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Humans lack the enzyme necessary to digest cellulose. Hay and grasses are particularly abundant in cellulose, and both are indigestible by humans (although humans can digest starch). Animals such as termites and herbivores such as cows, koalas, and horses all digest cellulose, but even these animals do not themselves have an enzyme that digests this material. Instead, these animals harbor microbes that can digest cellulose.

 

Animals such as cows have anaerobic bacteria in their digestive tracts which digest cellulose. Cows are ruminants, or animals that chew their cud. Ruminants have several stomachs that break down plant materials with the help of enzymes and bacteria. The partially digested material is then regurgitated into the mouth, which is then chewed to break the material down even further. The bacterial digestion of cellulose by bacteria in the stomachs of ruminants is anaerobic, meaning that the process does not use oxygen. One of the by-products of anaerobic metabolism is methane, a notoriously foul-smelling gas. Ruminants give off large amounts of methane daily. In fact, many environmentalists are concerned about the production of methane by cows, because methane may contribute to the destruction of ozone in Earth's stratosphere10

 

Reference:

http://science.jrank.org/pages/1335/Cellulose-Cellulose-digestion.html