Upcycling sawdust to make alternative oils and fats

Industry is at present rushing to find suitable alternatives to tropical oils and fats as demand shifts away from animal fats. Hard vegetable fats like palm, coconut, shea and cocoa can only be grown in the tropics and bring health and environmental sustainability concerns. Meanwhile, those oils that come from plants grown in milder European climates such as soya, sunflower and canola that can be converted into hard fats involve hydrogenation, which can produce dangerously unhealthy trans fats.

Therefore joining the likes of Sweden’s Green-On​, British start-up Clean Food Group​ and Holland’s NoPalm Ingredients​ in the rush to find solutions is ÄIO, a biotechnology start-up that develops food products from the by-products of the wood and the agricultural industry.

The Estonian company has just raised €1million from investors including Nordic Foodtech VC, the Estonian Business Innovation Agency to replace what it calls the environmentally depleting oils currently used in the food industry with sustainable full-value alternatives.

The company ÄIO, founded in January last year by bioengineers at Tallinn University of Technology, Petri-Jaan Lahtvee and Nemailla Bonturi, produces edible fats and oils from agricultural and wood industry side-streams using results from years of biotech research.

According to the founders, the company uses a tailored fermentation processes to deliver next generation fats and oils rich in healthy fatty acids and antioxidants.

By essentially "brewing" fats and oils by valorising other industries' side streams it can upcycle low-value by-products into lipid rich biomass.

Feedstocks from agri, food and wood industries can be used in process, for example sawdust, lactose and molasses. 

“Our aim is to reduce the use of palm and coconut oil, mineral oils and substitute animal-based lipid products,” they said, adding they have found properties are "nicely suitable" for example in plant based meat replacement products. 

“Compared to livestock farming, plant-based meat also requires 47-99% less arable land, emits 30-90% less greenhouse gases and uses 72-99% less water. But, palm and coconut oils used to make plant-based meat alternatives, do not deliver the same taste and mouthfeel as animal fat. Also, the production of these oils is not sustainable, they are unhealthy and can cause allergic reactions.”

According to Mika Kukkurainen, partner and founder of Nordic Foodtech VC, thee Helsinki-based €42m venture capital fund investing in food technology, the global food industry is constantly looking for new sustainable and healthy alternatives to replace palm oil and coconut oil.

“Turning low-value side-streams into something so valuable is very futureproof and has great scalable business potential,” he said. "We are happy to join ÄIO when taking the first steps outside of university, and already looking forward in helping the team towards future success.”

As the next step, ÄIO plans to increase its production capacity, test products in co-operation with food industry, and apply for novel food permits to enter the European market. By 2026, it is planning to start the production on an industrial scale.

ÄIO’s RedOil can also be used in cosmetic products and household chemicals, replacing lubricants and surfactants derived from petroleum or palm oil.

The entire production process is based on research carried out in Estonia, through which industrial side-streams are transformed into food products through a fermentation process, similar to brewing beer or raising bread with yeast. The fermentation process produces fats rich in healthy fatty acids and antioxidants.

Fermentation uses the “red bug” microbe created and patented by Bonturi, which turns side-streams of agriculture and other industries into tasty and appetizing fats and oils. “In the same way that we make kombucha, yogurt, bread, and beer, we can turn sawdust or other low-value biomass into valuable and healthy ingredients. Our “red bug” cannot turn water into wine, but it can turn sawdust into food,” she explained.