Reducing it is a priority as the Government prepares to ratify the Kyoto climate-change agreement.
Fonterra research and development manager Dr Chris Mallett said Fonterra made submissions urging the Government not to disadvantage New Zealand farmers by ratifying Kyoto before other countries.
But he said: "If the Government decides to endorse Kyoto, we are not going to break the law. And if that is the case, we need to conduct some research to see whether we can mitigate greenhouse gas emissions."
He said Australian researchers had made an unsuccessful attempt to produce bacteria that reduced the methane emitted by animals which "chew the cud", or return partly digested food from their first stomachs to their mouths for further chewing.
AgResearch scientists in Palmerston North are working on using microbes bred in France to absorb the hydrogen that bacteria produce when they break down grass, without producing methane.
AgResearch's group manager of science and technology, Dr Tricia Harris, said the consortium would accelerate that research to try to find a solution before the Kyoto agreement comes into force in 2008.
"What we are looking to do is to accelerate it so that we have a mitigation product - a long-term controlled release or vaccine - in six years," she said.
"It's a challenge to get it through in that time. [But] we are confident that we have got ways to actually bring products forward if the investment is coming in."
Meat NZ research and development manager Dr Neil Clarke said the consortium had not yet finalised how much each part of the pastoral sector would invest, but a precedent had been set with a much smaller research consortium on the clover root weevil which was also supported by all main pastoral players.
Wrightson's general manager of solutions, Michael Ahie, said the company already spent up to $6 million a year researching new animal feeds, and was testing the effects of its new varieties of rye grass, Quartet and Aries HD, on methane production by the animals that eat them.
"The consortium is a good idea because it does spread the load. We do need to solve this problem," he said.
But the chief executive of the Wool Board's on-farm subsidiary WoolPro, Richard Gardner, cautioned that the consortium was "not a done deal yet".
"There are still discussions going on about what the consortium should do and the levels of funding it should provide, given that it's going to try and leverage some money out of the foundation," he said.
He wanted to see "some real rigour" in the analysis of the Kyoto policy before committing farmers' funds to a research programme that might take 10 years to achieve anything.
All members of the consortium are due to meet foundation officials on Friday to sort out the ground rules for the proposal.
The development manager of Fonterra's NZMP subsidiary, Dr David Johns, said the consortium would go ahead "one way or another" whether the Wool Board joined it or not.
The technical director of the Fertiliser Manufacturers' Research Association, Dr Hilton Furness, said his group was also "very likely to be part of it" because the methane research was likely to lead to work on reducing emissions of nitrous oxide.
He said methane was about 30 times as potent as carbon dioxide in its contribution to the "greenhouse effect", and nitrous oxide was about 10 times as potent as methane.
Nitrogenous fertilisers account directly for between 8 per cent and 10 per cent of nitrous oxide emissions from the soil, and are implicated indirectly in the other main sources of nitrous oxide - animal urine and dung.
Research plans food for thought
The six research consortium proposals to be considered by the Foundation for Research, Science and Technology's investment committee next week are:
Bioactives: Fonterra, Auckland University, Otago University - "natural medicines" from milk to strengthen people's bones and immune systems.
Meat-based functional foods: Meat NZ, AgResearch, undisclosed industry investors - meat-based products for specific purposes, such as helping the body to absorb iron.
White clover genetics: ViaLactia (100 per cent Fonterra subsidiary), Meat NZ, AgResearch - genetic structure of white clover.
Methane reduction: Fonterra, Wrightson (19.9 per cent owned by Fonterra), Meat NZ, Wool Board, Game Industry Board, AgResearch, Fertiliser Manufacturers' Research Association - reducing methane emissions from belching livestock.
Advanced composite materials: Auckland University, Forest Research, industry investors yet to be settled - new materials using wood, flax, sisal (a plant fibre) and synthetic fibres for boats, aircraft and so on.
Wood quality: Forest Research, Industrial Research, Canterbury University, industry investors yet to be settled but likely to include Carter Holt Harvey and Fletcher Challenge Forests - techniques for testing wood quality in standing forests and logs so that it is used most efficiently.
nzherald.co.nz/climate
Intergovernmental Panel on Climate Change (IPCC)
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
Executive summary: Climate change impacts on NZ
IPCC Summary: Climate Change 2001
