The commercialisation of an Australian technology that turns a native seaweed into a livestock feed is thrusting agriculture and aquaculture to the forefront of the world’s fight to arrest climate change.
A large glass flask sits in prominent view on dairy farmer Richard Gardner’s sideboard for all to see. It’s an unappetizing-looking reddish oily mush, but for the Tasmanian dairy farmer and his family it represents one of the most exciting technological developments in their industry’s modern-day history.
In fact, for Richard Gardner, it represents their license to farm into the future. It is also the family’s personal affirmation that our planet needs their help; and the help of all livestock farmers. It’s why he has kept this one flask for posterity. The content of the flask is a feed supplement made from Asparagopsis seaweed. It is the product of Australian research and subsequent commercialisation by Tasmanian start-up company, Sea Forest – and it stands to become a breakthrough world-wide in helping to mitigate climate change. When used as an additive in livestock feed, Asparagopsis has been proven to reduce the animals’ methane emissions by 98%. When you consider the world’s vast flocks and herds are responsible for 40 per cent of this greenhouse gas which traps 30 per cent more heat in the atmosphere than carbon dioxide, the potential impact is clear.
The development has already captured international attention, but behind the headlines is a classic business development story: the vision, courage, doggedness and determination needed to turn great science into a strong commercial enterprise. In the case of Sea Forest, and its people, there has been added pressure to succeed because Asparagopsis is endemic to Australian and New Zealand waters. This is the region where it has to be cultivated; where a whole new aquaculture industry has had to be developed from scratch. It is where the knowledge needs to be created (and commercialised) for other countries to cultivate Asparagopsis, albeit in land-based production facilities.
It is also a case study in the pay-off that can come from government support, in particular the Australian Government’s Entrepreneurs’ Programme, and the role of business mentors when building a corporate team from people with science and business backgrounds that are often not a natural fit.
In early 2021 Sea Forest was awarded the maximum $1 million grant through the Government’s Accelerating Commercialisation service. Usman Iftikhar, a Commercialisation Facilitator from i4 Connect which runs the service, and who works with the Sea Forest team, says that earning the full grant was a reflection of the strength and vision of the company’s submission.
Partnering science and business
“We see a lot of good research, but to take a technology beyond the laboratory requires a person or group of people to be absolutely committed to the commercialisation process,” he says. “It usually requires partnering and it works best when someone can come in from a commercial background and make the effort to understand how a technology works and what it is capable of. But that said, a businessperson’s thinking or priorities is likely to be quite different to the technologist. They might agree on the goal, but not necessarily the pathway. The commercial partner, for example, might initially be focussed more on immediate ‘low hanging fruit’ to generate revenue or investment to reach progressive milestones. So the right partnerships and conversations and trust-building becomes crucial and that’s where our guidance comes in.”
Sea Forest and the development of cultivated Asparagopsis had its genesis in 2006 in research by the CSIRO, followed up by Professor Rocky de Nys at James Cook University. The research identified the properties of the Asparagopsis for methane abatement. The science was published and peer reviewed, but it was still not known how to take this laboratory achievement to large-scale cultivation. This was the hurdle that Sea Forest was created to jump, using the IP held by CSIRO.
The company was founded by Stephen Turner as managing director, Sam Elsom as CEO and Dion Cohen as CFO. All had senior management experience; Stephen Turner in the minerals sector, Sam Elsom in the fashion industry and Dion Cohen in investment banking. Professor de Nys joined Sea Forest as its chief scientific officer, along with two more marine researchers, Dr Marie Magnusson and Dr Craig Sanderson.
All shared the same vision: to create a global business based on a marine technology that would help the world’s livestock industries eliminate their sizeable contribution to global warming. Ruminant diets only need to comprise 0.2% of the Asparagopsis supplement to reduce methane emissions by 98%.
Sam Elsom describes Sea Forest as a collaboration between scientists, business managers and marine farmers; people with very different backgrounds, but all required to make the venture a success: “So from the start, building a culture of respect and collaboration has been critical,” he says.
“While the scientists are amazing in the lab, we needed to build scale and system efficiencies to reach a certain cost of production. Making decisions using science is critical and using people with commercial experience is critical.”
Vital support
He describes how the Accelerating Commercialisation program played a pivotal and timely role: “We’d raised a certain amount of money through Stephen, Dion and I having backgrounds in establishing businesses. And we had a great scientific team backing that up, but we were still developing the proof of concept and were limited in our ability to attract further funding.
“The Accelerating Commercialisation grant allowed us to bridge the R&D and the proof of concept for cultivating Asparagopsis on a commercial scale.”
Dion Cohen says this was aided significantly by the relationship the company quickly developed with the i4 Connect team which manages the service.
“We had several conversations through 2019 and these provided very constructive guidance. In fact it was through those discussions that we were able to crystallise our thinking on how to organise the plant production facilities – the laboratory, hatchery tanks and marine farm – and also come up with detailed plans, milestones and costs.
“It was through the grant application process and working with i4 Connect that we really pulled all the numerous elements together. Cultivating Asparagopsis is complex … you’re starting with laboratory flasks, then small glass tanks, scaling up 1000 litre tanks and finally an 800 hectare marine farm.”
Credibility leverage
Stephen Turner says that the grant, when awarded, further built-up the business momentum: “Having the program’s support gave us a lot of credibility and it became a building block for the next level of capital raising.”
The company raised $5m in early 2020 and raised a further $34 million from investors at in April 2021. Sea Forests’ capital value today is put at $55 million with the first commercial supply of Asparagopsis scheduled to begin in early 2022.
In the meantime, interest in the company and its technology is growing internationally, especially in countries like the United States and The Netherlands that have large cattle populations and are under pressure to address the impact these are having on countries’ greenhouse gas emissions overall.
At this stage, Sea Forest’s Asparagopsis technology is their only hope, and likely to remain so. The waters around southern Australia and New Zealand are the only environments in which Asparagopsis can be cultivated in marine farms because of the water profile and because it would be prohibited in other parts of the world as a non endemic species. Cultivation in other countries is expected to only be possible using the land-based aquaculture Sea Forest is also developing.
Sam Elsom says this cost structure compared to the economics of a large-scale marine farm should put Australian livestock producers at a significant competitive advantage in their production and marketing of environmentally benign meat and dairy products into the future.
In the meantime, the first 1800 hectare marine farm at Triabunna, 90 kilometres north of Hobart, will be producing 7000 tonnes of the seaweed a year, enough to feed 100,000 head of cattle. The near-elimination of methane emissions from this number of animals equates to the removal of about 400,000 tonnes of CO2 equivalent from the atmosphere and the removal of 2800 tonnes of carbon from the ocean (through plant photosynthesis in the marine farm).
This is a ground-breaking scientific and business achievement. When the history of humanity’s eventual technological response to climate change is written, the flask sitting on dairy farmer Richard Gardner’s sideboard will represent a very significant chapter.
