. And I also got very interested and involved in how does Silicon Valley work and how do you think about startups and how could they impact what you would do in a larger, more established corporate life. And that actually led me out to Silicon Valley. I lived out there for about a year and a half.
Speaker 2:When was that Like roundabout which year 2010 and 2011.
Speaker 3:And that became pivotal point number four because I met the woman that's now my wife out there in California, which is a completely different area and that sort of let me come to the conclusion that it's probably time for me to leave that career. So I was able to successfully get a retirement package from it, which meant in the US, lifetime healthcare coverage very important as we all age. So I retired and moved to California. We spent together about eight or nine years there.
Speaker 3:I got heavily involved in aspects of Silicon Valley and ecosystem and deeply embedded and then, halfway through that, started this company and that was probably pivotal point number five Do I at 57 or 58, do I go and be a startup CEO and what does that take? And that was actually a really easy decision, frankly, because it was something that I would say the large majority of my life was built up to and building the right types of skills, how do you create opportunities and how do you build businesses and I'd been doing that through much of my career and critically understanding the science and the questions you needed to address and the choices you would make as you have to scale things. So it's been an interesting path. I would trade it for nothing else. I wouldn't do it any differently, although it would come around very differently, but I'm excited and really thrilled to have gone through and be where I am today.
Speaker 2:So just to summarize, so you were 57 when you founded CH4 Global 2018?.
Speaker 3:That was actually probably close to 58 and a half, I think.
Speaker 2:Okay. So if you think about Silicon Valley and all of the other startup worlds, that's probably one of the rare people who are doing that. I think it's never too late. But what would you recommend other founders, let's say, who are already retired or thinking about it and maybe always thought I always wanted to create my own company? Is it too late or is it not too late? What would you recommend to them?
Speaker 3:if you have a passion for it, um, I would say, go do it. But what I can tell everyone is it is, uh, not for the faint-hearted. There are a lot of times that you'll spend a week thinking about what do I do next and how do I do it. You have not too many people you can bounce off the sounding boards. You can't do it to the folks you're working with in the company. You may or may not have a board at that stage.
Speaker 3:You can chat it with some of your friends and perhaps people out of your corporate or other lives that you may have come around, but it can be a little lonely in that sense because you're trying to build something from nothing. You have people working with you. You have their careers and their families that you're now responsible for. So there's a lot of those things that don't come with an academic path in life, that don't come with a government career in life, that don't come with a corporate career in life, which is why I say it's not for the faint-hearted. You have to be prepared to take on those responsibilities and you know, sometimes people, as they get on in life, have a great idea and a great opportunity but choose not to because of the bandwidth, because of the time. And what I would say to those folks is find somebody that has the passion and the time and work with them so you can mentor them, you can help, guide, build it into you. Don't let great opportunities pass by.
Speaker 2:Very nice and I think what you have described is loneliness and making decisions every day which can be crucial for the business, for yourself. I think that's what many entrepreneurs would describe, the same, and I think that's exactly what really distinguished, I think, the entrepreneurial life to a corporate life, that it can be very lonely, and I think it's nice that you address that Many only see the glory in it, but it's also the absolutely pain you have to go through with ups and downs.
Speaker 3:Most of those companies that are overnight successes took 10 years to get there, so it's a long path along there. It took 10 years to get there, so it's a long path along there. The only ad that I would have is folks who have been through life experiences over decades and decades, I think have an opportunity to provide back into younger startups, and my plea to many of those younger startups run with what you have. Do what you need to do. Find a way to have mentors or advisors that are folks who perhaps have retired from interesting areas. Find a way to bring their knowledge, skill sets and capabilities into what you do, because those experiences are incredibly valuable in the journey that you have to take.
Speaker 2:One of the most inspirational people I have is actually my mom. My mom would never tell herself that she's an entrepreneur, but she built real estate from like zero to everything what we had, and I was always so impressed because she'd never seen herself as an entrepreneur, but she always took the risk and was really trying to create something for us as a family. So I think she is extremely inspirational for myself. Do you have anyone you find very inspiring, and why?
