Over Zoom, Kelleher showed off a bluish photo of Xylome’s proprietary yeast strain, developed from an oil-producing species called Lipomyces starkeyi. Through the microscope, the yeast resembled dish soap suds. “You’re looking at yeast which are literally squashed,” he said. “They’re crushed to the outside wall because of the amount of oil produced in these yeasts.” Fed on corn syrup, the genetically altered strain is capable of giving over the majority of its total weight to lipids. “They do exactly what we do if we keep feeding ourselves sugar,” said Kelleher. “They get big.”
In 2013, Jeffries, now Xylome’s president, noticed the oil from this strain was remarkably similar to palm oil, which is prized for its distinctive blend of saturated and unsaturated fats. This blend is solid at room temperature and liquid at body temperature—perfect for chocolate coatings, soaps, and cosmetics. Other parts of the versatile palm oil are used as fuels, solvents, lubricants, and in many other products, especially in China, India, and Indonesia.
The resemblance of the yeast oil to palm oil was discovered by chance—Xylome was going for diesel. But Jeffries and Kelleher realized there might be something to a palm oil alternative when Kelleher’s daughter told him about the growing interest in palm-oil-free cosmetics to address environmental concerns identified by years of international activism targeting unsustainable palm oil.
Though palm oil production is responsible for less than 1 percent of deforestation globally, according a 2018 report from the International Union for Conservation of Nature, it is a major cause of deforestation in the tropics. In Borneo, for instance, oil palm cultivation has accounted for more than half of all deforestation over the past two decades. Future demand could contribute to even more deforestation. The same report found that more than 1 million square miles of biodiversity hot spots could be threatened by oil palm cultivation, potentially affecting more than 40 percent of all threatened bird, mammal, and amphibian species, from orangutans and tigers to flycatchers and elephants. This deforestation also creates greenhouse gas emissions, as carbon-rich peat built up beneath virgin forests is drained, and trees are burned to clear land for planting.
Recognizing these impacts, suppliers—working through organizations like the Roundtable on Sustainable Palm Oil (RSPO), which has certified palm oil supply chains since 2007—have sought ways to increase oversight of palm oil production to ensure crops are not cultivated on biodiverse or carbon-rich land. While a growing number of palm growers are certified, the approach has limitations, said Janice Lee, an environmental scientist who studies palm oil at Nanyang Technological University in Singapore. For instance, it can be difficult to certify smallholder growers, who collectively represent the majority of palm oil production in some regions. “Certification is not a silver bullet,” she said. About 20 percent of palm oil production is certified by the RSPO.
Finding an alternative to palm oil has proven even more challenging. Other tropical oils—like coconut oil—have lower yields than oil palm and would have even greater impacts if cultivated on the same scale. Other non-tropical oils—like soy or corn oil—can be grown outside the biodiverse tropics, but they require additional processing to replace palm oil in many applications. That processing is expensive, and it produces trans fats, which the FDA banned in the United States in 2015.
Kelleher and Jeffries decided to market their yeast as a better alternative. The microbes in their lab produce an oil with a lipid profile almost identical to palm oil. The “bugs,” as they refer to the yeast, can also be fed with materials that don’t require tropical agriculture, such as corn or sugar cane, or waste materials, like corn husks and wheat stalks, which could substantially reduce production costs. The microbial oils could also be produced anywhere, reducing the distance between factory and consumer.
