Glycolysis and the Krebs cycle are often considered the key players in energy and metabolism, as glucose is considered perhaps the most important energy source. However, fatty acids are a bountiful energy source as well. After all, energy from sugars, fats, and proteins is kept at a strict balance in the body – excess energy from one will result in changes in the others. Fatty acids are degraded by beta-oxidation, a stepwise process that takes an activated fatty acid chain bound to coenzyme A (CoA) and ultimately removes two methylene (CH₂) groups, yielding a shorter chain and acetyl-CoA. This reaction is shown below. R_n = chain of of n CH₂ groups, also called an alkane or acyl chain. The acyl molecules are sometimes written as C_n, referring to the number of carbons in the molecule, excluding CoA. For instance, acetyl-CoA is C₂.

Even-chained fatty acids are oxidized this way up until there are two carbons left. Odd-chained fatty acids are oxidized in the same manner, but only to C₃ (propionyl CoA). In either case, each oxidation cycle yields approximately 14 ATP and removes two carbons. 10 ATP are generated by the extra acetyl CoA generated in the reaction and 2 ATP are used in the cost of activation, so for a fatty acid chain of C_n, the net ATP yield is shown below:

Fatty acids are present in the cytosol of cells, but beta-oxidation takes place in the mitochondrial matrix. As a result, a transport system was developed, using a molecule called carnitine as a carrier. The reaction that attaches carnitine onto a fatty acid molecule is called carnitine acyltransferase (CAT). CAT I is on the cytosolic side and it adds the carnitine, allowing the fatty acid to cross the membrane by way of the transporter translocase. CAT II is on the matrix side where the carrier is removed. This is diagrammed below:

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