If having fungus inside your home's walls sounds like a bad thing, the judges of the 2008 PICNIC Green Challenge would disagree. In October, Eben Bayer, a 23-year-old from Troy, New York, won 500,000 euros in the second annual Dutch-sponsored competition for the best solution to reducing greenhouse gases, with his plan for a renewable, biodegradable insulation material made partially from the root structure of mushrooms, or mycelium.

Bayer, who grew up on a Vermont farm and used to hunt mushrooms with his father, co-founded Ecovative Design with Gavin McIntyre in 2007, shortly after they graduated from Rensselaer Polytechnic Institute. The pair hit upon their idea during a class called Inventors Studio. According to their Web site, they "were fascinated by mushrooms growing on wood chips, and observing how the fungal mycelium strongly bonded the wood chips together. This inspired them to think of new ways of using mycelium as a resin."

The compound they developed, called Greensulate, uses mycelium to bind natural insulating materials such as rice hulls or cotton husks—whatever agricultural byproducts are available in the area where the material will be made. The end result is all-natural and non-toxic (assuming they use non-poisonous mushroom species, that is), and because the mycelium is simply grown indoors in a dark place and the composite can be made anywhere using local materials, it requires far less energy to create than most insulation material. It will eventually biodegrade, but should last the lifetime of the home, they claim.

They say the insulation has tested well for R-value and fire retardancy, and will be cost-competitive with traditional foams.

In January, Ecovative Design was awarded an Environmental Protection Agency grant to develop and test the product further. They are also looking at other uses for the composite, including as packing material and anywhere else polystyrene is presently used. They recently partnered with Patagonia to develop a green surfboard core.*

You can watch Bayer's winning PICNIC Challenge presentation here.

Have your own green innovation? The 2009 PICNIC Green Challenge deadline is July 31.

*Eben Bayer pointed out that, although Ecovative Design had planned to use Greensulate for surfboard cores, its present formulation wasn't the right texture for that application. They continue to develop new products, including Acorn, an organic packaging composite.