Neela Biotech has raised £2.1 million in pre-seed funding to move its waste-to-sustainable aviation fuel technology from the laboratory into a pilot-scale trial at a biogas plant within two years. Led by Elbow Beach, which committed £1.5 million, the round also includes Ascension, Cambridge Enterprise, Ventures Together and strategic angel investors. The Cambridge start-up uses an AI-guided microbial process to convert food, agricultural and forestry waste into fatty acids for HEFA-based sustainable aviation fuel, or SAF. Its approach is designed to broaden the available feedstock base while using existing biogas infrastructure and pursuing cost parity with fossil jet fuel at scale.

A Broader Feedstock Route

About 95% of SAF currently produced uses HEFA, which turns waste cooking oil and other fats into fuel. It remains the most established and lowest-cost SAF route, yet supply of these feedstocks limits how much production can expand. HEFA-based SAF costs around 1.5 times more than standard jet fuel, while e-SAF made using renewable electricity can cost up to 10 times more.

Neela’s Controlled Microbial Upcycling process is intended to create fatty acids from a wider range of waste materials. Those fatty acids are a precursor for HEFA-based SAF production, offering a possible replacement for scarce waste oils. The company is focusing first on aviation, where annual global jet fuel consumption is 300 million tonnes.

Deepanshu Singh, CEO at Neela Biotech, said:

“Most SAF today is made from waste oils and fats through HEFA. But the world burns 300 million tons of jet fuel every year, and there is simply nowhere near enough waste oil and fat to meet this demand. When Friederike and I founded Neela Biotech, we set out to make HEFA-SAF cheaper and scalable.”

Using Existing Biogas Plants

The technology is built around anaerobic digestion, the process already used in biogas plants across Europe. Rather than requiring purpose-built facilities, Neela plans to deploy its process into existing sites. This could reduce the capital expenditure needed for SAF production and give biogas plant operators another potential revenue source as government subsidies for biogas run out.

The company also positions its microbial route as a lower-energy alternative to thermochemical processes used in conventional SAF production. Local and distributed production through biogas plants could reduce reliance on fossil-derived inputs, while alternative waste feedstocks could lessen exposure to constrained cooking-oil supplies.

Deepanshu Singh, CEO at Neela Biotech, said:

“Our Controlled Microbial Upcycling process leverages recent advances in AI-driven synthetic biology to convert diverse waste streams like food and agriculture waste into HEFA-compatible feedstocks. By integrating our technology with existing biogas plants, we can reduce capital requirements, accelerate deployment, and enable distributed, local production.”

Fuel Costs And Supply Risk

The funding arrives during a period of heightened concern about aviation fuel costs and supply security. The UK imports more than half of its jet fuel from the Middle East, leaving airlines exposed to price volatility that can be passed to travellers through fares. It also cites disruption linked to the closure of the Strait of Hormuz, which it says has affected roughly a fifth of the world’s oil supply.

Against this backdrop, Neela’s proposition combines a wider feedstock base with use of established infrastructure. The company’s route to pilot scale will test whether its process can offer the capital efficiency and production economics needed for commercial deployment.

Jonathan Pollock, CEO at Elbow Beach, said:

“Aviation’s fuel bill is only going one way, and the industry urgently needs alternatives that can scale commercially. Too much SAF technology solves for cleaner fuel without solving for cheaper or more available fuel, largely because it still depends on limited feedstocks like waste cooking oil.”

Funding The Pilot Programme

Neela will use the £2.1 million round to advance towards a pilot-scale trial at a biogas plant over the next two years. The company is also part of the IAG innovation programme and has received grant funding from Innovate UK and the Henry Royce Institute.

For investors, the attraction is the potential to use infrastructure already present across Europe while addressing a supply constraint that affects today’s dominant SAF pathway. The pilot will be the next practical measure of whether Neela’s waste-derived feedstocks can support lower-cost SAF production at scale.

Jonathan Pollock, CEO at Elbow Beach, said:

“Neela’s approach is different as it builds on infrastructure that already exists across Europe, avoiding the capital costs that have held back other SAF players, while its low-energy process gives it a credible route to cost parity with fossil jet fuel. It’s that combination of capital efficiency and genuine potential for commercial deployment that convinced us to lead this round from pre-seed through to pilot.”

Towards Commercial Deployment

SAF production will need routes that can work beyond the limited volumes of waste oils and fats currently available. Neela Biotech’s planned pilot brings a distinct proposition to that challenge: converting diverse organic waste streams through microbial processing, then connecting the output to the established HEFA supply chain. Its new funding gives the Cambridge company a defined path to test that model at pilot scale.