Terra Oleo’s oil-producing microbes could replace destructive palm oil plantations

In a departure from traditional paths, Shen Ming Lee chose entrepreneurship over rebellion, driven by a desire to create change within the palm oil industry. "I grew up in the conventional palm oil sector, and I must admit, I felt a bit ashamed of my family's business," Lee shared with TechCrunch. Palm oil has become a staple in the vegetable oil market, finding its way into countless products ranging from snacks to cosmetics, yet its production has led to significant deforestation across tropical regions, particularly in Southeast Asia. The spark for Lee's startup, Terra Oleo, ignited in 2022 when she crossed paths with co-founder Boon Uranukul, an MIT doctoral candidate who had engineered microbes capable of converting agricultural waste into essential building blocks for plastics. "I wanted to create something that aligns with my values as a Gen Z advocate for sustainability while honoring my family's legacy," Lee explained. The duo began exploring innovative pathways that combined their expertise with strategic connections. Operating in stealth mode for nearly two years, the Singapore-based Terra Oleo has focused on developing microbes that can convert agricultural waste into a range of oils. The startup has successfully secured $3.1 million in funding from investors such as ADB Ventures and Better Bite Ventures, as well as a corporate investor within the palm oil sector. Lee and Uranukul are also participants in this year's Breakthrough Energy Fellows cohort. To identify their starting point, the founders analyzed the various derivatives of palm oil, asking, "What are the most valuable products, and what can we tackle technologically?" Lee noted that while crude palm oil is often viewed as indispensable, it is, in fact, a low-margin commodity. Instead, they opted to target higher-value products like cocoa butter and specialty oils for use in cosmetics and pharmaceuticals. The team selected three yeast species known for their capacity to generate specific oils when fed organic waste, including byproducts from agriculture and biodiesel production. Utilizing genetic and metabolic engineering techniques, they enhanced these microbes to produce desired fats and triglycerides. Currently, Terra Oleo is still in the laboratory phase, generating small quantities of oil, but Lee indicated that the funding will help scale production to kilograms. Impressively, Terra Oleo can manufacture oils for the cosmetics and pharmaceutical sectors at costs significantly lower than market rates, primarily due to their microbes producing the necessary chemicals right from the outset, bypassing expensive refining processes. "We anticipate margins of over 80% for some specialty oleochemicals, as conventional production methods are costly," Lee stated. However, replacing substantial amounts of palm oil will not be a straightforward task. The USDA reported that global production reached nearly 79 million metric tons last season, with little growth observed in recent years. For Lee, this presents a crucial opportunity to demonstrate to current palm oil producers that a more sustainable approach is possible. "Transitioning from palm oil to alternative sources won't happen overnight; it's a widely used and versatile ingredient. We envision a gradual shift, collaborating with the industry to achieve a diversified production mix," she concluded.