Speaker 3:That's a very hard question for me to answer and I guess partly because I segment different pieces of my life differently, but the best way I'll try to answer it is people that break new ground in ways that we do things, the ways we think about things, and I meant fundamental change something about how we do it, how we approach it. So, whether it's someone from a science, whether it's someone from a sporting world, whether it's someone from a business, a commercial side, so rather than try to come up with a specific person, it's really the characteristics about them that I admire, and often it has to be done in extreme adversity, whether that's from other science areas saying no, that can't be right, whether it's politicians wanting to move against it, whether it's aspects of just how we think about people and groups. So it's changing how we think about things yeah, I agree, it's for me.
Speaker 2:for example, I'm really impressed by steve jobs not accepting reality. I think that was very impressive, but at the same time, I really like roger federer, you know, the swiss tennis player who has been the most charming, humble, nicest person on the tennis court I think I've seen so far, and I agree like I would take all of the different ones out of it and would create that inspiration for myself. What has been your biggest learning since you founded your company?
Speaker 3:Yeah, I think the biggest learning is that this is, frankly, a lot harder than I thought it was going to be, and I had been through scaling businesses, building billion-dollar businesses, multiple times in my career.
Speaker 3:But doing it as an entrepreneur, as a startup, as a founder, there are no strings holding you back or holding you up, and so that's the hard piece. I remember, you know, in the first year or two after leaving corporate life and might have an IT issue Well, I have no one to call, I have to figure it out. Moving into the company was like, okay, I have to raise the money, I have to find the right people to bring in, and so you have to do all of it. And I will add an incredible thank you to my wonderful wife, who has taken the burden of how we live from me, so she manages and does everything to how we live so that I can focus on doing what interests and excites me. So her ability to be able to not only do that but enable me to do what I do as as what's made that much easier to try to build a company and change the way that we can think about greenhouse gases, change the way that we think about food and agricultural systems.
Speaker 2:Can you bring me back to that moment? What has been sparking your interest into seaweed, into the agriculture side?
Speaker 1:of it.
Speaker 2:Can you pinpoint where you say this is super interesting? I really want to dive into that.
Speaker 3:So I can. I'm Australian originally, although I've now lived in the US for more than 36 years. I was actually in New Zealand giving a talk at a completely unrelated conference and focus. It was also a segment of a World Energy Council meeting and I was giving a keynote talk on the future of electrification and transportation. I mean nothing to do with what we did and I decided usually I wouldn't, but I decided to go to the lunch session after mine, where there were five politicians talking about climate and impact and two of them were ministers from New Zealand and I had actually had dinner with them the night before and that was really what caused me to go. It's like I knew how they thought privately on a dinner. You see how they want to talk publicly.
Speaker 3:A prime minister of a Pacific Island nation, who I won't name, was talking passionately about and showing pictures about building dams around low-lying areas of the island and actually permanently relocating people to Fiji, and it was really focused on the rising oceans and impact on mostly what's called the global south community those who haven't contributed much to greenhouse gases but are suffering the worst effects of it today and that struck me as I think I can do something about that. I was aware of this work that had been going on at Australia's National Science Agency because they had asked me to consult for them on some areas. I lived in California where, just prior to that meeting, the governor had passed the mandate to reduce emissions from cows 1.6 million dairy cows in California by 40% and to put it into law by 2040. So these three things came together as, like, I knew the technology and the platform that works and would ultimately be safe.
Speaker 3:I knew of a market, I knew of a big problem. So at that second it went off in my head. I said I can solve your problem. I just need to grow this seaweed at massive scale. And the company was actually founded that day with some other co-founders in new zealand that I shared the idea with, and they said we're in. So that's how it came about. That was a very specific one of those light bulb moments that we don't have that often. But it's joining these confluence of these things at the right opportunity and, of course, I was retired so I had time.
Speaker 2:Amazing. And how do you grow that seaweed and how did you test it? I know that you now have the first product into the market, tested, and that took like five years now to create. Right, talk me through these five years. How did you come from that idea which you just said and how it came together to having the seaweed ready and give it to cows as a test, et cetera? Can you talk me through these five years? How did it work out so?
