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Can Synthetic Palm Oil Help Save the World’s Tropical Forests?

This story originally appeared on Yale Environment 360 and is part of the Climate Desk collaboration.Tom Jeffries and Tom Kelleher met at Rutgers University in the 1970s while studying industrially useful microbes. Jeffries went on to run a yeast genomics program at the US Department of Agriculture; Kelleher spent decades in the biomedical industry, working with biologics like insulin, which are produced by genetically modified microbes in giant fermenting vats. In 2007, the two reunited to build a company on the back of a grant from the National Science Foundation. Called Xylome, the Wisconsin-based startup aimed to find better methods to produce low-carbon fuel by feeding agricultural waste to yeast.Yet it was by accident that Jeffries and Kelleher turned their efforts a few years later to a different global environmental problem: palm oil.

The world’s cheapest and most widely used vegetable oil, palm oil production is a primary driver of deforestation and biodiversity loss in the tropics. These and other problems with the palm oil industry, such as exploitative labor practices, have for years driven interest in more sustainable options. But good alternatives have proven difficult to come by. Other vegetable oils have similar drawbacks to palm oil, and sustainable forestry practices are not always effective in the face of rising demand. Today, the world consumes nearly 70 million metric tons of palm oil each year, used in everything from toothpaste and oat milk to biodiesel and laundry detergent. Demand is expected to more than double by 2050.

But with advances in bioengineering and increasing concerns about sustainability, a number of companies like Xylome have developed microbial oils they say could offer an alternative to palm oil while avoiding its most destructive impacts. They join numerous other synthetic biology companies—from ventures hawking new biofuels and fertilizer to lab-grown meat—that aspire to solve environmental problems but share similar challenges scaling up production and demonstrating that their approach is in fact more sustainable than the products they’re trying to replace.Last year, a startup called C16 Biosciences opened a gleaming new lab in Manhattan to develop a microbial palm oil alternative, backed by $20 million from Bill Gates’ climate solutions investment fund Breakthrough Energy Ventures. A California-based startup called Kiverdi is also working to manufacture yeast oil using carbon captured from the atmosphere, and a team of bioengineers at the University of Bath is at work scaling up its own strain of oily yeast. Xylome recently sent the first batches of its palm oil alternative—called “Yoil”—to a number of large palm oil suppliers and the FDA for testing.Though enormous challenges exist to scaling up production at a cost that can compete with cultivated palm oil, and questions remain about how an emergent biotech industry in the Global North might impact palm-oil-based livelihoods in the Global South, these microbial oils could help curb the relentless growth of oil palm, which threatens biodiverse areas along frontiers in South and Southeast Asia, Africa, and Central America. If yeast oils can achieve a price low enough to compete with the trees (a big if) “that would make a huge difference in where palm oil comes from,” said Kelleher, now Xylome’s CEO. “It would all be microbial at that point.”