The Magical Mushroom Company (MMC) is a UK-based SME in the sustainability industry focused on developing a truly alternative packaging solution that can reduce the use of expanded-polystyrene (EPS)-based packaging foams, solving key Innovate UK actions around clean manufacturing technologies and green materials. MMC produces Mushroom Packaging (MP) by combining mycelium with agricultural waste to grow protective packaging and provide an alternative to hard-to-recycle expanded polystyrene (EPS) and other fossil-fuel protective foams. The purpose of this project is to open Europe's largest, and the UK's first, inoculation plant, which will process mycelium with feedstocks sourced from agricultural waste. Inoculation, which injects mycelium into the feedstock, is critical to creating packaging equivalent to the strength and performance of EPS. The company's Esher/Attenborough packaging plants currently supply medium volumes of MP to customers and remove the equivalent of 800 tonnes of unrecycled EPS annually. Plastic packaging taxes are creating demand for more environmentally friendly packaging solutions. MMC is heavily reliant on imports because the substrate it uses in MP production is sourced from the Netherlands ( there is no UK source), which has a negative carbon impact, and is counter to MMC's journey toward net-zero. It can also be damaged in transit leading to significantly higher costs and lower margins. Mycelium grows well on hemp shiv, which is a reliable feedstock and waste from the UK hemp industry. It is also lightweight for packaging applications. MMC needs to take control of its raw materials supply to further offer a more carbon-efficient and viable packaging solution in order to impact the EPS market and to further innovate production efficiencies. The opening of a 10K square-foot UK inoculation plant will allow MMC to process UK-sourced agricultural waste, which will produce 3.8M kilos of raw materials, supplying MMC's two UK packaging plants. Part of the funding will be used to purchase a biomass boiler, which will be used in the essential process of pasteurising the feedstock before inoculation. These boilers use agricultural and forest waste to produce steam, which has less effect on the environment than fossil fuels. While slightly less efficient by around 10% compared to oil burners, the average cost to run biomass boilers using wood pellets is around £5.2/kWh of usage, which is much cheaper than oil at £7.3/kWh. MMC can also deploy spent MP as biomass fuel, demonstrating circularity and steps toward net-zero.