Speaker 3:my co-founders were all New Zealanders, so we actually started the company as a New Zealand company, new Zealand headquartered company, and they had pretty extensive networks within New Zealand, and so we raised a little bit of money Not much, but enough to say. The first challenge we think we need to solve is how do we grow it? How do we what's called domesticate the species? How do we understand its biology enough to know how to grow it in as controlled conditions as we can, in as controlled conditions as we can? We learned fairly early on because it obviously grows natively in the ocean and in New Zealand and the southern part of Australia. Part of the species we work on, this, asparagopsis armata, is native, genetically native on the planet to those regions. So it was there part of the reason for starting it. It was there part of the reason for starting it, and we've worked out fairly early on that you can't really grow it in the ocean. It's there and trying to sustainably harvest it from its native environment is really not going to work, certainly not with the scale you need going to work, certainly not with a scale unit, and so trying to grow it on ropes and long lines like people do for other shellfish was certainly possible and we looked at that but concluded for a variety of reasons, it just wasn't going to be commercially feasible, and what I mean by that is you couldn't find a way to bring the cost down low enough to sell it into the market to provide the benefit you need. It doesn't mean you can't do it that way. You certainly can, and there are companies trying to do that today. But its financial feasibility was going to limit its ability to scale. So we moved to land-based systems. How do you grow it on land? And we do that today commercially. The world does that today commercially for various types of fin fish, various types of shellfish and some seaweeds.
Speaker 3:And this was a tricky seaweed because it had a multi-phased life cycle and you really needed to understand how it moved from one to the other. What sort of nutrients does it need? Because you're now doing it in seawater based tanks on land and you need to understand what those nutrients were and how to provide them at the right levels at different life cycle stages, and so that was a lot of hard work of just trying to work those out. We think we knew enough after a couple of years to be dangerous enough about how to grow it. The problem, though, is not just in the growing, and it's how do you then process it, turn it into a finished product. So we did quite a bit of work around that side of it too, and that took us a couple of years, and so we moved into the next phase.
Speaker 3:We did several things.
Speaker 3:We relocated the headquarters of the company to the US because we needed to start to raise more and more money and that's certainly a challenge in New Zealand as you move up the scaling of opportunities and I lived then in Silicon Valley and had some deep associations so we moved the company headquarters to California and proceeded to raise this next round of money, which was really focused on could you take what you knew and think about how do you provide a finished product to a customer?
Speaker 3:And what that meant is how do you take lab scale, bench scale stuff that goes on all around the world in academic labs, in startups, and how do you bridge the gap to doing it at commercial scale? Big things, big equipment, big processes, whatever they may happen to be, and often they don't scale very well. That's a challenge for many, many, many startups building things that are not necessarily software, but how you build what I'll call hardware Often a very important challenge, because not only do you have to figure out how to do it from an engineering and or a biology standpoint, but how do you do it in a way that's.
Speaker 2:Especially in the agriculture area food add, food additives and etc. It needs to be extremely price.
Speaker 3:It's extremely price sensitive exactly so our focus was could we do that? And we were successfully able to do that and sold the world's first products into the market in in mid 2022. The goal wasn't to keep supplying it, it was just could we find ways to bridge that gap around? How do you grow it, how do you process it, how do you formulate it? And that led us into the next phase of work, which we've been in here for the last year to year and a half, is how do I bring economics in line? How do I do this cost effectively? And cost effective has two pieces to it. How do I do it in a way that's profitable for me? But, importantly, how do I do it in a way where it's profitable for a farmer to use it?
Speaker 3:If it costs the farmer, they're not incented to do it unless regulations tell them they have to, and so there are approaches you can use and many different types of approaches around the world might use incentives. Governments might use incentives. Think back to the early days of solar. Many governments said well, look, I'll help you, I'll put rebate programs in place. The problem with incentives is they don't last free. Might get a different government in who says I'm going to make it go away. So you ultimately need to find a way, especially, as you said, in food chain. How do you make these cost effectively without incentives? And the really singularly important piece of that is how do I, as a manufacturer, produce it at a low enough cost that I can make profitable margins and you, the farmer, can value?
Speaker 2:And how far are you from that?
Speaker 3:We've achieved that, so we're in that place now and building the economic model for building multiple facilities in different places around the world.
Speaker 2:So what's the biggest facility you have right now and how much does it produce?
Speaker 3:We're in the process of building one that's tenfold a little more than tenfold larger scale than the pilot, what I'll call pilot facilities we have. Now I'll do it on amounts of liters of water, of seawater, that we have. The pilot facilities are perhaps around 300,000 liters. The first phase of this facility will be around 2 million liters. When it's fully completed it will be around 12 million liters.
