Future of Clean Beauty: How Äio is Brewing a Palm Oil Revolution
- jiaxin chen
- 5 days ago
- 2 min read
Updated: 4 days ago
As the EU prepares to ban deforestation-linked palm oil imports, manufacturers are racing to find sustainable alternatives. Estonian biotech startup Äio has just secured €1M in government funding to accelerate the development of its yeast-derived fats for cosmetics, positioning itself as a key player in the green ingredient revolution.
Turning Industrial Waste into Sustainable Beauty Ingredients
Äio, a spin-off from Tallinn University of Technology, uses a proprietary red yeast strain to convert wood and agricultural byproducts, such as sugars from sawdust, into eco-friendly fats via fermentation. The process mimics beer brewing but yields nutrient-rich lipids that require 97% less land, 90% less water, and are 10 times faster to produce than palm oil.
The startup has already developed three fat products:
Encapsulated Oil (palm oil alternative for food)
Buttery Fat (replacement for animal fats and coconut oil)
RedOil (used in cosmetics, replacing fish and seed oils)
For cosmetics, Äio’s fats offer a dual solution: replacing palm oil and petroleum-based mineral oils, which are linked to environmental harm and skin irritation. Magdalena Koziol, the firm’s head of cosmetics development, notes that fermentation-derived ingredients are now overcoming past performance and cost barriers, making them viable for mass-market and luxury beauty products.
Why the Beauty Industry is Paying Attention
The EU’s Deforestation Regulation, set to enforce strict bans on high-risk palm oil imports, is a major driver for change. Currently, 34% of EU palm oil imports may come from deforested land, and non-compliant companies face fines of up to 4% of their global revenue.
Additionally, tightening PFAS and microplastics regulations are pushing brands toward cleaner formulations. “Sustainability is no longer optional—it’s a necessity driven by consumer demand,” said Koziol to Green Queen Media.
Äio is now sampling its ingredients with cosmetics producers and plans another funding round by late 2026. With €7.2M raised so far, including a recent €1.8M R&D grant, the startup aims to expand internationally.
The Fermentation Race Heats Up
Äio isn’t alone in the quest for palm oil alternatives. Competitors like UK’s PALM-ALT, C16 Biosciences (US), and NoPalm Ingredients (Netherlands) are also leveraging fermentation. But with strong government backing and a scalable process, Äio believes it can lead the shift toward greener cosmetics.
“Our technology can reshape how ingredients are made,” says CEO Nemailla Bonturi. “The question isn’t if the industry will change it’s how fast.”
For beauty brands navigating new regulations, Äio’s solution might just be the sustainable edge they need.
