Alt protein is the way forward and China is already well ahead of the rest who are infested with destructive neoliberal ideology

With the Rhine drying up and grass turning brown all over Europe (including the UK), even conservative bodies such as the ECB are starting to take notice and comment. On July 2, 2026, a member of the Executive Board, Frank Elderson gave a speech to the 7th World Congress of Environmental and Resource Economists – The green transition – benefits and barriers. In that speech, he directly tied the mounting climate chaos with inflation volatility and emphasised the need to transition as quickly as possible to a net zero carbon economy. I am continuing to draft material for an upcoming book on degrowth and decolonialisation from an Modern Monetary Theory (MMT) perspective. The current area I am researching concerns the evolution of new uses of fermentation to provide food security and allow humanity to transition away from reliance on animal and fish products. The evidence demonstrates that the Chinese are now using its traditional expertise in fermentation to fast track production of Alt protein. As we know, the production of protein via livestock is highly inefficient (protein per hectare) and environmentally unsustainable. Using biomass and converting lignocellulose into food protein is a way around that situation and the Chinese are already way ahead of the rest of us. As long as we hang on to neoliberal ideologies that prevent wide scale state support of emerging industries and starve researchers of state provided R&D funding, the greater will the gulf be between China and the rest of the world on these future technologies and products. We are now seeing this in the production of EVs, for example. Alt protein is the solution for humanity to eliminate livestock dependence. We should be following the processes that China has put in place.

Why we need to end livestock production

In 2006, the FAO published its report – Livestock’s long shadow: environmental issues and options.

It reported that:

1. “The livestock sector is by far the single largest anthropogenic user of land. The total area occupied by grazing is equivalent to 26 percent of the ice-free terrestrial surface of the planet”.

2. “In addition, the total area dedicated to feedcrop production amounts to 33 percent of total arable land. In all, livestock production accounts for 70 percent of all agricultural land and 30 percent of the land surface of the planet.”

3. “Expansion of livestock production is a key factor in deforestation”.

4. “About 20 percent of the world’s pastures and rangelands, with 73 percent of rangelands in dry areas, have been degraded to some extent, mostly through overgrazing, compaction and erosion created by livestock action.”

5. “The livestock sector is a major player, responsible for 18 percent of greenhouse gas emissions measured in CO2 equivalent. This is a higher share than transport.”

6. “The livestock sector accounts for 9 percent of anthropogenic CO2 emissions.”

7. “This high level of emissions opens up large opportunities for climate change mitigation through livestock actions.”

8. “The livestock sector is a key player in increasing water use, accounting for over 8 percent of global human water use, mostly for the irrigation of feedcrops. It is probably the largest sectoral source of water pollution, contributing to eutrophication, “dead” zones in coastal areas, degradation of coral reefs, human health problems, emergence of antibiotic resistance and many others.”

While the FAO (unfortunately) does not advocate humanity becoming vegan, it recognises that major changes are required in livestock production if we are to reduce the carbon footprint.

In June 2018, two researchers (Joseph Poore and Thomas Nemecek) published an article in Science – Reducing food’s environmental impacts through producers and consumers – and found that:

In particular, the impacts of animal products can markedly exceed those of vegetable substitutes … to such a degree that meat, aquaculture, eggs, and dairy use ~83% of the world’s farmland and contribute 56 to 58% of food’s different emissions, despite providing only 37% of our protein and 18% of our calories. Can animal products be produced with sufficiently low impacts to redress this vast imbalance? Or will reducing animal product consumption deliver greater environmental benefits?

The answer is obvious and one that humanity has to come to terms with for a sustainable future.

That future requires the production and consumption of new protein sources and the elimination of animal protein from our diets.

The reality is that the vast majority of the lignocellulose, which is the natural substance that forms the rigid cell walls of plants and is comprised of a combination of cellulose (sugar polymers), hemicellulose (various carbon sugars), and lignin – a polymer that binds the sugards and protects the plants from rot (Source) – is consumed in a massively inefficient way.

The lignocellulose in farming – crops, grasses, by-products etc – is mostly processed for human consumption via livestock, which not only wastes a large percentage of the input but also produces the destructive methane and nitrous oxide emissions noted above.

The way forward is to eliminate the ruminants from the process cycle – that is, ditch the livestock – and, instead, use the biomass as input into what is known as Microbial fermentation.

