The Cow is the How: Elanco Sees Methane Reduction as New Value Opportunity

Elanco Animal Health CEO, Jeff Simmons joins Jim Cramer on Mad Money to discuss the company’s commitment to create solutions for farmers and ranchers that can reduce, measure, and monetize greenhouse gas emissions, including methane, which can help create new value to farmers and the food chain, as well as climate-neutral farms.

For nearly 70 years, Elanco has pioneered ways to keep animals healthier. Now we’re focused on making them more sustainable too. As we continue to expand and innovate in this space and introduce new solutions, Elanco aims to build a portfolio that reduces cattle emissions by 40-50%. Our initial focus is on methane as the opportunity.

Why methane? Through enteric fermentation, cows generate methane that is released through burps. Methane lasts about a decade in the atmosphere while carbon dioxide persists for up to 1,000 years. Methane is also 25x more potent than carbon dioxide at trapping heat – so small reductions can create an impact on temperature. If we can reduce methane emissions just 20-30%, we can make a real impact to reduce climate warming while making climate-neutral farms a possibility this decade.

Ultimately, it’s all about creating value. Elanco helps farmers benchmark and track their footprint, while providing new innovations that help reduce emissions. Once those reductions are certified, they can be sold as carbon credits in a new livestock carbon inset marketplace, creating a new and much needed value stream for farmers, as farm incomes are predicted to decline in 2024. As an inset market, CPG companies are able to buy the credits to both meet scope 3 emissions goals and create brand value for next generation of consumers that want more environmentally friendly products. 

To learn more about Livestock Sustainability at Elanco, visit Livestock Sustainability (elanco.com).