A yeast oil developed by a Dutch biotech firm may transform the food and personal care industries by slashing the carbon footprint of conventional palm oil, which can be found in 60% of supermarket products.
Rubio Impact Ventures led a €5m investment round for Dutch biotech firm NoPalm Ingredients, with significant participation from Oost NL, Fairtree Elevant Ventures, family office Willow Capital Investments, The Netherlands Enterprise Agency (RVO) and other private investors.
Netherlands-based NoPalm Ingredients, which was founded in 2021, has developed a yeast-based fermentation technique that produces cost-competitive oils and fats from organic food waste such as potato peels.
NoPalm said it had proven the oil quality of its yeast-based product with pilot partners including consumer products giants Colgate-Palmolive and Unilever. It said its production process was able to achieve a 90% reduction in CO2 emissions and a 99% decrease in land use compared to traditional palm oil production.
Land use driven by palm oil production “threatens catastrophic loss of richly biodiverse equatorial rainforests and is responsible for more emissions every year than the entire airline industry”, said Tijl Hoefnagels, venture partner at Rubio Impact Ventures. “Companies like NoPalm Ingredients are critical to preventing further pressure on our strained planetary boundaries.”
Multi-billion dollar market
The global market for palm oil was valued at $70.44bn last year, according to a report by Grand View Research. It is forecast to grow 5.1% annually from this year until 2030, driven by increased demand from the food, beverage, biofuel, energy, personal care, and cosmetics industries.
With global demand for palm oil showing no sign of abating, there is “no strategy to meet the additional 22 million tonnes needed by 2030 without clearing rainforests 1.5 times the size of Ireland”, said Lars Langhout, chief executive officer and co-founder of NoPalm Ingredients.
With new regulations banning deforestation-related products, European companies will only be able to source sustainably certified palm oil, which excludes 83% of current supplies, according to Langhout.
“This will drive price increases that will affect every family in Europe,” Langhout said. “Often, the answer isn’t to prohibit a product but to step back and create a superior alternative that naturally compels a switch.”
Upcycling
NoPalm said the funding round, which is now closed, was “pivotal” to “demonstrate large-scale production and solidify our role as a trusted partner in the food and personal care industries”. Langhout said the biotech firm is “on track” for industrialisation and commercialisation next year.
David Evans, managing director at European growth equity fund Fairtree Elevant Ventures, said NoPalm’s innovation “allows them to upcycle industrial food waste streams which recovers carbon and creates value from waste, creating tremendous benefit”.
