14 September 2022 - With some 15 years of experience at animal nutrition companies such as Nutreco, Dr. Vukasin Draganovic has seen several novel ingredients concepts crop up. Nearly all, he believes, were ultimately destined to have little impact, either because the technology could not be profitably upscaled, or because they were not truly sustainable — moving the environmental costs around, rather than making them disappear.
“So [a feed ingredient that’s] truly sustainable, and profitable at the same time—we don’t have that many choices. And this is one, it’s kind of spot on,” he asserts.
Draganovic is speaking of a single cell protein being developed by Gas2Feed, a Norwegian startup founded in 2020 where he works for as Business Development Director.
The product’s working name is O2 Protein. It is a biomass primarily made up of a knallgas bacteria which is naturally found in a geothermal hot spring. As Draganovic explains, the temperatures in this environment make photosynthesis impossible, so instead, the bacteria fix CO2 into biomass, using hydrogen and oxygen.
“What you get is quite a remarkable biomass that is pure protein, 80% plus, very little oil and carbs...when we looked at the amino acid composition we have a pattern that’s more similar to fishmeal than to plant proteins,” he recounts.
This makes it an ideal nutritional profile for feeding fish such as salmon. More interesting than its nutritional profile, though, is its sustainability credentials. Some feed formulators, particularly in the Nordic aquaculture industry, are looking to diversify away from traditional protein sources, concerned by the land use changes associated with soy and the pressures on the ocean caused by intensive fishing.
According to Draganovic, a life cycle assessment carried out by third party experts found that O2 protein had a much lower carbon footprint than competing feed materials, including soy protein content and fishmeal from two different origins. “We would target replacing both here: fishmeal, SPC [soy protein concentrate], but also wheat gluten, the three top protein sources you would see in aquatic diets today.”
Multiple synergies on inputs
The foundational idea behind the company was not just to make a cleaner feed. It was, in fact, to make a cleaner salmon industry. To that end, Gas2Feed is not exactly a standalone operation; it has a sister company, EcoFishCircle, which aims to address challenges such as fish escapes, disease and parasitism with land-based RAS production in individual tanks.
This matters, because one of the unique elements of EcoFishCircle’s RAS design was the capture of CO2 emitted by the tanks. “Fish exhale CO2 as we do,” observes Draganovic. “We’re working together with an institute in Trondheim in Norway called SINTEF, and looking at ways to extract the CO2 and use it in the protein production.” That CO2 then gets used in a fermentation reaction which produces the O2 protein for the feed.
Of course, that’s a neat, low-waste cycle for EcofishCircle. But does it mean that production of Gas2Feed’s protein will be limited by how much CO2 is generated by its partner’s operations, and that it will only ever reach a few fish in Norway? Draganovic says that no, it is not the idea. “We still need to see how it will work with the mass balance… [if CO2 was exclusively sourced from the fish farm] you’d need to have perhaps a super large fish farm and not that big production of protein,” he clarifies.
Therefore, the company is looking into other sources of carbon dioxide to allow them to grow as fast as demand. However, Draganovic is clear that Gas2Feed is committed to only the cleanest of inputs. “You could get the CO2 from industrial waste gasses…that would be the easy target, relatively easy to get, and these bacteria can also tolerate a certain level of impurities. But this is not our intention; we would like to get a kind of biogenic CO2 …direct air capture. There are some two or three companies that are heavily into upscaling these technologies.”
Beyond CO2, though, there are other inputs required to make Gas2Feed’s micro-organisms flourish, and the company’s commitments to clean ingredients extends to these ingredients as well. “We would like to go for a green hydrogen, simply splitting the water by using electricity,” Draganovic states. As it happens, Gas2Feed investor and Chairman of the Board Terje Mikalsen is also a major player in the electrolyser equipment necessary to separate water into its two constituent elements, as a former board member of HydrogenPro AS.
Interestingly, HydrogenPro’s output will also be used by EcoFishCircle directly, not just by Gas2Feed. “Basically we have a lot of synergies in material and energy flows. Obviously fish need oxygen; you need to supply oxygen to fish farms. And by having hydrogen production through the electrolysis process, you can also use oxygen to supply the fish farm.”
This dedication to sourcing its inputs from the greenest pathways possible is an important point of distinction for the company. Whereas others are attempting to replace soy or fishmeal with single cell protein fed on methane from petroleum operations, for example, Gas2Feed’s aim is “carbon recirculation that is truly circular, without any fossil influence,” according to its written material.
How to price in sustainability
There are other points of distinction as well, particularly the design of the gas fermentation reactor. “When you mix hydrogen with oxygen, this is explosive. It can go bang. This is also something that’s a bit tricky with this technology, you’re working with explosive gasses… everything needs to be ATEX certified.”
Of course, success requires not just innovative and high-quality technology, but also an interesting price point. And indeed, the high price of other alternative feed proteins, such as insect meal, have to some extent prevented them from becoming more than niche ingredients.
Draganovic believes Gas2Feed’s product to be much more scalable, and that it will potentially be able to offer a more affordable alternative. “Obviously, we are one of the very few who can produce a new product on a super competitive basis,” he claims. “[But] perhaps it would be a bit of a loss for us if we need to price it at the same price as soy per unit of protein.”
Beyond the production costs, there are other considerations. For one thing, what would be an appropriate return to offset the substantial risk of investing in and developing a new technology? “If we’re talking about commercial production somewhere around 2025 or 2026, we don’t know today how the market, given all the turbulence on this market, is going to respond to these new proteins,” he explains.
And then there is the knotty question of the industry as a whole finding a fair way to divide the increased costs of a sustainability premium. In order for a more sustainable product to catch on in the mainstream market, dominated by a least-cost formulation paradigm, the feed producers must not bear all of those costs only to have another downstream actor reap the financial benefits from consumers of selling a greener (and pricier) salmon. “If anyone is going to pay for sustainability, that needs to be agreed, in a way, all along the value chain…someone will need to pay for this [new feed ingredient with a low carbon footprint]; would it be the end consumer, the fish farmer, the feed producer, or would it be a split?”
It is perhaps a bit early in the game to be talking about pricing. In the immediate future, Draganovic says the company is looking to engage in trials with salmon producers at the end of this year and first quarter of next year, to confirm digestibility and other facets of the protein’s in vivo performance.
At the same time, the company is also extending its small pilot plant at Risavika to reach 1,500l of production capacity in 2023. Meanwhile, in 2024/2025, the company plans to build a demo plant in Lista, and in 2026, a 20,000 tonne per year commercial plant.
According to Gas2Feed, the industry should therefore expect the first of this protein to come to market in three to four years.