Neela Biotech secures £2.1m to convert waste into aviation fuel

Cambridge-based biotechnology firm Neela Biotech has secured £2.1m in pre-seed funding to accelerate the commercialisation of its artificial intelligence-driven technology. The company aims to convert food, agricultural and forestry waste into sustainable aviation fuel, addressing critical decarbonisation challenges within the aviation sector. The new capital will facilitate the transition from laboratory development to pilot-scale trials at an existing biogas plant over the next two years.

The investment round was led by climate technology investor Elbow Beach, which contributed £1.5m to the total sum. Participation in the round also included Ascension, Cambridge Enterprise, Ventures Together and strategic angel investors. This financial backing is intended to support the company’s progression towards commercial deployment, with a specific focus on integrating its proprietary processes into established infrastructure rather than constructing new facilities.

Neela Biotech is developing a method that employs AI-guided microbial technology to transform organic waste into fatty acids. These fatty acids are a crucial ingredient in the production of sustainable aviation fuel. The company’s approach is designed to overcome the limitations of current production methods, which rely heavily on hydroprocessed esters and fatty acids, or HEFA. While HEFA accounts for approximately 95% of current sustainable aviation fuel production, its scalability is constrained by the limited availability of suitable waste oils and fats.

By targeting more abundant waste materials, including food waste, agricultural residues and forestry byproducts, Neela seeks to produce feedstocks that are compatible with existing HEFA production lines. The startup’s Controlled Microbial Upcycling process combines advances in synthetic biology with artificial intelligence to optimise the conversion of these diverse organic waste streams. This strategy aims to address the aviation industry’s need for sufficient quantities of sustainable fuel at prices competitive with conventional jet fuel.

A key aspect of the company’s strategy is the integration of its technology into existing anaerobic digestion infrastructure, such as biogas plants operating across Europe. Neela believes this approach could significantly reduce the capital investment required to scale production. Furthermore, it offers additional revenue opportunities for biogas plant operators while potentially enabling more localised production of sustainable aviation fuel. The lower-energy microbial process is also claimed to provide a route towards cost parity with fossil fuels as production volumes increase.

Jonathan Pollock, chief executive of Elbow Beach, stated that the company’s ability to utilise existing infrastructure was a primary factor in the investment decision. He noted that the aviation industry urgently requires alternatives that can scale commercially, as current technologies often fail to address cost and availability issues due to reliance on limited feedstocks. Pollock added that Neela’s approach avoids certain capital costs associated with other sustainable aviation fuel technologies.

Deepanshu Singh, chief executive and co-founder of Neela Biotech, highlighted the significant barrier posed by the limited availability of waste oils for scaling production. He explained that the Controlled Microbial Upcycling process leverages recent advances in AI-driven synthetic biology to convert diverse waste streams into HEFA-compatible feedstocks. Singh stated that the funding would help the company scale towards its pilot phase and move closer to making locally produced sustainable aviation fuel cost competitive with fossil fuel. The company is also participating in the International Airlines Group innovation programme and has secured grant funding from Innovate UK and the Henry Royce Institute.