Speaker 2:And how many, just to get a feeling. How many cows can you feed with that?
Speaker 3:40,000 or so. As we improve the efficiency, that will go up to perhaps 150,000 or so. And what we think about is how many of those do we build? And so we now have demand from commercial partners, some that we've announced, some that we haven't yet announced, but will, by the end of the year, for in excess of 10 million pounds. So we'll be building the facilities.
Speaker 3:Now think about it. If I have to build the facilities, I have the customers. I know how to build the product now. I now need to get someone to loan me capital to build those facilities. They're not inexpensive to build. The only way someone is going to loan me sufficient capital is on a purely financial metric is can it be profitable? The only way it can be profitable is if I can bring costs down low enough, and that's really where a lot of our focus for the last few years has been how do I grow it and how do I process it in ways that is incredibly cost effective, much lower than what anyone else is doing, and it's gotten us into the position where the facilities we build will be highly profitable 50% plus gross margins on the business in view.
Speaker 2:You think about the sufficiency and et cetera. Was there one or two things you think that really made a difference in the production, or what really made a difference in making it really scalable?
Speaker 3:So in the growing, the key thing about when you grow the seaweed is it grows, it increases in its density. You grow it in a pain vessel and as you increase the density, one of the key nutrients not the only one is light. They're a plant, they photosynthesize. We knew about that. You can't get light to it. They don't grow very well. It's pretty simple. And as they increase in their density, light can't penetrate vessels very well. So you either need to grow them in cold, skinny vessels that are clear so you can get enough light in there, or you need to add extra light. Both of those have issues with them. So to grow them in cold, skinny, clear vessels, which many companies are trying to do now, the issue is you've got to buy them at a certain cost to them. You have to put them on the facility floor and take up a certain footprint. They have a certain energy use because you've got pumped flowing material through it. You have to have certain amounts of lights on each of them, and so all of those add to the costs and this volume of those vessels. Individually they vary. They can vary from 1,000 liters to maybe 5,000 liters, and you need to grow tens, hundreds of millions of liters worth. So we took a different approach and said it's too costly to do it that way. How do I build something that's a tenth, twentieth of the cost but perhaps ten to twenty-fold larger in volume? So we've patented and designed these operational pieces. We call them ponds it's not a particularly good word for it, but they have a certain shape to them, designed to optimize the flow of nutrients, the penetration of light, but really we basically dig them in. It's much like a swimming pool sort of thing, although not concrete lined, but they're lined in unique ways and they're very low cost. So that was one of the sites I'm growing. These vessels are 168,000 liters in size compared to 5,000 or 3,000. And on an installed dollar cost they're at least tenfold lower in cost.
Speaker 3:The other side is when you process it, and so all seaweeds on the planet today, as part of their natural metabolic cycle, produce a variety of these halogenated volatile materials. They're the actives, and many people will talk about one, active bromiform. It's not the only active, it's certainly the highest concentration in the seaweeds, but all seaweeds produce them. This specific species has a unique facet, at least of those that have been looked at today, is that it stores them and normally it's just released back into the ocean environment with the cooler rates of the atmosphere. But these ones store it and it's done it as its natural defense mechanism in the ocean, because this is a beautiful three-dimensional Christmas tree reddish-purplish structure in glistening water and it's very attractive for other marine species to nibble on. Now they nibble on it with this materials in there and the animals don't like it. They go away.
Speaker 3:And so these little packages that nature has created, the whole intent is how do I preserve the integrity of them when I process them to turn them into something that I can provide to cows in a way where the integrity of those activities is there. You can't eat it, you can't put it under pressure, there's all sorts of things you can't do. So working out how to process it that you can preserve 90% to 95% of the integrity and do it at a cost that's tenfold lower than any other way to do it. Again, we've managed to achieve that. We filed CPIP on it and that's what we're actually building into the facility now.
Speaker 3:So we've brought those costs down in a way where they're profitable for us. Profitability from the farmer simply comes from a premium on the beef or the milk. It's a very small premium that's needed. Less than 5% premium covers the entire cost Because you don't burp the methane out anymore. The carbon stays in the rumen and can be used for energy. Cows lose about 10% of their total energy costs by burping out methane, so that means the cow can perhaps eat less feed and have the same level of productivity. For cost savings for the farmer, that cost savings is enough to pay for the product, the prices that we brought it down to ah, okay.
