#9 Deeptech Analysed - How Synthetic Biology is revolutionising Food Production & Going Green or going home: achieving Carbon Neutrality for a sustainable future
What is happening this week? 16th-22nd January 2023
Synthetic Biology in Food Production- Why the hype? What does the future hold?
By Suraj Nair, Deep Science & Technology Investments at Ankur Capital - External Contributor
Synthetic Biology in food production- Making food ingredients and products through precision fermentation.
What is going on?
What if I told you that we could produce the food we need in large fermenters with very less dependence on farmland? This might have been a distant reality a few years ago, but large-scale food production using precision fermentation systems is slowly becoming a possibility. The quest for sustainable alternatives has powered a revolution in the food industry in the past decade—one in which we are transforming into a more sustainable and environmentally friendly system of food production and consumption. Fermentation is an age-old technology and several products central to our cultures have been traditionally produced using this technology. Synthetic biology, however, is creating a paradigm shift by enabling the production of complex food products and ingredients, which can be safer, more nutritious, more delicious and more sustainable than currently available ones.
What does it mean?
Using advanced techniques in genetic engineering, systems biology and precision fermentation, synthetic biology is being used to study and modify the pathways or develop new microbial cell factories for two broad nutrient types: macronutrients such as carbohydrates, fats and proteins and micronutrients such as vitamins, dietary fibers and minerals. These ingredients or nutrients can then be used to produce complex products such as animal meat analogs, alternate dairy products, next generation sweeteners and flavors, functional foods such as carotenoids, vitamins and other oligosaccharides.
Why does it matter?
💸For markets: new business opportunities
Investments in synthetic biology-based food production companies have seeing an uptick in funding over the last few years. 2021 saw more than $900 million invested into start-ups developing synthetic biology-based food products, a rise of almost 3 times from 2020 and accounting for 60% of the total funding in this sector over the years. 2021 also was the first round of growth stage deals in this sector, signalling advancements in the product development and commercialization cycle in the industry. A large part of these investments have happened in the US, followed by Europe and the Asia Pacific region.
The investments in this sector have largely centered around companies using synthetic biology to produce alternate proteins. In the meat industry, Impossible Foods’ plant-based meat burger uses synthetic biology to produce heme, which gives the burger its beef-like flavour. The company raised $500M in 2021, bringing its total funding to $2 billion. Similarly, Motif FoodWorks has commercialized a yeast-based heme protein which can give the desired flavour and aroma to the plant-based meat products. The company raised its series B round of $226 million in 2021. Companies are also using synthetic biology to produce single cell proteins which can be used to develop alternate meat and sea food products. Calysta has raised more than $200 million to scale up its technology for converting natural gas into single cell proteins. Similarly, String Bio, a company based in India is also producing single cell protein from methane by using synthetic biology and has raised more than $20 million to commercialize its products.
In the dairy industry, Perfect Day has raised more than $700M to commercialize the milk proteins produced through engineered cell factories. Their Brave Robot-brand ice cream is available in supermarkets in the US. The egg industry has also seen synthetic biology based alternative products hit the market. The EVERY Company (formerly Clara Foods) launched its first animal free egg protein in November 2021 by partnering with Pressed Juicery. The alternate fats and oils industry has seen precision fermentation-based companies emerge over the last few years. C-16 Biosciences is expected to launch its palm oil food alternative in the next few years and has raised more than $20 million. Nourish Ingredients raised its series A round of $28.6 million in October 2022 to scale up and commercialize its animal-free fats products. Similarly, companies such as Cultivated Biosciences, Yali Bio and Melt&Marble are also using synthetic biology to produce alternate fat products.
🧑🏿🤝🧑🏻For society: meeting the growing demand for food
Out of the total calories available from crops grown worldwide, only 55% is directly consumed by humans, while the rest of it is either fed to livestock or converted to industrial products. Large scale agricultural crop production is in itself detrimental to the environment as it involves destruction of forests to convert them into arable land and heavy use of fossil fuel-based agricultural inputs. Much of our food consumption is also indirect, which is inefficient: 100 calories of grain can only be converted into either 40 calories of milk, or 12 calories of chicken, or just 3 calories of beef. Notwithstanding the glaring energy conversion inefficiencies, the consumption of meat is expected to keep rising, especially in developing economies such as India and China. Meat consumption and income follow an inverted U-shaped relationship: consumption initially increases with income but eventually reaches a point at which it stagnates or declines. The rising population in these countries as well as the rising income levels, coupled with the calorie conversion inefficiencies, suggests crop production will have to double from current levels to feed the population over the next decade. Arable land, however, is limited. Synthetic biology offers feasible solutions, with applications beginning from improving the efficiency of meat production to more generally producing other foods in a lower-impact manner.
🔮 What’s next?
The decade gone by has opened up numerous opportunities for the use of synthetic biology in disrupting the food sector. Several companies in the sector are in advanced stages of product development and are on the cusp of scaling up and commercialization. Cultured meat and dairy products have already hit the market in some geographies. As more genomic information flows in and newer biochemical pathways are explored, new product lines are expected to emerge as well. However, there are a few challenges that need to be addressed for the products to become widely accepted by the consumers: high cost of the products, regulatory acceptance and scale up. These challenges can be addressed by participation from stakeholders such as regulating bodies, start-ups, corporates and investors alike.
Note: Read more about Ankur Capital and their work in deep science technologies here: Ankur Capital.
Going green or going home: achieving Carbon Neutrality for a sustainable future
By Eden Djanashvili, Deeptech Expert
What is going on?
