Palm oil is in almost everything, and it’s devastating rainforests. This Bill Gates-backed company used microbes to create an alternative
Shara Ticku and David Heller, co-founders of C16 Biosciences.
Photo courtesy C16 Biosciences.
In July 2013, Shara Ticku traveled to Singapore on a work trip for Goldman Sachs. The investment bank made her bring N95 masks to protect her from the terrible air quality at the time.
“I land in Singapore, and the air quality index is over 400. Air quality index: anything over 300 is considered super toxic. In New York right now, it’s probably in the 20s, and that’s for a big city,” Ticku told CNBC in a video interview on Tuesday. “They closed schools, they told pregnant women they can’t walk outside. It was crazy. And I had no clue what was going on.”
Ticku asked her local colleagues who informed her that neighboring countries Indonesia and Malaysia were burning rain forests to make palm oil. “By the way, we deal with this every year,” they told her.
That was the first time Ticku ever heard about palm oil but the experience would stick with her.
Ticku went on to work for in health issues, first at the Clinton Health Access Initiative, then at the fertility benefits management company Progyny, and then at the United Nations as the Secretary General’s Special Envoy for Health and Malaria.
Shara Ticku, co-founder and CEO of C16 Biosciences, holding their palm oil alternative, Palmless.
Photo courtesy C16 Biosciences.
She also went back to school and got her MBA at Harvard, where she met Harry McNamara, who was then getting his PhD in physics at Harvard and his PhD in health sciences and technology at Massachusetts Institute of Technology, and David Heller, who was studying biological sciences at the Massachusetts Institute of Technology. The three came together in a interdisciplinary class at the MIT Media Lab whose goal was for students to use their knowledge base to collaborate and solve a global challenge.
McNamara shared his experience of visiting Costa Rica with some friends to see the rainforest and seeing rows of systematically planted oil palms. When McNamara told Ticku and Heller about his experience, Ticku had a distinct feeling of déjà vu.
These experiences became the catalyst for the company that is now C16 Biosciences, which has raised $24 million from investors including Breakthrough Energy Ventures, the climate tech investing firm funded by Bill Gates.
On Thursday, C16 Biosciences is announcing the launch of Palmless, a palm oil alternative it’s invented and been able to produce at scale.
C16 Biosciences, named after the 16-carbon fatty acid that is of the primary components of palm oil and its microbial alternative, has produced 50,000 liters of its commercial-grade product. The company says it will begin appearing in beauty products next year, but declined to identify any of its customers.
What is palm oil and why is it a climate hazard?
Part of what makes palm oil so dangerous is its ubiquity: It’s found in more than half of the packaged products Americans use, including ice cream, lipstick, soaps and detergents, according to the World Wildlife Fund. It makes up 40 percent of traded vegetable oils, according to a paper published in CABI Agriculture and Bioscience, and the industry produces 81 million tonnes per year — almost as much as the next two largest vegetable oil crops, soybean and rapeseed, combined.
Palm oil grows best in the regions right around the equator, so palm oil producers chop down rainforest and clear that felled vegetation by burning it, making it a prime target of conservation organizations like the Rainforest Rescue and the World Wildlife Fund.
Palm oil trees grow at the Cikasungka palm oil plantation, operated by PT Perkebunan Nusantara VIII, in Bogor Regency in West Java, Indonesia, on Monday, June 20, 2022. Indonesia has slashed the maximum crude palm oil export levy by nearly half in another step to speed up shipments after lifting a temporary export ban on the commodity last month.
Bloomberg | Bloomberg | Getty Images
“It’s truly slashing and burning: Burn the trees, cut down the trees, and then they burn the peatlands that the trees sit on top of, which makes it a double whammy for carbon dioxide emissions because the trees hold carbon and the peatlands hold carbon,” Ticku said. Peatlands are marshy, boggy, wet land which are known to be tremendous carbon sinks.
Burning the forests also releases greenhouse gases, as does creating the fertilizer used by these plantations.
