IAA 327 – Scaling up the yeast based palm oil substitute

Palm oil is the largest produced edible oil in the world, with over 60m tonnes produced. Palm grows in the tropics in direct competition with tropical rainforest, as such the unchecked growth in this sector has led to severe deforestation in South East Asia, causing local smog pollution, significant global carbon emissions and a huge reduction in biodiversity. While efforts are underway in the EU to restrict palm oil imports, it is ubiquitous to many products and is used heavily in food, surfactants and biofuel sectors. In 2016 we were awarded an IB catalyst early stage research grant, the Mp2 project, to develop a palm oil substitute using the yeast M. pulcherrima. This was in collaboration with the University of York, Croda and AB Agri. In this grant we have developed a process that can take any waste lignocellulose residue and convert it into a yeast oil indistinguishable from palm oil. This has led to large media coverage, with our work appearing in the Guardian 3 times, multiple other UK and international print, media and radio outlets and resulting in a NowTV video that went viral on facebook and has been viewed 1,000,000 times. With this exposure we have been inundated with interest from industry and currently have 30 interested industry end users including PepsiCo, Louis Dreyfus Commodities and GoogleX. Recently two private equity firms, as well as Accenture have joined the consortia and are working with us pro bono to help develop an effective commercial product from this work.

This IAA funding is vital to build the credibility to raise funding for a further commercial entity. The economic modelling that we have completed to date is based on a 10,000 tonne lipid plant, processing 100,000’s tonnes of lignocellulosic material each year. The CAPEX on this scale we estimate to be approximately £80-120m. This is the scale that bioethanol plants work on, and will be necessary to produce a product to make a real impact on deforestation. To get to the stage however, where a financing consortia could be brought together, several stages of initial development must be in place. In stage 1, our plan is to raise between £1-2m from private equity sources, matching with government funding from Innovate UK or DfT funding streams.

This will allow the further scale up to the demonstration scale at the CPI (10m3), or with our other industrial partners (AB Agri, Croda). On successful completion and development of a robust platform, in stage 2, we will aim to raise £5m for a small-scale production facility producing 100 tonnes of lipid a year. Our technoeconomic modelling demonstrates this would need a 25m3 working volume fermenter, be able to run on waste sugar sources rather than lignocellulose and would produce a lipid for approximately £11 kg-1. In this facility we will also produce 2PE and an animal feed to reduce the cost of the lipid product, and have dedicated end users, interested in aiding the future development of the products, rather than selling on the open market.

This route to commercialisation has been developed within the consortia, with a strong endorsement from the private equity firms. There is agreement that this is the most suitable route to commercialisation for this type of technology. However, we cannot access the first stage of funds (£1-2m of private investment) without a de-risked process that demonstrates stage 1 has a good chance of success. This is therefore the focus of the IAA funding proposal.