May 28 (Reuters) - The U.S. Food and Drug Administration

has cleared Elanco Animal Health's ( ELAN ) methane-reducing

feed ingredient for lactating dairy cows, the company said on

Tuesday.

WHY IT'S IMPORTANT

One tablespoon of Bovaer per lactating dairy cow a day can

reduce methane emissions by about 30%, or about 1.2 metric tons

of carbon dioxide equivalent emissions annually, the company

said.

CONTEXT

Bovaer works by suppressing the enzyme in a cow's rumen,

part of its stomach, that forms methane.

Methane is 28 times more potent in trapping heat in the

atmosphere compared to carbon dioxide, though it lasts only a

decade in the atmosphere before breaking down compared to carbon

dioxide that lasts for centuries.

KEY QUOTES

The feed ingredient would help dairy food companies to buy

carbon credits from their own farms and create a value stream of

$20 a cow, Elanco CEO Jeffrey Simmons told Reuters.

This will allow farmers to quantify their emissions

reduction efforts and certify carbon credits for sale, creating

a carbon inset market.

Carbon insetting allows companies to reduce their emissions

and carbon footprint within their supply chain or industry.

BY THE NUMBERS

Feeding one million cows Bovaer would reduce emissions

equivalent to removing more than 285,000 cars from the road for

a year, Elanco estimated.

(Reporting by Sriparna Roy in Bengaluru; Editing by Krishna

Chandra Eluri and Shinjini Ganguli)