Palm oil plantations also affect biodiversity. The rainforest that gets cleared to make palm oil is home to endangered species including rhinos, elephants and tigers, according to the WWF. Clearcutting land in Borneo and Sumatra for palm oil agriculture is the greatest threat to orangutans, according to the Orangutan Foundation International.
A Forest was recently cleared up to plant oil palm trees in Rawa Singkil WIldlife reserve, on June 15, 2017 in Aceh, Indonesia. Global Forest Watch released the latest data showing that tree cover loss in Indonesia remains high and the acceleration can be largely attributed to massive expansion of oil palm plantations. Nearly half of the tree cover loss occurred in the Kalimantan region, where palm oil plantations have grown enormously since 2005 while in Sumatra, tree cover loss slowedbut only because the region no longer has accessible primary forest to cut.
Future Publishing | Future Publishing | Getty Images
“The thing about deforestation is nobody wants you to know that they’re doing it. People really try to hide it,” Ticku told CNBC. That makes it hard to track greenhouse gasses associated with palm oil production.
A 2018 analysis from the International Council on Clean Transportation estimated that land use changes in Indonesia and Malaysia emitted approximately 500 million tonnes of carbon dioxide equivalent each year. At the time, that was 1.4 percent of global net CO2 equivalent emission, which was almost as much as the aviation sector and more than the state of California emitted, the ICCT said.
Nonetheless, the industry continues to grow. The global palm oil market was valued at $63.7 billion in 2021 is expected to continue to grow to reach $98.9 billion in 2030, according to a report published in May from Grand View Research, a global market research firm.
That’s because palm oil is relatively inexpensive and “so damn good at what it does,” Ticku said. “Palm oil is used in most candies that have a chocolate coating, and it is truly the thing that is responsible for making chocolate melt in your mouth and not in your hand, because it’s got a melting profile that melts at body temp and not at room temperature.”
Environmental activists at ‘The Human Orangutan Conflict Response Unit – Orangutan Information Center’ (HOCRU – OIC) saves the Sumatran orangutan trapped in oil palm plantations on June 10, 2017 in North Sumatra, Indonesia, It is illegal to capture, kill, or keep orangutans as pets in Indonesia, prosecutions are rare and orangutan often meet this fate. Adult orangutan with her son is one of the ‘lucky’ that was saved by The Human Orangutan Conflict Response Unit – Orangutan Information Center (HOCRU – OIC) and taken to the forest Gunung Leuser National Park after being stuck on palm oil plantations. Sumatran orangutans (Pongo abelii) are a distinct species and listed as Endangered by the World Conservation Union (IUCN) on their Red List of Threatened Species. The Sumatran orangutan is considered the more immediately in danger of extinction, with only around 6,600 or so left in the wild today, and is therefore classified as Critically Endangered. The species is also listed on Appendix 1 of the Convention on International Trade in Endangered Species (CITES), under which animals smuggled out of their natural range country and confiscated should whenever possible be repatriated and returned to the wild.
Future Publishing | Future Publishing | Getty Images
Using yeast to solve the problem
When the C16 team was getting started in 2017, the idea of using biotechnology to make consumer products was relatively new, but Impossible Foods had just released its burger, which uses fermentation of yeast to make heme, the protein that makes a product taste meat-like.
“People began to really think long and hard about what what does it mean to consume and use products that were developed with biotechnology,” Heller told CNBC in an interview at C16 Biosciences’ company headquarters in Manhattan on Tuesday.
Investors are betting that customers are ready for those alternatives. “Consumers are increasingly more aware of the climate problem, which includes the deforestation involved in palm oil production, and are looking for ways they can contribute with their purchasing power,” Carmichael Roberts, one half of the investing committee for Gates’ climate investing firm, told CNBC.
To make its palm oil alternative, C16 Biosciences uses a wild type yeast microbe that makes a functional equivalent to palm oil with a kind of fermentation process. And fermentation — which is what has been used to make wine, beer and cheese for ages — is a “really, really robust, scalable process,” Heller said.
The firm was able to move so fast in part because microbes speed up research and development.
