The uk government is backing the construction of the countrys first industrial-scale insect farm as a way to produce more sustainable animal food for big livestock suppliers.

Entocycle, which is building the farm, plans to breed up to 5m black soldier fly larvae as protein for animal food, while the insects excrement, known as frass, will be sold to the horticultural industry as fertiliser.

The government is investing 10m in the project. supermarket group tesco is also backing it by encouraging its fish suppliers to buy insect-based feed from entocycle and planning to supply waste, such as overripe fruit and vegetables and stale bakery goods, as food for the insects.

Insects are everywhere, every corner of your house, garden, doing their work making sure the planet is in good running order, so why not use them for our good, said keiran whitaker, founder of entocycle.

The start-up has already secured $8m in funding from private sources including silicon valleys y combinator, which has also backed airbnb and doordash, and the current chairman of nhs england, david prior. it is looking to secure a further $20m by the end of the year.

The group estimates that insects are 300 times per square metre more efficient in terms of protein output than soya, which is the second-biggest cause of deforestation, according to greenpeace, the climate campaign group.

A report from barclays last year found that the insect protein market could be worth as much as $8bn by 2030 as the global population increased, requiring protein sources with a smaller environmental footprint.

France and the netherlands already have big insect-producing facilities, manufacturing bugs for pet and fish food. approval for insects for feeding other animals such as poultry had been due in the eu this year but has been held up by the pandemic.

Eight types of insect, including black soldier flies, crickets and mealworms, are expected to be sanctioned for human consumption by the end of this year, according to the european food safety authority.

Entocycle said it understood that the uk would follow eu rules on insects as food in the immediate aftermath of brexit.

Hiral patel, an author of the barclays report, said short-term demand for insects as food would be driven by animal feed rather than humans.

Insects were already eaten to some degree by about 2bn people in eastern countries, meaning insect farming had so far been led by asian private companies, the barclays analysts said.

But ms patel added that momentum was beginning to build in the west: the market opportunity does not focus on novelty food for us insect protein is a credible source of alternate protein, so think insect burger rather than flavoured insects in a crisp packet.

However, researchers at swedens university of agricultural sciences have argued that insect farming has yet to prove its sustainability credentials, highlighting what they said was a lack of research into areas such as waste management and the potential for accidental release of insects.

Tesco said it recognised the significant potential of insect protein in making many of our supply chains more environmentally sustainable...[and in helping] to reduce the current reliance of animal agriculture and aquaculture on wild-caught fish and plant proteins such as soya.