Engineers and scientists are working to produce the first yeast-based alternative to palm oil on an industrial scale.

Teams from the University of Bath and University of York are developing the palm oil substitute from a yeast grown using sustainably-sourced waste feedstocks.

Palm oil is an edible vegetable oil, high in saturated fats - with a high melting point, and is derived from the fruit of oil palms, mostly the species Elaeis guineensis.

Approximately 60 million tonnes of palm oil is produced each year across the world, with more than 40 million tonnes exported to over 70 countries.

The oil, which has relatively low production costs, is used in biofuels, food such as cakes and biscuits, and cosmetic products including lipstick and shampoo.

However, a high demand for the oil has caused the rapid expansion of palm plantations in South East Asia.

This has been linked to widespread and severe deforestation, water pollution, increased greenhouse gas emissions and heavy smog pollution across the area.

Scientists at the University of Bath previously found the yeast Metschnikowia pulcherrima can be grown on a variety of agricultural and food wastes.

With slight changes to growth conditions, the yeast can be made to produce a thick oil with nearly identical qualities to palm oil.

Researchers say they are confident it could became a direct replacement for palm oil, mitigating the environmental issues associated with palm oil production.

The team, along with industry partners Croda, C-TECH and AB Agri, has been awarded a grant of £4.4 million to examine how to produce the oil on an industrial scale.

Lead researcher Dr Chris Chuck, and a lecturer in the department of chemical engineering at the University of Bath, said: "This project is an exciting opportunity for us to develop a renewable alternative to palm oil, while developing further sustainable technologies that could have a significant impact on many other UK sectors."

During the research, scientists will apply a method of depolymerizing waste feedstocks using efficient large-scale microwave heating at the University of York.

The team at the University of Bath will improve the genetic understanding of the yeast, scale up the fermentation to an industrial scale and assess the total environmental impact across the life cycle.

Professor James Clark, from the University of York, said: "This is a great opportunity for an outstanding multidisciplinary team to integrate cutting edge bio- and chem-technologies to tackle a major global resources challenge."

The four year project has been jointly funded by BBSRC, EPSRC and Innovate UK as part of the IB Catalyst Programme, aimed at supporting the development and commercialisation of innovative Industrial Biotechnology processes.

Dr Tim Mays, head of the University of Bath's department of chemical engineering, described the team working on the yeast as "fantastic".

"The work will have significant positive impact in sustainable energy, food and personal care technologies," he added.