From its beginnings as a humble university start-up, Euglena has grown into an impressive firm that develops a variety of products utilising their micro-algae namesake Euglena, which contains 59 nutritional elements. In this interview, founder and president of Euglena Co. Mitsuru Izumo, discusses the company’s history of battling malnutrition in developing nations, its new innovative renewable fuels, SUSTEO, and future outlook.
Where do you believe the competitiveness of Japan’s industry comes from today?
This is a tough question. The needed amount of capital is totally different from that of Japan, China, South Korea, and in the US. This time, I would like to tell you the situation, especially, among startups originating from universities because we, Euglena Co. are originated from the University of Tokyo. Today, in Japan, there are around 3,000 university startups and 66 of them are currently listed on the Tokyo Stock Exchange. We were the first University of Tokyo startup to be shifted to the first section of Tokyo Stock Exchange in 2014. Many other startups have great technologies and they should be known to more people, however, they do not have enough money, due to this, they are not able to bring themselves to the next stage which involves providing concepts, skills, or products. Inevitably some capital is needed, unfortunately, the small startups especially from the universities and colleges cannot produce enough innovative services and products without significant financial support.
When Euglena Co. shifted to the first section of Tokyo Stock Exchange (2014)
I have a question about Euglena. We saw in our research it is a micro algae with combined plant and animal properties. Could you give us a quick explanation of what Euglena is and secondly, what are the target applications for it?
I visited Bangladesh in 1998 and I saw the malnutrition problem. There was an abundance of rice but shortage of other nutrients such as vitamins and minerals. When I came back to Japan, I started studying about nutrition to deliver to the people in Bangladesh, even though logistically, Bangladesh is hard to deliver fresh food to. Then I encountered the microalgae Euglena. Euglena is a microalgae with a body length of a mere 0.05mm-0.1mm. You cannot see it with the naked eye - we need to use a microscope. Organisms related to Euglena are said to have been born in ancient times, around 500 million years ago. Euglena is a microalgae, so same as a plant, it has chlorophyll and is capable of photosynthesis by taking carbon dioxide (CO2). At the same time, this is one of unique points of Euglena, it can move like an animal - it has characteristics of both animals and plants. Surprisingly, Euglena contains 59 rich nutritional elements such as vitamins, minerals and amino acids, as well as unsaturated fatty acids such as DHA and EPA. So I thought it is Euglena that can solve the malnutrition problem in Bangladesh. So I decided to tackle the malnutrition problem with Euglena.
Izumo aged 18 and children in Bangladesh when he visited Bangladesh (1998)
At that time I found Euglena, it was said that outdoor mass cultivation of Euglena was impossible because it is nutritionally rich, and because it is located at the bottom of the food chain, it serves as a food source for other organisms. A lot of scientists and researchers around the world were attempting mass cultivation of Euglena. In Japan, there was a national plan for outdoor mass cultivation of Euglena in the 1980s, but no one could establish an effective way. So we went through a process of trial and error. We changed the approach, created a new cultivation method, and were finally succeeded for outdoor mass cultivation of edible microalgae Euglena in Ishigaki island, the southern part of Japan, for the first time in the world.
The microalgae Euglena
I am very curious to know about the impact of the Covid-19 pandemic on your company. Since the advent of the pandemic, there has been a rise in crude oil prices which has led to the increase of food and shipping prices. Can you elaborate to us how Covid-19 has impacted your business?
Covid-19 did not negatively impact our company because we mainly sell products through our e-commerce platform to subscribers. Before Covid-19, the number of our subscribers was approximately 210,000. We ship our products directly to them and they enjoy using them. Our health-related products became popular to senior citizens and the subscriber count actually increased even during Covid-19, and so far, more than 340,000 subscribers are enjoying our products. Covid-19 brought people an opportunity to think about health seriously and it would promote a positive impact on our business.
The number of subscribers (from a financial highlight if FY12 2021 4Q)
I have lived in Rwanda for some time and it was sad to see children, especially when I went to Democratic Republic Congo, suffering from malnutrition. I was acquainted with someone who works for an NGO that provides food for these children. He told me that one of the big problems with this type of initiative is it is one thing to give the food, but the huge problem is how to sustain it. If a sponsor company shuts down due to financial problems, no one else could give the food. They had to teach these people how to cultivate basic types of grains and materials. For a longer perspective, what goals do you have for your operations in Bangladesh?
That is the most important one and I thank you for giving me such a great question. I totally agree with what you said on how to make this kind of humanitarian project sustainable. First of all, we have to clarify what the problem is. In Bangladesh, it is clear that the people are not facing starvation, the real issue is malnutrition, the lack of nutrients. In fact, we, the Japanese people, enjoy eating rice in our daily meals and we consume about 50 kilograms of it every year. On the other hand, the people in Bangladesh eat more than 180 kilograms of rice every year. As I said before, the problem is not starvation but malnutrition.
