Big money in farming methane-reducing red seaweed: Agrifutures, CommBank research

New research has spelt out the capital and infrastructure requirements, and the significant market opportunities on offer, from farming asparagopsis taxiformis on a large scale.

The push to get the innovative solution in the hands of Australian lot feeders quickly is strong, given the contribution it is likely to make to the red meat industry's ambition to be carbon neutral by 2030.

Rural research organisation AgriFutures and the Commonwealth Bank funded the latest research, which found demand for asparagopsis could very quickly grow to be in excess of 26,000 tonnes a year.

The emerging red seaweed production sector could reach $1.5 billion, employ 9,000 people and reduce Australia's greenhouse gas emissions by 10pc by 2040, it found.

Trials have shown that if the diet of livestock included just 0.4 per cent asparagopsis, methane emissions could be reduced by up to 98pc, with no negative effects on beef quality or feed efficiency. Methane is reduced by the compound bromoform in asparagopsis.

That amounts to real potential to revolutionise the approach to mitigating livestock emissions, says AgriFutures Australia general manager business development Michael Beer.

As such, a better understanding of the cultivation, processing and product formulation needed, and the investment required to set up commercial supply, was required.

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Commercial operations such as Tasmania's Sea Forest and CH4 Global in South Australia are in the pilot commercialisation phase, producing against an aquatic background but Mr Beer said there were limitations around accessing marine leases and this was also a highly regulated production environment.

The new research indicated land-based aquaculture offered greater control over the operating environment than ocean-based systems, including water quality, temperature and harvesting frequency.

"Given these advantages, land-based systems could become the dominant production system for asparagopsis," Mr Beer said.

Some commercial feedlots have started small trial work growing the crop themselves in conjunction with seaweed producers.

The researchers acknowledged the water facilities on feedlots given waste recycling, and the fact they are typically in close proximity to water resources.

However, Mr Beer emphasised asparagopsis production required a vastly different expertise to beef production, or other cropping of feed for cattle.

The market opportunity in its own right was significant, he said, given the feedlot sector constitutes 30 to 40pc of Australia's total beef production.

The scoping study's capital estimates vary widely - a reflection of the infancy of the industry and lack of real-world data - from $132 million to $1.62 billion based on 100pc adoption of asparagopsis by the feedlot sector.

Mr Beer said a lot would depend on where and how new 'greenfield' farms were established, or whether existing facilities, such as mussel farms, were repurposed.

Scale would undoubtedly drive down the costs of establishing and operating these facilities.

The research found payback on assets would be very quick. Within a year, commercial quantities could be produced on a farm, Mr Beer said.

The study said some stakeholders were emphatic that capital was not expected to be a constraint for this industry, given its significant promise and attractiveness to ethical investors. It did, however, note demand for asparagopsis could be substantially influenced by competitor products offering methane mitigation, competitor countries and competitive applications for asparagopsis itself.