(Bloomberg) -- Elanco Animal Health Inc.’s Bovaer feed supplement, which reduces methane emissions in dairy cattle by an average of 30%, was determined to have met the US Food and Drug Administration’s safety and efficacy requirements.

Bovaer is added to cattle feed and works by suppressing a digestive enzyme that generates methane, according to the Greenfield, Indiana-based company. The FDA’s greenlight is the first for a product of its kind, and the company expects it to generate more than $200 million of revenue in the US market.

“There’s a perception that, ‘Oh, cows are bad for the environment.’ That’s not the case,” Chief Executive Officer Jeff Simmons said in an interview. “What comes with this announcement is that the dairy industry in the US can have a significant impact, positively, on the environment in the short term, in the next five years, by reducing methane.”

Read More: Companies Aren’t Using Quick Fix to Reduce Methane Emissions

The company already has products ready and plans to launch in the third quarter, Simmons said. Farmers using Bovaer can also earn carbon credits for their emission reductions and sell those credits to consumer-packaged goods companies and food retailers, he said.

The FDA said in a letter that it “has no questions at this time” about whether Bovaer “will achieve its intended effect and is expected to pose low risk” to humans or animals.

Bovaer, which is already being sold in more than 50 countries, can lead to even greater emission reductions in beef cattle, averaging a 45% cut. Elanco will also seek FDA clearance for use in US beef herds in the future, Simmons said. Elanco partnered with Netherlands-based DSM-Firmenich AG in 2022 to secure exclusive licensing rights to develop, manufacture and commercialize Bovaer in the US.

Elanco will now also have the right to market Bovaer in Canada and Mexico, the company said Tuesday. 

(Company corrects nature of FDA action in headline and text of story published Tuesday.)

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