The process is discussed in this information page from Science Direct – Fermentation.

We learn that:

Fermentation is a traditional, low cost and effective unit operation in food production. It transforms agricultural raw materials into functional and flavored foods through desirable microbial growth and enzymatic activity.

The current developments in the field are working out how to shift from the traditional method of producing “fermented protein foods … exclusively produced with animal protein” to using plants to produce “plant protein” as a pathway to the sustainability of food production.

The further will be in the fermentation of plant protein foods.

The most important agricultural crops – legume production – are wasted by feeding livestock which as I noted above produce very little protein relative to the potential that lies within these crops.

The Japanese understood this a long time ago and know that soy bean provide a significant source of protein and can be farmed more efficiently than livestock protein production.

I eat a variety of fermented soy-protein products – douchi, natto, tempeh, sufu, miso.

Developing the microbial fermentation techniques and combining them with mineral carbonation techniques (which lock carb dioxide into stable solid carbonate rocks – (Source)) – offers a way in which we can generate much higher rates of protein extraction per hectare.

In turn, we can provide essential proteins with much less land usage and redirect the land into other uses – soaking up carbon, restoring biodiversity, and restoring the integrity of the actual soil structures.

It will also ultimately provide solutions to food insecurity but also for housing construction, given that we cannot keep extracting timber and cement resources at the current rate for much longer.

A bushfire in Australia a few years ago created a critical shortage of construction timber and with climate change ongoing those sorts of problems are going to become more acute.

The Carbon utilisation economy (CUE)

The Carbon utilisation economy brings these elements together.

This article (April 2025) – A techno-economic assessment of carbon dioxide removal pathways via biochemical conversion of lignocellulose to biofuels and bioplastics – discusses the importance of converting renewable biomass resources (lignocellulose) – into a variety of products (biofuels, bioplastics and carbon nanomaterials).

It outlines a relatively new focus on – biomass carbon removal and storage (BiCRS) – pronounced ‘bikers’ – which use plants and trees to extract carbon from the atmosphere, trap and store it, and then converting it into useful end products.

The conversion process permanently removes the carbon.

Carbon-negative fermentation technologies are one part of this process that allow the sugars to be extracted from lignocellulose.

This is a key aspect of the CUE.

It can already produce fuels but promises also to revolutionise the construction industry (biocements etc to allow dwellings to be printed) and bio protein (food).

The fermentation of lignocellulosic biomass has several stages:

1. “pretreatment of the biomass to remove lignin and increase the accessibility of cellulose and hemicellulose for enzymatic
hydrolysis …”

2. “fermentation of the resulting sugars to bioproducts”.

3. The pretreated biomass yields residual carbon and metabolic energy, which can be used via a process called microbial biocalcifcation to produce various useful products that, for example, can be used in construction (which captures the carbon).

The mainstream view is that:

The development of lignocellulose fermentation technologies is still in its early stages, and several challenges (e.g. production costs, conversion yields, and integration strategies) need to be overcome to achieve commercial viability

But I think that is all about to change in the same way that the Chinese EV sector is dramatically changing the concept of automobiles.

Novel food production

A recent report put out by Good Food Institute APAC – China’s Biomanufacturing Boom Opportunities and Risks for Microbial Protein Producers – is worth considering.

The Good Food Institute APAC is based in Singapore and calls itself “Asia’s leading alternative protein think tank, accelerating a shift towards a more secure, sustainable, and just food system through open-access food science R&D, corporate engagement, and public policy.”

The cited Report is very interesting.

It follows the ‘fermentation ecosystem’ that has been developed in China to become one of the “largest and most developed in the world”.

We learn that:

Decades of investment in fermentation-based industries in China have created a manufacturing sector with vast production capacity, experienced technical talent, established supply chains, and competitive operating costs.

The Chinese government has stated a commitment to “manufacturing novel foods at a competitive price point” – “more so than any
other country on earth.”

Get the drift?

Again, in a vital future area, it is the Chinese state that is seeing more clearly than the rest of us.

The government is helping to redirect the previous expertise developed in fermentation (principally in its pharmaceutical industries) into the production of novel foods, which is spawning “a swathe of highly competitive Chinese startups”.

This trend is running alongside the “significant uncertainty around supply chains, technology collaborations, end market access, and tariffs”, mostly due to the failure of governance in the US.