“We can design an experiment and start it and get a learning about whether that helped us produce better and more oil within about seven days,” Heller said. “It takes about one week from end to end.” By comparison, trying a new seed at a palm oil plantation takes more like seven years.
The C16 Biosciences labratory in Manhattan.
Photo courtesy: Cat Clifford, CNBC
Chemically, the palm oil that C16 Biosciences makes is not identical to the palm oil that is grown in industrial agriculture farms. However, “it contains the same fatty acids, which are the molecular fingerprints of fats and oils, that palm oil does,” Heller told CNBC. “And that’s a really important characteristic that allows our oil to function in the same kind of end products in the food and beauty and personal care space as palm oil does.”
While C16 Biosciences is launching in 2023 with beauty products, it’s not yet applied for approval from the United States Food and Drug Administration to be included in food products.
Right now, C16, with 35 employees and $24 million in total venture capital, is laser-focused on scaling up its palm oil alternative and simultaneously bringing the price down.
“But what we are building is a platform technology that can produce all different kinds of microbial oils,” Heller told CNBC. “So it’s definitely possible that we’re able to make other kinds of vegetable oil replacements in the future.”
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
WATCH: Amazon CEO Andy Jassy says sellers will pass cost of tariffs on to consumers
Google CEO Sundar Pichai testifies before the House Judiciary Committee at the Rayburn House Office Building on December 11, 2018 in Washington, DC.
Alex Wong | Getty Images
Google’s antitrust woes are continuing to mount, just as the company tries to brace for a future dominated by artificial intelligence.
On Thursday, a federal judge ruled that Google held illegal monopolies in online advertising markets due to its position between ad buyers and sellers.
The ruling, which followed a September trial in Alexandria, Virginia, represents a second major antitrust blow for Google in under a year. In August, a judge determined the company has held a monopoly in its core market of internet search, the most-significant antitrust ruling in the tech industry since the case against Microsoft more than 20 years ago.
Google is in a particularly precarious spot as it tries to simultaneously defend its primary business in court while fending off an onslaught of new competition due to the emergence of generative AI, most notably OpenAI’s ChatGPT, which offers users alternative ways to search for information. Revenue growth has cooled in recent years, and Google also now faces the added potential of a slowdown in ad spending due to economic concerns from President Donald Trump’s sweeping new tariffs.
Parent company Alphabet reports first-quarter results next week. Alphabet’s stock price dipped more than 1% on Thursday and is now down 20% this year.
In Thursday’s ruling, U.S. District Judge Leonie Brinkema said Google’s anticompetitive practices “substantially harmed” publishers and users on the web. The trial featured 39 live witnesses, depositions from an additional 20 witnesses and hundreds of exhibits.
Judge Brinkema ruled that Google unlawfully controls two of the three parts of the advertising technology market: the publisher ad server market and ad exchange market. Brinkema dismissed the third part of the case, determining that tools used for general display advertising can’t clearly be defined as Google’s own market. In particular, the judge cited the purchases of DoubleClick and Admeld and said the government failed to show those “acquisitions were anticompetitive.”
“We won half of this case and we will appeal the other half,” Lee-Anne Mulholland, Google’s vice president or regulatory affairs, said in an emailed statement. “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
Attorney General Pam Bondi said in a press release from the DOJ that the ruling represents a “landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.”
Potential ad disruption
If regulators force the company to divest parts of the ad-tech business, as the Justice Department has requested, it could open up opportunities for smaller players and other competitors to fill the void and snap up valuable market share. Amazon has been growing its ad business in recent years.
Meanwhile, Google is still defending itself against claims that its search has acted as a monopoly by creating strong barriers to entry and a feedback loop that sustained its dominance. Google said in August, immediately after the search case ruling, that it would appeal, meaning the matter can play out in court for years even after the remedies are determined.
The remedies trial, which will lay out the consequences, begins next week. The Justice Department is aiming for a break up of Google’s Chrome browser and eliminating exclusive agreements, like its deal with Apple for search on iPhones. The judge is expected to make the ruling by August.
Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House on June 23, 2023 in Washington, DC.