Speaker 2:So so to summary is like when you feed that I guess it's like an additive, right, it's not primarily what you feed less than half a percent of their total diet. Okay, very, very small okay so it means it reduces the burps and the farts kind of way from the cows and because that needs energy. If you have less of that you actually have the same gain of weight with less food you need to give.
Speaker 3:Yes, got low methane or low carbon beef and milk with a significant impact 80% to 90% reductions in here that certainly some subset of consumers are willing to pay for. And it's finding those early markets. And that's what we do with our commercial partners is seek the ways to be able to do that and bring it to commercial products.
Speaker 2:And your target customers. It's only indirect farmers right. It's more the food producers for the farmers.
Speaker 3:So we've gone, because my corporate career was in Procter Gamble. On the consumer-facing side, we think about customers for us that are really more like the consumer-facing ones who manage their value chain, really more like the consumer-facing ones who manage their value chain. Some may own it, some may buy from it and hear, and they can turn back to their value chain and ask for these low-netain approaches and or supply the materials into them. So, yes, our focus is the farmer will ultimately be the user, but it's the big customer for us is the large global corporates or, in some cases, countries.
Speaker 2:Coming to what is actually the problem. If we're talking about methane gas from cows, what kind of magnitude are we actually talking about?
Speaker 3:So it depends how you measure it, and this is part of the dilemma we have today. It has a certain impact. Methane is more impactful on global warming than is CO2. And there's at least two accepted metrics that people use today. If you measure its impact over a 100-year timeframe, it's 28 times more impactful than CO2. If you measure its impact over a 20-year time frame, it's about 80 to 84 times more. If you measure its impact over a 10-year time frame, it's more like about 110 to 120 times more.
Speaker 3:So all governments around the world today who have been evaluating the inventory of methane that's produced in their countries used the 100-year timeframe, and they've used that for decades and decades, because the goal was how do we focus on long-term benefits? The issue we have today is the world set 2030 emissions reductions goals 2030. It's closing in on the end of 2024 now. So you ask yourself we did that in 2015,. You ask yourself well, how have we done as a planet, Not how has a country done? We all share the same atmosphere. How have we done? And the answer is really, really badly. We get an F on the report card. We have not. Not only not have we not decreased it, it has continued to increase.
Speaker 3:So to me, logically, why would I use a 100-year time frame? Maybe why would I even use a 20? Because methane's around in the atmosphere for about 12 and a half years. It turns into CO2. After that, by the way, it just doesn't go away. So how impactful is? That's the question If you use the 20-year timeframe. The amount of methane produced from cow, from the 1.5 billion cows on the planet, is larger than the total greenhouse gas emissions of China. It's two and a half times larger than the total US greenhouse gas emissions. It's somewhere between seven and eight-fold larger than the total EU greenhouse gas emissions. It's larger than number two, three and four countries put together. So it's a big problem, but it's only a problem if you don't have a solution.
Speaker 2:How much can you reduce methane per cow? Is it a 20% reduction, 40% reduction?
Speaker 3:Conservatively it'll be 70%. The data that exists on the quality of the product that we use certainly is in the 90-plus percent range. When you move into things that happen on farm and the variations, it will probably settle closer into the end goal of 70% average for crossing. That's still a pretty impactful benefit.
Speaker 2:And how many cows have you tested it now?
Speaker 3:Only in the thousands of numbers in here, but that will rapidly scale up over the next coming years. We'll have the agreements in place for the demand for well in excess of 10 million cows by the end of the year and that's the facilities we'll build over the coming years to be able to supply at that scale. And that's just with partners that we're aligned with now.
Speaker 2:How do you track methane from cows?
Speaker 3:So that's a really good question and I think the world is tying itself in knots over this. So there's a variety of ways to measure it. There's the tried and true. I'll call it. The original scientific method is you put them into what's called a metabolic chamber the cow's in. There you measure everything that the cow eats and drinks and respires and puts out from both ends. You measure everything and that way you can understand what those reductions are with a very, very high degree of accuracy. But you can't do that when you start to do it on thousands, tens of thousands, millions of cows. So what's been developed is various ways to do that with still pretty good accuracy, and there are a variety of those tools today that are currently used.
