Demonstration-scale factory for producing yeast oil to be established by NoPalm Ingredients and NIZO in the Netherlands

Dutch startup NoPalm Ingredients is partnering with NIZO Food Research to establish a demo facility at NIZO's food innovation campus in Ede, Netherlands. This new facility will focus on producing palm oil alternatives via fermentation.

The demo facility, set to begin operations in the second half of 2026, will have an initial capacity of 1,200 tonnes per year. It will primarily run on dairy side streams as feedstock, a decision made to ensure price parity and sustainability.

NoPalm is not genetically engineering the yeast strains but uses directed evolution to enhance their performance. This approach allows for the production of a wide range of fatty acid profiles, making their lipids a true drop-in replacement with the same composition as conventional palm fractions.

The startup is initially focusing on mid-fraction palm-type oils rather than commodity oils. This strategy is in response to customer demand for a sustainable and deforestation-free alternative to palm oil, at the same functionality and price.

NoPalm is aiming to offer oils at price parity or even a green discount to make a significant impact in the market. To achieve this, the company has made design decisions to ensure price parity at scale in their production process.

The startup has raised €5 million ($5.9 million) and is planning to raise a Series A round for building and operating the demo factory. Investors participating in this round include strong commitments from existing investors and advanced discussions with new investors, though specific names are not publicly disclosed. The company is complementing this round with grant funding and partner contributions.

The demo facility will use fermenters in a total volume of 63,000 litres. NoPalm currently operates a pilot line with a 400-liter fermenter and has scaled production with a contract manufacturer.

In the US, NoPalm will be pursuing the self-affirmed GRAS route, "if it still exists." In the EU, NoPalm is not required to file a novel food application but is instead pursuing the Article 4 substantial equivalence route. The company is focusing on the EU market due to upcoming regulations requiring proof that goods do not contribute to deforestation, forest degradation, or breaches of local environmental and social laws.

NoPalm is targeting the EU market because of customer demand for a sustainable and deforestation-free alternative to palm oil. The company's goal is to offer a viable solution that can help businesses meet these growing sustainability requirements while maintaining functionality and cost-effectiveness.