Anna Moneymaker | Getty Images
After the ad market ruling on Thursday, Gartner’s Andrew Frank said Google’s “conflicts of interest” are apparent by how the market runs.
“The structure has been decades in the making,” Frank said, adding that “untangling that would be a significant challenge, particularly since lawyers don’t tend to be system architects.”
However, the uncertainty that comes with a potentially years-long appeals process means many publishers and advertisers will be waiting to see how things shake out before making any big decisions given how much they rely on Google’s technology.
“Google will have incentives to encourage more competition possibly by loosening certain restrictions on certain media it controls, YouTube being one of them,” Frank said. “Those kind of incentives may create opportunities for other publishers or ad tech players.”
A date for the remedies trial hasn’t been set.
Damian Rollison, senior director of market insights for marketing platform Soci, said the revenue hit from the ad market case could be more dramatic than the impact from the search case.
“The company stands to lose a lot more in material terms if its ad business, long its main source of revenue, is broken up,” Rollison said in an email. “Whereas divisions like Chrome are more strategically important.”
WATCH: U.S. judge finds Google holds illegal online ad-tech monopolies
Jason Citron, CEO of Discord in Washington, DC, on January 31, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
The New Jersey attorney general sued Discord on Thursday, alleging that the company misled consumers about child safety features on the gaming-centric social messaging app.
The lawsuit, filed in the New Jersey Superior Court by Attorney General Matthew Platkin and the state’s division of consumer affairs, alleges that Discord violated the state’s consumer fraud laws.
Discord did so, the complaint said, by allegedly “misleading children and parents from New Jersey” about safety features, “obscuring” the risks children face on the platform and failing to enforce its minimum age requirement.
“Discord’s strategy of employing difficult to navigate and ambiguous safety settings to lull parents and children into a false sense of safety, when Discord knew well that children on the Application were being targeted and exploited, are unconscionable and/or abusive commercial acts or practices,” lawyers wrote in the legal filing.
They alleged that Discord’s acts and practices were “offensive to public policy.”
A Discord spokesperson said in a statement that the company disputes the allegations and that it is “proud of our continuous efforts and investments in features and tools that help make Discord safer.”
“Given our engagement with the Attorney General’s office, we are surprised by the announcement that New Jersey has filed an action against Discord today,” the spokesperson said.
One of the lawsuit’s allegations centers around Discord’s age-verification process, which the plaintiffs believe is flawed, writing that children under thirteen can easily lie about their age to bypass the app’s minimum age requirement.
The lawsuit also alleges that Discord misled parents to believe that its so-called Safe Direct Messaging feature “was designed to automatically scan and delete all private messages containing explicit media content.” The lawyers claim that Discord misrepresented the efficacy of that safety tool.
“By default, direct messages between ‘friends’ were not scanned at all,” the complaint stated. “But even when Safe Direct Messaging filters were enabled, children were still exposed to child sexual abuse material, videos depicting violence or terror, and other harmful content.”
The New Jersey attorney general is seeking unspecified civil penalties against Discord, according to the complaint.
The filing marks the latest lawsuit brought by various state attorneys general around the country against social media companies.
In 2023, a bipartisan coalition of over 40 state attorneys general sued Meta over allegations that the company knowingly implemented addictive features across apps like Facebook and Instagram that harm the mental well being of children and young adults.
The New Mexico attorney general sued Snap in Sep. 2024 over allegations that Snapchat’s design features have made it easy for predators to easily target children through sextortion schemes.
The following month, a bipartisan group of over a dozen state attorneys general filed lawsuits against TikTok over allegations that the app misleads consumers that its safe for children. In one particular lawsuit filed by the District of Columbia’s attorney general, lawyers allege that the ByteDance-owned app maintains a virtual currency that “substantially harms children” and a livestreaming feature that “exploits them financially.”
In January 2024, executives from Meta, TikTok, Snap, Discord and X were grilled by lawmakers during a senate hearing over allegations that the companies failed to protect children on their respective social media platforms.
WATCH: The FTC has an uphill battle in its antitrust case against Meta.
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