Speaker 3:But it's sort of like when you drive your car today, drive from place A to place B you don't measure what are the emissions of that car. From place A to place B, you don't measure what are the emissions of that car. There's an accepted level that that car puts out from that type of petroleum or gasoline that's put in, or electrons, if that's the case, and you have a measure of how many miles per gallon and or how much CO2 of the water is put out and what will evolve to is the same thing and it depends on the quality of the input. So if you have good quality material you use and the data exists, there are third-party groups out there who take all of that data and evaluate it and say well, your product for those types of circumstances will have, on average, 70% methane reduction. So because it's been validated against both the science as well as the output metric, those farmers are eligible for the 70% reductions associated with it.
Speaker 3:So, that's what we're evolving to. Don't think we're quite there yet, because the tools, the amount of data and the incredible variability in the quality of product, more said, is, if you have crappy product, you're going to get crappy data. You have good product, you get good data, and so sorting that out is what's going on now.
Speaker 2:Does it depend on the actual cow or the cow race, because I think I've been reading about the Wagyu beef. In Australia there has been a test where there was only 30% reduction they could actually measure. Does it depend on that or is it just the variation still in the early phase, where you sometimes have good results and sometimes bad results?
Speaker 3:So, I think that particular study is more related to the quality of the material that was used. However, your question on cows is actually an important one. Counterintuitively perhaps for many is cows that eat grasses grazing in the fields in the fields put out up to twice as much methane as those that eat grains that are provided to them in feed. You know managed feed scenarios and that's simply the diet and diets certainly vary across the world as to how methane fits out. An average cow across the world makes about 100 kilos of methane a year, but that variation can be anywhere from 70 to 150 or more, but on average it's still a reasonably tight range.
Speaker 3:Different cow breeds can do it. Dairy and beef tend to have slightly differences in here, so we could drive ourselves all nuts by trying to carve it up for every group, or we could sort of say we've got a big enough tool, let's start somewhere and start to make an impact, which is what ChoiceGrid does Good quality product focused initially in beef feedlots. Products that will come out subsequently in each of the years focused on more and more different types of cows, grazing dairy and grazing beef. But it's all focused on quality of products and aligning that with commercial partners.
Speaker 2:You talked a lot about the last five years. How will be your next 12, 18 months look like? What are you going to focus on?
Speaker 3:Bringing the commercial facility fully online by the end of the year, january or so. Aligning those next three large-scale commercial partnerships and announcing those for the goal of getting to 10 million pounds. Building the next few facilities that are going to $10 million. Building the next few facilities that are going to be larger scale, much larger scale, to start to meet those demands. And validating the financial metrics associated with it. So you've got quality, you've got market performance, you've got the ability to bring costs down low enough for that profitability. So it's really validating the whole sector and the segment is what the next 18 months is about.
Speaker 2:What is your end goal or your long-term vision for the company?
Speaker 3:The day we started the company, what we used was we want to have scale, impact and greenhouse gas emissions with urgency. What we translate that to do, and our goal is gigaton productions by 2030. That is an incredible challenge to get to and it's simply a matter of how fast and how quickly we can build facilities. And it's simply a matter of how fast and how quickly you can build facilities. The number of cows are there, the demand is there and it's validating these pieces around the financial metrics of profitability. If you can't be profitable, nobody is going to lend you large-scale capital, it doesn't matter how good the story is. You have to get the economics right, both for yourself and for farming, and you cannot rely long-term on incentives. That's the hard work.
Speaker 2:That's the hard work. Exactly exactly, especially in the current investment environment, where it's not that easy especially in climate tech etc. To raise.
Speaker 3:And to be clear, this is not intended. This is no silver bullet. I don't particularly like that phrase, but it's not a silver bullet. We have to change the food systems and transition them, but that's a decades-long path. See that by 2030, we have to figure out how to feed 10 billion people. We have to do it more efficiently on the land. We use, the water we use, the resources we use, but that is decades in the changes. Today, we still have the issue of that methane problem. It's larger than the emissions from the oil and gas industry globally. Now, while we continue, while the world continues to work on transitioning those food systems and that's really where we're focused is how do we provide the tools and the capability to do that in a more immediate term or an impact on greenhouse gases?