Carbon neutrality refers to the goal of achieving net zero carbon emissions, typically through a combination of reducing greenhouse gas emissions and offsetting any remaining emissions through various methods such as carbon sequestration or purchasing carbon credits. There have been many recent developments and announcements related to carbon neutrality.
What does it mean?
In order to limit global warming and the impacts of climate change carbon neutrality is necessary. Greenhouse gases, particularly carbon dioxide, are emitted into the atmosphere as a result of human activities such as burning fossil fuels, deforestations and industrial processes. These emissions trap heat from the sun and cause the Earth’s temperature to rise. This warming is leading to a wide range of negative impacts such as sea level rise, more extreme weather events and changes in precipitation patternds, which can have devastating effects on human communities and the biodiversity world.
Why does it matter?
💸For markets: Pressure to achieve <2 degrees Celsius?
It becomes increasingly clear for businesses and governements to achieve carbon neutrality in order to meet the Paris Agreement and the United Nations Framework Convention on Climate Change (UNFCCC) goal of limiting global warming to well below 2 degrees Celsius above pre-industrial levels. There are different aspects to target:
(1) Increasing regulations: governments around the world are implementing regulations to reduce greenhouse gas emissions and achieve carbon neutrality and businesses will need to comply with these regulations in order to continue operating.
(2) Changing consumer preferences: consumers are becoming increasingly aware of the need to address climate change and are demanding products and services that are environmentally friendly. Businesses that can demonstrate their commitment to carbon neutrality will be better positioned to meet these changing consumer preferences.
(3) Reputation and brand value: businesses will likely be viewed more favorably by consumers, shareholders and other stakeholders which can help improve reputation and brand value.
(4) Cost savings: implementing carbon neutrality technologies (such as direct air capture, advanced nuclear reactor, hydrogen fuel cells,..) and practices can often result in cost savings such as reducing energy consumption and waste which improves profitability.
(5) Risk reduction: companies not able to reduce emissions or not taking serious actions to do so, may be exposed legally, reputationally, operationally and financially.
🧑🏿🤝🧑🏻For society: climate change as the origin for several challenges.
Climate change is already having severe impacts on communities around the world, including sea level rise, more extreme weather events and changes in precipitation patterns. These impacts can have devastating effects on human communities such as flooding, droughts and extreme weather events which can lead to food and water shortages, loss of livelihoods and displacement of people. Climate change also affects biodiversity, ecosystems and their services which can lead to loss of species and habitats, decline in ecosystem services such as pollination / pest control and, water regulation. Reaching carbon neutrality will help improve air and water quality, preserve biodiversity and create new jobs in clean energy and other industries.
🔮 What’s next? New business and investments opportunities ?
Carbon neutral or carbon products / services can open new business and investments opportunities. There are several key areas where developments in carbon neutrality are likely to occur in the near future including:
(1) Advances in renewable energy: including solar, wind, hydro and geothermal power are expected to continue to improve in terms of cost and efficiency making it increasingly feasible for them to replace fossil fuels as the primary sources of electricity.
(2) Energy efficiency: including technologies that reduce energy consumption such as LED lighthing and building insulation which reduces the energy required to heat or cool a building.
(3) Electric Vehicles: or EVs are powered by electricity from batteries rather than gasoline or diesel which can significantly decrease emissions from the transportation sector.
(4) Increasing regulations: governements around the world are expected to continue implementing regulations to reduce greenhouse emissions and achieve carbon neutrality. This is likely to include new policies such as carbon pricing, emissions standards and renewable energy mandates. New lobby’s will be generated.
(5) Increased corporate and individual actions: more companies, cities and individuals are expected to announce their commitment to achieve carbon neutrality and set targets to reach net-zero emissions. This will drive more actions to be taken in order to meet these targets.
(6) More investment in carbon offsetting: which is expected to play a key role in achieving carbon neutrality as it allows companies, individuals and governments to offset their emissions by supporting projects that remove CO2 from the atmosphere such as reforestation and afforestation projects.
(7) More collaboration: climate change is a complex issue that requires collaboration between governments, businesses and individuals. In the future, we are likely to see more collaboration between these groups to share informatino, knowledge and best practices to reduce emissions and achive carbon neutrality.
(8) Development of new technologies: which are expected to continue to be developed and deployed which will help to signicantly reduce emissions from power plants and industrial processes (Below you will find few examples of the many deep technologies that can help achieve carbon neutrality - each of these initiatives is at different level of maturity, some of them are already in commercial use while others are still in the research and development phase and, some have yet to be proven at scale):
Carbon capture and storage (CCS): technologies capturing carbon dioxide emissions from power plants and industrial processes and then store them underground preventing them fron entering the atmosphere.
Bioenergy with carbon capture and storage (BECCS): involgin technologies growing plants such as trees and grasses which abosrb carbon dioxide from the atmosphere. The plants are then burned to generate electricity with the carbon dioxide emissions captured and stored.
Hydrogen fuel cells: with devices that convert the energy from hydrogen to electricity which can power vehicles, buildings and other applications without emitting greenhouse emissions.
Advanced Nuclear Reactor: are designed to be safer, more efficient and produce less waste than traditional reactors and can be used to produce electricity without CO2 emissions.
Direct air capture: technologies capturing carbon dioxide directly from the air and can be used to reduce emissions from industrial processes and power generation.
Overall carbon neutrality is an ongoing process that requires continued efforts and innovations to reduce emissions and achive net-zero emissons. WIth the increasing awareness of the need to address climate change and the commitment of many countries, companies and individuals, it is expected that the momentum towards carbon neutrality will continue to grow in the future.