To tackle this problem, we have started the “Euglena GENKI program” which distributes nutrient-rich Euglena cookies as school lunch to the children in Bangladesh since 2014. As of the end of February 2022, the number of Euglena cookies distributed has exceeded 13 million. At the same time, we are providing agriculture skills, especially mung beans cultivation, to local farmers. Mung bean is a vitally important ingredient in dal soup, which is a widely-consumed local food; and it is also an ingredient for bean sprouts, which are consumed widely in Japan. This project aims to eradicate poverty and stabilize the food supply by providing guidance for Bangladeshi small farmers in advanced Japanese techniques for mung bean cultivation, and then supplying the resulting high-quality mung beans both domestically and in Japan. From this mung bean project, local farmers can get high quality of technique and higher sales prices compared to before.
Children who eat Euglena cookies (2021)
I would like to talk more about energy, specifically SUSTEO, which is a renewable fuel, whose feedstock includes used cooking oil and microalgae, such as Euglena, to create an alternative for fossil fuels. This is also used in a variety of applications that include airplanes, ferries, buses, fire engines, and others. What potential does SUSTEO have as an alternative fuel source? What advantages does it have compared to other alternatives such as ammonia in the shipping or ferry industry, or hydrogen or electric in the automotive industry?
Before I talk about our renewable fuel, SUSTEO, I would like to share something interesting to you. We are cultivating a variety of Euglena. Some types can produce a huge amount of high quality lipids in their body. We set up a new special plant, Japan's first Sustainable Aviation Fuel (SAF) and renewable diesel fuel manufacturing demonstration plant, in Yokohama; we invested JPY 63.7 million into this. We are using different types of ingredients, used cooking oil and microalgae such as Euglena, and put them in a refining process and finally manufacture renewable fuel, SUSTEO. SUSTEO got ASTM D7566 Annex 6 standards for bio-based feedstock as established by ASTM, the American Society for Testing and Materials, the regulating body for international standards. Euglena’s renewable fuel manufacturing demonstration plant utilizes a proprietary Biofuels ISOCONVERSION process.
SUSTEO is the world’s first renewable fuel that is certified by the ASTM standard the technology complies with and can be blended up to 50% with existing fossil-based jet fuels.
SUSTEO (from left SAF and renewable diesel fuel)
In addition to the point of SAF, SUSTEO renewable diesel fuel is also used for various types of transportation, including buses and marine vessels. It is possible to use SUSTEO in place of light diesel oil, a fossil fuel, since they share the same molecular structure. Another merit is that there is no need to alter any vehicles or equipment, meaning that the existing infrastructure may be utilized as is.
A bus and a ferry which used SUSTEO (2020)
A big problem of SUSTEO is the cost. What is your strategy to overcome the particular obstacle of lowering cost?
It is true that cost is a huge issue when it comes to manufacturing SUSTEO. Currently the price of SUSTEO is 100 times more expensive compared to petroleum fuel. In Japan, per liter of petroleum fuel costs roughly 1 to 2 USD while the cost per liter of SUSTEO is around 100 USD. I have strong confidence that I will be able to reduce the cost by 2025. Now we have ability to produce maximum 125 KL per year and the capacity is extremely limited. We have already advanced a plan to build a commercial plant in 2025 which will have an estimated annual production volume equivalent to our ownership of 250,000 kL per year, 2,000 times of the amount which our current demonstration plant manufactures. At that time, we will be able to produce SUSTEO for 2 to 3 USD per liter. This price is very close to the prices of conventional oil products.
Speaking of developing countries and your activities in the international market, how do you plan to further develop your international business? Are there any other particular regions or markets that you consider key as part of your business development?
Asia is the key area for our international expansion. In terms of renewable fuel, especially in the field of air travel, airlines should reduce their CO2 emissions. First, the Japanese government announced a target to reduce 46% of greenhouse gases, including CO2, by 2030 compared to the amount of year 2013. Currently Japanese airlines are consuming 10 million tons of jet fuel each year. The government pushed them to replace 10% of current fuel to SAF (Sustainable Aviation Fuel) to reduce CO2 emissions. Not only the Japanese government, but also each country’s government and even the international organization set a target to reduce the amount of CO2 emissions from the aviation industry. I have confidence that I have a business opportunity there. Some energy companies are already providing SAF, however, it is not enough, especially in Asia, so I am aiming to get this business opportunity. To get these opportunities, we are providing SAF for commercialization.
The FDA airplane which flew using SUSTEO (2022)
Imagine we come back to interview you again on the last day of your presidency, what would you like to have achieved for your company? What is your ultimate goal?
I would like to build up the Poverty Museum in Tokyo and Dhaka, Bangladesh, and be the manager of the “malnutrition floor”. In a museum for dinosaurs and ancient artifacts, we cannot fully comprehend or see these exhibits because these eras are already over, so I would like to make a world in which poverty is ended. I have strong confidence in eradicating poverty, especially the malnutrition problem with Euglena. It is my hope that I guide and explain that “there used to be poverty and malnutrition situation in the world.” to students who come to the Poverty Museum as a study field trip.