Speaker 2:Are you a vegetarian?
Speaker 3:I am not a vegetarian. I almost be probably almost an anti-vegetarian, and that doesn't mean I'm against it whatsoever. People's choices are certainly their own. I'm just not a big vegetable eater. I love fruit. I probably eat less red meat these days. It's more pork and chicken and the like. But no, I'm not a vegetarian.
Speaker 2:Is there any side effects for cows providing that additive? Is there anything right now which still needs to be reviewed or anything known as a side effect for giving that to cows?
Speaker 3:So the short answer is the only side effect is you get more productivity. Cows do more because you're providing them more energy, because it's not being burnt down. However, if you give too much or you try to synthesize the actives and give them at higher concentrations, you potentially get yourselves into challenges that need to be solved. They may or may not be challenges, we just don't know. Yet We've taken the approach is nature's, provided us with perfect package? Our job is to preserve the integrity of that whole plant. How do we do effectively Remove the water from it, provide it in the forms that cows can use at that concentration and leverage the nature-based approach for it, rather than try to extract things out of it or synthesize new molecules that I have to put into it.
Speaker 3:They may or may not be useful in the market. They may or may not be scalable. It's going to come down to costs. It's going to come down to regulations. We've taken the choice to try to solve challenges of bringing those costs down and we think we've found the right ways to do that now.
Speaker 2:We talked a lot about methane and the ARC2 and et cetera, a lot about footprint. Do you have, as a company, a net zero goal?
Speaker 3:We certainly do, and as we produce products, we dramatically change that. Think about any company, and today it's scope one and scope two and scope three, which is often the biggest one in here, reproducing a product that has dramatic reductions in scope three From our operations. Today it's certainly. How do we become more efficient, both in leveraging renewable energy sources where we are, the materials that we use, and so today the first version is not where we'll end up, but we're building the first version keeping in mind, keeping costs and carbon footprints as low as we can and then developing the plans that allow us to reduce that over time.
Speaker 2:Very nice. Wow, I learned a lot today about cows and feeding. Impressive what you can all do, and it also makes me hopeful that there is actually a lot of more short-term solutions out there to tackle the climate crisis. I always ask the question at the end of my podcast what makes you confident that we will solve the climate crisis?
Speaker 3:I'm not confident, to be honest. I am hopeful I could use the words that you used in here, because I agree with you 100%. There are many things we could do today that perhaps make a modest impact but collectively added up can do so. I'm not sure societally we're set up well to do that today, so that's why I would say I'm not confident. I'm hopeful because entrepreneurs, startup companies, some forward-thinking groups are coming up with some incredibly efficient ways to think about some of those large impacts after food systems, energy systems and how do we bring costs and efficiencies into play.
Speaker 3:The reason that I guess I'm not confident is the time frame we have is running out and if you look at the history from 2015 to now that's nine years We've done an incredible amount. We've spent trillions of dollars on the planet looking at things and the end result, the single measure. Countries will talk about we've done this and our groups will talk about that companies but the single measure we have as a planet is what is the concentration of CO2 and we've done in the atmosphere and they haven't gone down. I got six years to figure that out and the goal was a 50% reduction. And when it's gone up? That's what makes me hopeful, but not yet confident.
Speaker 2:I understand. I can relate to that. If people want to know more about you or your company, how can people reach out to you?
Speaker 3:The website we have, wwwch4globalcom, is pretty informative. It has relatively easy ways to connect and contact both with the company and with me. Happy to engage with anyone that wants to. We're fairly active on various aspects of social media, in particular LinkedIn a more professional-focused piece on there and so we are contactable and again through the website, it's probably the best channel to be able to get access so you don't have to be looking and trying to solve that every day.
Speaker 2:Fantastic, Steve. Thank you so much for joining my podcast today. I really enjoyed the conversation and I learned a lot today.
Speaker 3:You're most welcome. Thank you very much for taking the time to be able to share this with your listeners. I'm excited for possibilities, hopeful, and we're certainly going to do the best we can.
Speaker 2:Thank you for joining today's episode. You can find the show notes, background materials and contact details of our guests on our website, sustainnowch. Follow and share our podcast on any platform available. Do you have a comment or interesting solution to take a deep dive? Please don't hesitate to go to our website, sustainnowch, and write us an email.