The previous fermentation industries in China were focused on smaller-scale pharmaceutical production selling at high margins.

But that strategy is now being undermined “the expansion of biopharmaceuticals capacity in China and increased competition from biosimilars (off-patent drugs that are broadly analogous to generics)”.

As a result, the existing fermentation capacity is being leveraged “to produce mycoprotein, yeast proteins, and precision-fermented fats”, which offers great hope for the future decarbonised economy.

It is not just the manufacturing capacity that is being expanded.

Chinese companies are receiving state support to invest in:

… strain development, process optimisation, and the development of technological capabilities to drive forward alt protein innovation.

The way in which the microbial fermentation is moving ahead in China is really a blueprint for the rest of us.

However, it is an approach that the international agencies that dominate global economic discussions such as the IMF and World Bank eschew.

That is the problem facing the West.

As long as we listen to the mainstream economists the longer it will take to make the necessary shifts in industry structure and the more likely will be the overall Chinese dominance in these future technologies and products.

The Chinese government has historically provided “coordinated support across the entire value chain, rather than focusing on manufacturing alone” and “extend far beyond just companies that choose to manufacture in China”.

The government is supporting a transition into the production of ‘Alt protein’ to reinforce the market signals (declining prices) in the traditional fermentation sectors (pharmaceuticals).

The race is now on in China between multiple companies, all with support from the government, to expan the fermentation expertise into Alt protein production.

The blueprint that the Chinese use to create “technological leadership” is as follows:

1. “establish scale and cost competitiveness in mature industries, before expanding into higher-value, adjacent sectors” – for example, “BYD started as a low-cost nickel cadmium battery maker before evolving into the world’s largest EV company three decades later.”

2. Then “deploy their capabilities in higher-value segments”.

3. “To facilitate this transition, Chinese companies are either acquiring or setting up advanced R&D teams” – many existing companies have “flat or declining profits, but their R&D budgets and research teams were growing”.

Why?

Most Western companies do not follow this pattern.

In China, “these companies appear to be building scientific moats based on a combination of high-end science coupled with large-scale, low-cost manufacturing.”

4. Plug “into the domestic manufacturing system” – that is partnerships with existing fermentation companies to produce Alt protein.

China has adopted a very strategic approach in prioritising the production of Alt protein because they see it as central to their overwhelming emphasis on “food security and biotechnology”.

They understand that the extraction of protein from livestock is both inefficient and environmentally damaging, whereas the use of biomass within a CUE is highly efficient and sustainable.

The Chinese have developed a major cost advantage relative to the West in this area of activity.

For example:

A general rule of thumb expressed by Chinese companies … is that the USD value of facility construction in the U.S. will cost roughly the same number in RMB in China—meaning a US$100 million facility in the U.S. will cost RMB100 million in China, equivalent to only ~US$15 million.

Mainstream economists and the capitalists they support see these differences as being the product of ‘unfair’ state support.

If that was so, surely the solution is for the governments elsewhere to also invest and support new industries.

But the mainstream cannot think clearly like that and claim all state support should be curtailed.

Moreover, the evidence is that the cost differences are not the exclusive result of state support.

As the Good Food Institute APAC research shows:

Chinese construction and manufacturing companies are highly experienced at building new fermentation facilities, and they are located close to the building materials supply chain. There is also a strong government culture towards reducing red tape and costs for manufacturers, which spurs innovation, rapid scaling, intense competition, and falling prices. On top of this, there are lower wages, more affordable land, and, of course, subsidies.

Chinese companies get products from conception to market much more quickly than other companies in other nations.

Conclusion

Some of that advantage is certainly due to the lack of protections for workers and lower wages, which means we are not comparing like with like.

But the rapid pace in which China is shifting its long-standing capacity in fermentation into Alt protein production certainly provides the answer to those who cannot conceive a world without the livestock protein industry.

It also poses a threat to us all – in the sense, that we will be dependent on Chinese products in yet another area because of our own reluctance to move beyond neoliberalism and, instead accept that the state has to become a central player (again) in industry development.

The longer we hang on to the neoliberal ideology the greater will be the gulf betweeen Chinese expertise and the products its makes available and the rest of us.

That is enough for today!

(c) Copyright 2026 William Mitchell. All Rights Reserved.