UK – With palm oil’s links to deforestation under increasing scrutiny, a new start-up, Sun Bear Biofuture, is developing an alternative through fermentation using side streams as feedstock.

Palm oil is a commodity strongly linked to deforestation. According to the United Nations (UN), oil palm harvesting accounted for 7% of deforestation between 2000 and 2018.

In response, UK start-up Sun Bear Biofuture aims to provide a more sustainable alternative using fermentation and agricultural side streams as feedstock.

Named after an East Asian bear whose habitat is being destroyed by deforestation, the company seeks to produce oil with similar functional properties to palm oil but without the environmental impact.

“We work with a strain of yeast that naturally produces an oil similar in composition and functional properties to palm oil. We then optimize the strain to produce as much oil as possible and refine our fermentation and purification processes to be as efficient and cost-effective as possible,” says Ben Williams, Sun Bear Biofuture’s CTO.

Sun Bear Biofuture aims to replicate refined palm oil, which is about 50% saturated, making it act more like butter than other vegetable oils and thus very hard to replace.

Scaling up involves specific equipment often derived from the pharmaceutical industry, which can be difficult to access for high-volume production.

 Despite these challenges, Sun Bear Biofuture is working to upscale with the support of AberInnovation, a research facility based at Aberystwyth University in Wales.

While organizations like the RSPO (Roundtable on Sustainable Palm Oil) provide certifications to ensure sustainably produced palm oil, Williams believes there will need to be more sustainable palm oil to meet market growth.

Growth and regulation

According to Vantage Market Research, the palm oil sector is projected to grow significantly, with a compound annual growth rate (CAGR) of 4.9% between 2023 and 2030. This growth could lead to further deforestation.

“If you’re going to see that growth, there’s nowhere else to put it other than where the tropical rainforests currently are,” Williams said.

He emphasized that there is not enough sustainably produced palm oil to support this level of growth, highlighting the potential of palm oil substitutes like Sun Bear Biofuture’s to mitigate deforestation.

The European Deforestation Regulation (EUDR), due to be applicable by the end of 2024, is set to regulate palm oil among other key commodities.

This regulation will increase scrutiny on the complex palm oil supply chain, which is often difficult to trace back to its origins. “The palm oil supply chain is quite messy. It’s very difficult to trace where your palm oil came from, which smallholder produced it, and whether deforestation was involved,” Williams explained.

Sun Bear Biofuture’s product, by contrast, can be locally sourced, with all stages of production taking place in the UK.

This local production eliminates the traceability issues associated with palm oil. Companies facing regulatory constraints in Europe and the UK could find a safer option in Sun Bear Biofuture’s product, potentially avoiding revenue losses from regulatory penalties.

The start-up aims to collaborate with companies seeking sustainable alternatives to oils and fats, particularly plant-based meat companies whose sustainability credentials could be compromised by the presence of palm oil in their products.

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