Sustainable alternative to palm oil developed through fermentation

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

UK start-up Sun Bear Biofuture, so named after an East Asian bear whose habitat is being destroyed by deforestation, aims to provide a more sustainable alternative. Using fermentation to develop it and agricultural side streams as a feedstock, the company aims to provide an oil with similar functional properties but none of the deforestation links. 

How is Sun Bear Biofuture’s product made?​“We’re using fermentation to produce a more sustainable alternative to palm oil,” Ben Williams, Sun Bear Biofuture’s CTO, told FoodNavigator.

“What that means is we work with a strain of yeast that naturally produces an oil that’s very similar in composition and functional properties to palm oil. We then optimise the strain to produce as much oil as possible, and then optimise our fermentation process around it. [With] our purification process, we try to make that as efficient and cost effective as possible and produce as much oil as we possibly can off the back of that.”

Palm oil comes in two forms: crude palm oil (which is pressed from fruits) and refined palm oil (which is used as an ingredient). Sun Bear Biofuture’s Williams told us it’s aiming to replicate the latter.

Williams (centre) with colleagues and fermenters. Image Source: Sun Bear Biofuture“That oil is pretty unique in its functional properties because it’s about 50% saturated, and so it actually acts much more like butter than it does like other vegetable oils. This means it’s very hard to replace.

“What we’re producing is something at lab scale which is 50% saturated. The challenge for us is then scaling this up.”

What are the challenges involved in upscaling?​Like many other products derived from fermentation, Sun Bear Biofuture’s alternative to palm oil requires very specific equipment, which is often derived from the pharmaceutical industry. While it is currently difficult to access equipment that can produce at high volumes, the company is working hard to upscale.

Cost is a challenge. Because the tech is sourced from outside the food industry, “you’re working with technology that isn’t designed for this kind of level of like commodity scaling.”

Finding the right feedstocks can also be an issue. Sun Bear Biofuture uses agricultural side streams, considered more sustainable than new feedstocks. “Our yeast has to produce oil from something. We’re working with side stream-derived feedstocks, things like potato peels and bread waste, which are cheaper than using sugar and are also more sustainable.”

The company is currently working with, and and receiving research funding from, AberInnovation, a research facility based in Aberystwyth University, Wales, to test out the fermentation process using larger scale fermenters. The goal is to upscale even further, with even larger fermenters.

What’s the difference between sustainable palm oil and Sun Bear Biofuture’s product?​Some organisations, such as the RSPO​, provide certifications to ensure that palm oil is sustainably produced. Williams, however, believes that there will not be enough of such palm oil to catch up with market growth. 

The palm oil sector is projected to grow significantly in the next few years, with a compound annual growth rate (CAGR) of 4.9% between 2023 and 2030, according to Vantage Market Research. The market growth means that more space will be needed to produce palm oil, which risks leading to more deforestation.

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

There is not, according to Williams, enough sustainably produced palm oil to fuel this level of growth. Instead, palm oil substitutes such as Sun Bear Biofuture’s can soak up some of the demand. “We want to capture some of that growth and make sure it doesn’t go towards deforestation,” he told us.  

What are its opportunities for commercialisation? ​The European Deforestation Regulation (EUDR) is due to be applicable by the end of 2024. One of the key commodities it regulates is palm oil. With their complex supply chains coming under scrutiny, palm oil producers will be keen to avoid the penetrating gaze of European regulators.

“The palm oil supply chain is quite a messy supply chain,” Williams told us. “It’s very difficult to trace back where your palm oil came from, which smallholder, whether it’s deforestation or not that resulted in it. This is a big headache for a lot of suppliers who are now coming under regulatory constraints in Europe and the UK.”

What commodities are impacted by the EUDR?The EUDR will affect commodities, including palm oil, that are linked to deforestation. The other commodities include soy, beef, wood, cocoa, coffee and rubber.

With Sun Bear Biofuture’s product, these traceability constrains, according to Williams, are no longer an issue. The product “can be locally sourced. You could produce everything: you could produce your feedstock, your fermentation, everything in the UK, which obviously you can’t do with palm oil”.

Companies ‘don’t know how stringent the EU is going to be’, Williams suggested. They could lose up to 4% of their revenue if full penalties are imposed. A palm oil alternative like Sun Bear Biofuture’s does not have these risks. “There’s definitely a big opportunity there for helping those companies mitigate those risks.”

The start-up aims to work with companies looking for a sustainable alternative to oils and fats, particularly plant-based meat companies whose sustainability credentials could be harmed by the presence of palm oil in their product.