Terra Oleo: A Sustainable Alternative to Palm Oil
In a world increasingly aware of environmental issues, the palm oil industry faces scrutiny for its role in deforestation and habitat destruction. Amid this backdrop, a new startup, Terra Oleo, is emerging as a potential game-changer. Founded by Shen Ming Lee and Boon Uranukul, the company aims to revolutionize the production of oils traditionally derived from palm oil by utilizing agricultural waste and innovative microbial technology.
The Palm Oil Dilemma
Palm oil has become a ubiquitous ingredient in various products, from food and cosmetics to biofuels. According to the U.S. Department of Agriculture (USDA), global production reached nearly 79 million metric tons last season. However, this growth has come at a significant environmental cost, particularly in Southeast Asia, where vast areas of rainforest have been cleared for palm plantations. This deforestation not only threatens biodiversity but also contributes to climate change.
Shen Ming Lee, who grew up in a family deeply entrenched in the palm oil industry, has a unique perspective on this issue. “I grew up in the conventional palm oil industry,” she told TechCrunch. “I have to admit, I was a bit ashamed of what my family does.” This personal conflict spurred her to seek a more sustainable path, leading to the inception of Terra Oleo in 2022.
The Birth of Terra Oleo
The idea for Terra Oleo took shape when Lee met Boon Uranukul, a doctoral candidate at MIT. Uranukul had developed microbes capable of producing essential building blocks for plastics from agricultural waste. This intersection of expertise and shared values laid the groundwork for a startup focused on sustainability.
“We wanted to build something that aligned with my values as a Gen Z individual focused on sustainability,” Lee explained. The duo began exploring how they could leverage their skills and networks to create a viable alternative to palm oil.
Operating in stealth mode for nearly two years, Terra Oleo has been developing microbes that can convert agricultural waste into various oils. The startup has successfully raised $3.1 million from investors, including ADB Ventures and Better Bite Ventures, and is part of the Breakthrough Energy Fellows cohort for 2023.
Rethinking Oil Production
One of the key challenges in the palm oil industry is the perception that crude palm oil is the ultimate product. Lee emphasizes that this is a misconception. “Crude palm oil is a very low-margin commodity,” she stated. Instead of competing in this saturated market, Terra Oleo aims to produce higher-value products, such as cocoa butter and specialty oils used in cosmetics and pharmaceuticals.
To achieve this, the company has selected three yeast species known for their ability to produce specific oils when fed organic waste. By employing genetic and metabolic engineering techniques, they have enhanced these microbes’ capabilities to generate fats and triglycerides more efficiently.
Currently, Terra Oleo is in the lab phase, producing oils in small quantities. However, with the recent funding, the company plans to scale up production to kilograms, significantly increasing its output.
Economic Viability and Market Potential
One of the most compelling aspects of Terra Oleo’s approach is its economic viability. The startup claims it can produce oils for the cosmetic and pharmaceutical industries at costs significantly lower than traditional methods. “We’re looking at upwards of 80% margins for some of these specialty oleochemicals because they’re really expensive to produce conventionally,” Lee noted.
This cost advantage stems from the microbes’ ability to produce the desired chemicals directly, eliminating the need for expensive refining processes. As the demand for sustainable products grows, Terra Oleo’s model could attract attention from industries seeking to reduce their environmental footprint.
Challenges Ahead
Despite the promising outlook, Terra Oleo faces significant challenges in scaling its operations. The palm oil market is well-established, and transitioning to alternative sources will not happen overnight. Lee acknowledges this reality, stating, “We’re not going to change from palm oil to other sources overnight. It’s so prevalent and versatile that it will be a slow transition.”
The company aims to work collaboratively with existing palm oil producers to create a diversified production mix that includes sustainable alternatives. This approach could pave the way for a more responsible palm oil industry while offering consumers eco-friendly options.
Conclusion
Terra Oleo represents a beacon of hope in the quest for sustainable alternatives to palm oil. By harnessing the power of microbial technology and agricultural waste, the startup is poised to disrupt a market long dominated by environmentally harmful practices. As the world grapples with climate change and biodiversity loss, innovations like those from Terra Oleo could play a crucial role in shaping a more sustainable future. With continued support and investment, the company may not only honor Lee’s family legacy but also redefine it in a way that aligns with the values of a new generation.
