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Palm oil is cheap, plentiful, and extremely useful — but its production involves destroying tropical rainforests. Startups are racing to replace palm oil with oil from yeast cultures. Can they beat palm oil's low price?
An aerial photo shows the emergency call "SOS" that has been planted with trees on a palm-oil plantation in Indonesia
Palm oil is incredibly useful stuff. It's by far the most commonly used vegetable oil in the world because it has several advantages: First, it's the cheapest. Some 73 million metric tons of raw palm oil were sold at an average wholesale price of $575 per ton in 2019.
The next cheapest vegetable oils are soy, sunflower, and rapeseed oils. Prices fluctuate, but they're usually between 15% to 50% more expensive than palm oil and sometimes nearly double in price.
Second, "the complex fatty-acids composition of palm oil makes it extremely versatile," according to Sophie Parsons of the University of Bath, who is part in a group researching the potential for oil from yeast cultures to replace palm oil.
About half of the oil palm fruit's "mesocarp," or fruit flesh, is made of saturated fatty acids that are solid at room temperature, ideal for use in snacks such as cakes and candy bars, in pizza dough, margarine, ice cream, and other products, including nonfood items like cosmetics. The other half of the palm oil fruit's fatty acids are liquid at room temperature. Liquid palm oil is widely used as cooking oil in Asian countries.
Unfortunately, since oil palms can only grow in the wet tropics, the rapid expansion of oil palm plantations has resulted in the loss of some of the most ancient, beautiful, and wildlife-rich forests in the world.
About 85% of the world's palm oil is produced in Indonesia and Malaysia. The island of Borneo, divided between Indonesia, Malaysia, and Brunei, is a biodiversity hot spot that features pygmy elephants, clouded leopards, birds-of-paradise, orangutans, and hundreds of other rare wildlife species. The island is also home to 8.4 million hectares (20.7 million acres) of palm oil plantations — about 45% of the global total.
According to the International Union for the Conservation of Nature (IUCN), "palm oil production increased 15-fold between 1980 and 2014," a further doubling or tripling of demand by mid-century is likely, and "oil palm expansion could affect 54% of threatened mammals and 64% of threatened birds globally."
Palm oil is cheaper primarily because it uses less land per ton of oil produced. While a hectare of rapeseed can yield about one ton of oil, a hectare of oil palms yields 4 or 5 tons. "Because other oil crops have lower yields [per hectare] than oil palm, replacing it is not a solution. To reduce its impacts on biodiversity, palm oil needs to be produced more sustainably by avoiding deforestation and cutting non-food palm oil use," IUCN said in a recent report.
But research biologist Thomas Brück told DW that there's an alternative solution available. The head of the synthetic biology research group at Technical University of Munich (TUM) and his fellow researcher, Mahmoud Masri, produce yeast oil by growing oil-rich natural strains of yeast in fermenting vats, and then harvesting the oil in a low-impact, environmentally friendly process.
TUM researcher Mahmoud Masri holds bottles with liquid (left) and solid (right) fats produced from yeast oil cultures using the fermentation vat on the left. Oil from different strains of yeast can replace palm oil's liquid and solid fractions
"Yeast cells can eat almost anything organic, from wood waste or straw to restaurant food waste, and even processed sea kelp, so the ecological cost of the feedstock can be kept very low," Masri explains. The challenge now, he says, is to develop the equipment and processes to increase yeast-culture batch size to industrial scale.
Sophie Parsons also says various strains of oil-rich yeast cultures can replace each of the components of palm oil with very similar oils. This has been shown in numerous laboratory experiments, she notes, but the technology is not yet available at a commercial scale.
She thinks it's unlikely that it will ever be feasible to achieve yeast-oil production volumes as large as palm oil, meaning on the order of 70 million tons a year. Moreover, she told DW that "it won't happen without policy support" in the form of European Union regulations or public investments fostering alternatives to palm oil.
Thomas Brück (left) and Mahmoud Masri have launched a new company called Global Sustainability Transformation (GST) in hopes of achieving a commercial breakthrough of the yeast-oil technology
Parsons and Brück both say it would be a big help if the European Union would increase public spending on bioreactor development. Brück estimates that "about €200 million" ($236 million) would suffice to move technology for growing oil-rich yeast cultures to an industrial scale.
"Our lab at TUM is the knowledge provider… We're working with a brewery and other industrial companies who already know how to maintain industrial-scale yeast cultures," he says, suggesting several ways of how the investment should be financed.
A modest surcharge could be levied on every ton of palm oil imported into Europe, for example, with the money spent on funding yeast-oil research. Or the EU could require European companies to source a few percent of their vegetable-oil supply from microbial bioreactors by some particular year, e.g. 2024. That would attract private investment into scaling up these technologies.
In any case, the race to commercialization has begun. The TUM group has formed a new company called Global Sustainability Transformation (GST), headed by Mahmoud Masri. And in March of this year, Breakthrough Energy Partners (BEP), a clean-tech venture capital fund co-founded by Microsoft founder Bill Gates, invested $20 million (€16.9 million) in a New York-based startup, C16 Biosciences, whose goal is to produce yeast oil in commercial bioreactors.