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CleanTech innovator ÄIO is taking the lead to bring sustainable fats and oils to market

With production using low-value by-products, a centuries-old process, and a mission for sustainable fats and oils, Estonian ÄIO is eager to show what they can do.

Just hearing the word “regulations” can send some businesses running. Cut the investment, forget the idea, do something — anything — else. But the reality remains: if we’re serious about cutting back reliance on unsustainable food production and bringing the circular economy to the food industry, we have to get creative with new solutions. And those solutions get rigorously tested. While that may scare away some from novel food development, there are always people who don’t shy away from doing things the right way — and a new way — despite the challenges they know they’ll face.

Enter ÄIO, Estonian CleanTech founded in 2022, with some serious food tech innovation and sights set on receiving EU’s novel foods approval. The food science-driven team is dedicated to its development progress and has a goal-oriented mindset to replace unsustainable palm oil and animal-based fats with healthy and reliable microbial alternatives.

Endless applications

The world runs on oil and oil-based products. Commonly, animal fats and palm oil are used in foods, food additives, cosmetics, and household chemicals. Their production processes heavily burden our planet, producing high CO2 emissions and affecting habitat loss; meanwhile, palm oil production is also tied to questionable labour practices.

But the world market is hungry for more.

ÄIO is betting that it can help offset the negative environmental impacts by producing fats and oils sustainably. With its unique bioprocess, the company has already introduced three products to substitute unsustainable alternatives:

  • RedOil, an eye-catching alternative for vegetable, fish, and seed oils. The colour isn’t just for show; it’s a mixture of beneficial compounds to serve as active ingredients in cosmetics and household chemical formulas.
  • Encapsulated oil is designed for uses where texture is key. The formula substitutes palm oil, soybean oil, and nutritional yeast, especially in bakery products, sauces, and confectionery goods.
  • Buttery fat is the company’s product to substitute, well, butter-like products. Its texture makes it a replacement for coconut oil, animal fat, and shortenings.

Caramel sauce made with ÄIO’s Encapsulated oil

Each product has a variety of uses and applications. Meanwhile, the oleochemicals market size, valued at $24.42 billion in 2023, is expected to continue growing at 6.9%. This gives  ÄIO an advantageous position. Their products fulfil the high global demand for oils and deliver on a shifting consumer preference for sustainable products and ingredients.

A process as old as time

The market for ÄIO’s products is definitely there (and growing). But how is the company achieving their new-age oils and fats?

Amazingly it’s still a “this is how we’ve always done it” playbook — just from a different industry. To avoid the environmentally detrimental processes of deforestation for grazing animals or planting oil-producing crops, ÄIO turned to the 10,000-year-old process of fermentation. They added a twist and unlocked huge market potential.

At its core, it’s the same process your neighbour is using for home brews, but more sophisticated. ÄIO starts with biomaterials that would otherwise be underutilised in terms of value and turns them into value-rich oils.

“We are working with yeast, so our core process is yeast fermentation. It’s very similar to beer brewing,” explains Mary-Liis Kütt,  ÄIO’s Head of Product Innovation Team. “It’s a big tank. We add the sugars that come from industrial processes side-streams and from the sugars the yeast produces fats and oils and then we extract them.”

They’ve used by-products from the wood and food industries and have been racking up collaborations to produce from a variety of materials. Most recently, the company announced a pilot project with Finland’s largest milk processor and food exporter, Valio. In collaboration with VTT Technical Research Centre of Finland, the companies will test  ÄIO’s processes with dairy industry side streams to produce fats and oils for use in Valio’s plant-based meat alternatives.


This circular economy approach is central to how the company envisions its growth. By utilising low-value inputs to create high-value microbial lipids the company can continue investing in fine-tuning processes. Because the next step is scaling production. Currently, the company runs batch productions at a partner facility. But on the horizon for the spring of 2024 is an in-house pilot line to set up a consistent production at a 300-litre scale. Being able to scale its production won’t only help deliver sustainable products to positively impact the world’s environment. It’s pivotal to ÄIO’s next goals — approval under novel food regulations and advancement with other product applications.

Getting the green light

With a process that’s been tested for what we could consider as forever and biological input materials, ÄIO is aiming high — food grade products.

“When you valorise something to be fit for human consumption, that’s the highest value you can give it,” Killu Leet, ÄIO’s Regulation and IP Team Lead points out. “We also see that we can make the most positive impact in terms of substituting palm oil for which production is very unsustainable. And to provide a plant-based or vegan alternative to animal fats through fermentation.”

That’s why, despite its many product applications, ÄIO is going all-in on food-grade approvals. Aiming high is an understatement, but the team is zeroed in on getting everything ready to face the maze ahead.

“[Together with Gelatex] we are the first pioneers from Estonia who will be going after the Novel Food permit,” says Leet. “Consequently, there is a lack of comprehension and enough expertise [in Estonia] to navigate through this process.”

Determined to reach their goals and navigate regulatory assessments, the company is part of an Accelerate Estonia program to help create a roadmap for future Estonian novel food companies.

Picking up an aura of confidence? It’s likely because  ÄIO has been thinking long-term, focusing on the quality and safety of their products from the start. Their mission for a better world with more sustainable products aligns with the overarching requirement to ensure people consume safe products. It’s a matter of presenting their processes and products and effectively collaborating on additional requirements as they come up from the various regulation authorities around the globe.

If anything, ÄIO is looking for ways to deliver safety, quality, and innovation in improving their products. Their willingness to run collaborative projects, test a variety of input materials, and evaluate the resulting outputs reflects their dedication to creating the best version of their sustainable products. With their roadmap for production scaling and regulatory approvals in place,  ÄIO is in it to win it — fully understanding that their sustainable fats and oils empire won’t be built in a day.

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