ÄIO, an Estonian biotechnology company developing sustainable non-animal fats, has secured a €1.2 million grant from Enterprise Estonia for its new FERM-OIL project. With a total budget of €2.3 million, the initiative aims to validate the industrial-scale production of sustainable, fermentation-based fats derived from local agricultural and forestry side-streams.
Over the next three years, the project will transition ÄIO’s “Flavoured Fat”, a lipid-rich yeast biomass with umami notes, from the lab to verified industrial production. This effort addresses a critical gap in the food industry by providing a scalable, climate-resilient alternative to animal fats and tropical oils that meets strict regulatory standards.
“With FERM-OIL, we are tackling one of the hardest parts of food innovation, the jump from lab to factory,” says Dr Mary-Liis Kütt, Chief Innovation Officer at ÄIO. “We already know that our Flavoured Fat performs beautifully in prototypes, from replacing cocoa powder and brown sugar to adding a silky texture to broths and sauces. This project allows us to validate the process on real industrial lines, generate robust safety data for the novel food dossier, and understand how consumers respond to these new lipid ingredients.”
The team will optimize fermentation processes, validate second-generation feedstocks, and transfer production to a contract manufacturing facility. By the project’s conclusion, ÄIO intends to reach Technology Readiness Level 6 and complete the safety assessments required for a novel food dossier in Europe.
“Fermentation gives us a way to turn side-streams into stable, nutritious, functional lipids that are not dependent on climate, seasons, or fragile global supply chains,” says Nemailla Bonturi, Co-founder and CEO of ÄIO. “This grant is a strong signal that Estonia is serious about building a resilient, circular food system. It allows us to prove to the world that our process can work at an industrial scale, not just in the lab, and that novel lipids can become a reliable pillar of future food security.”
“Estonia and the wider region have a unique opportunity to lead in circular bioeconomy,” says Prof. Petri-Jaan Lahtvee, Co-founder of ÄIO. “With FERM-OIL, we will demonstrate that second-generation feedstocks can be turned into high-value, scalable ingredients. The same facility that today produces commodities can, in the future, also produce next-generation lipids on-site. That is real circularity in action.”
