Goodbye To All That (Palm): Kao joins, Unilever, Geno in post-palm oil development

October 3, 2022 |

News arrives from California that global consumer products giant Kao has joined a venture to scale and commercialize plant-based alternatives to palm kernel oil, alongside Genomatica and Unilever. The company’s exact investment was undisclosed — the initial announce was the $120M Unilever and Genomatica announce —we understand that Kao’s invest is additive to that amount.

So, it’s goodbye to all that palm, to steal a phrase from the book by Robert Graves.

To be perfectly honest, I have never believed in much of the anti-palm narrative — what strikes many people as a colossal feedstock crisis I have regarded as a problem of the failures of local zoning laws and enforcement. When people demonize the tree instead of the zoning laws, I stand with Graves when he wrote (on the subject of actual war, not the climate wars):

“England looked strange to us returned soldiers. We could not understand the war-madness that ran wild everywhere, looking for a pseudo-military outlet. The civilians talked a foreign language. I found serious conversation with my parents all but impossible.”

But the horse has truly bolted from the paddock on the palm issue, companies are wise to find palm alternatives and other companies are wise to bring opportunities found in synthetic biology to reach those ends. And some times, there are substantive benefits that biology brings that exceed the functional attributes of palm kernel oil.

For example, initial research has shown that companies can reduce the carbon footprint of palm-derived ingredients by up to 50% with Genomatica’s technology-driven, plant-based alternative, and the venture has set a goal of reducing reduce greenhouse gases by 100 million tons. It should also take some pressure off companies that use palm simply to reduce the frequency of protestors showing up at company headquarters wearing orangutan suits and making allegations relating to deforestation. Kai says it will continue to source responsibly-produced palm oil — but everyone could frankly use an alternative simply to get some breathing room.

The venture backstory

In June we reported that Genomatica and consumer giant Unilever have announced a joint venture aimed at commercializing alternatives for palm oil and fossil fuel ingredients in cleaning and personal care products. 

Supported by a $120-million investment by both companies, the unnamed JV will develop an alternative, plant-based ingredient using biotechnology for what the companies estimate is a $625-billion addressable market.  For Unilever, one of the world’s biggest soap and detergent manufacturers, this is the largest investment in biotechnology alternatives to palm oil to date. 

Under the terms of the agreement, Genomatica will deploy its biotechnology platform and is already starting to scale the process for its advanced technology to produce the ingredients. Initial estimates have shown that companies could reduce the carbon footprint of palm-derived ingredients by up to 50% with this technology-driven, plant-based alternative. 

About that Geno name

These days we should parenthetically note that Genomatica is styling itself Geno, and has joined the Woodstock generation with an updated website based in the proposition that “We believe that all products should be responsibly sourced, traceable and transparent.” Presumably, Geno is also for Motherhood and responsibly sourced, traceable and transparent apple pie. We are having a little trouble with the name change, same trouble we had when Standard Oil became Stan, Phillips 66 became Phil, and ADM became Archie. We’ll get there.

The Genomatica backstory

Over the last year, Geno has executed high-impact deals to accelerate the global commercialization of sustainable materials, including a collaboration with lululemon to bring plant-based materials into lululemon’s products; and with Asahi Kasei for plant-based nylon- 6-6; and Geno has achieved production milestones with partners Aquafil for scaling plant-based nylon and with Covestro for plant-based HMD used in sustainable coatings.

Meanwhile, in August we reported that Covestro and Genomatica announced an important industry milestone to advance sustainability resulting from their partnership. The two companies have teamed to be the first to successfully produce significant volumes of a plant-based version of the chemical raw material HMDA (hexamethylene diamine). Teams from Genomatica and Covestro have been working together to develop a commercial process technology for bio-based HMDA. The companies expect to produce ton quantities of high-quality material over the course of multiple production campaigns. Both partners are already processing and testing material from their initial production campaigns, and the resulting bio-HMDA is of high purity and quality. The companies plan to advance the program to full commercial scale, and Covestro has secured an option from Genomatica to license the resulting integrated GENO™ HMD process technology for commercial production.

You can see a great overview on Geno technology and more in our 2022 Multi-Slide Guide to Geno(matica), here.

The Kao backstory

Kao has a portfolio of over 20 leading brands such as Attack, Bioré, Goldwell, Jergens, John Frieda, Kanebo, Laurier, Merries and Molton Brown, with sales in Asia, Oceania, North America and Europe. Combined with its chemical business, Kao generates about 1,42B yen in annual sales. Kao employs about 33,500 people worldwide.

The Bottom Line

It’s a bold move, this venture beyond palm, and Unilever and Kao are wise to be leading on it — not only will they reap the technical benefits in the long-term, along with everyone else — they will reap the carbon leadership credit in the near term. Right now, that’s worth something, as companies urgently seek to communicate they are “doing something” while building scale, without opening themselves to charges of greenwashing. There’s no Potemkin Carbon Village in the Geno portfolio – these are real emissions gains. 

Reaction from the stakeholders

Christophe Schilling, Geno CEO said: “We’re excited to welcome Kao as a founding member to our palm kernel oil alternative venture along with Unilever. Kao joining this venture is another example of Geno collaborating with world-leading brands and value-chain partners to commercialize sustainable solutions at scale that support traceable and responsible sourcing. Together, we will increase the supply chain resiliency our planet and people need today and for the future. Kao’s deep expertise in the home and personal care markets enables us to support other manufacturers in meeting their sustainability commitments and supplying the rising consumer demand for sustainable products.”

Masahiro Katayose, Kao Senior Executive Officer in charge of Chemical Business said: “I am delighted that Kao has had the opportunity to invest in a venture with such outstanding, cutting-edge biotechnology capabilities. Besides being a manufacturer of consumer products for household use, Kao is also a chemical manufacturer that supplies the industry with a wide range of materials and has adopted “Protecting future lives” and promoting “Sustainability as the only path” as its Mid-term plan K25 vision. To drive sustainable development and contribute toward the building of a resource-circulating society, Kao will continue to undertake responsible, sustainable palm oil procurement. In this regard, Geno’s biotechnology has a vital role to play in the diversification of sustainable raw material procurement. Kao’s investment in this venture will make possible the provision of new eco-chemical solutions and represents an opportunity for Kao to play an even bigger role in helping consumers, customers, industry and society to realize decarbonization and make the shift to a resource-circulating economy.”

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