Estonian biotech company ÄIO has completed the first full-scale production run of its yeast-based encapsulated oil product, reaching a volume of one tonne. This represents a 300-fold increase from the company’s laboratory capabilities.
ÄIO uses biomass and precision fermentation to turn industrial side streams into non-animal fats and non-vegetable oils. The company’s encapsulated oil is said to be high in proteins, fibres, and functional lipids; it provides an environmentally friendly alternative to palm oil, coconut oil, eggs, and even cocoa powder. The ingredient reportedly has an umami taste and a versatile texture profile, making it suitable for applications ranging from meat-free patties to confectionery.
The oil can also be used for cosmetics applications, providing a natural alternative to petroleum-derived mineral oils. It is said to have nourishing properties and additional bioactive benefits.
“This is not just a production milestone, it’s a validation of a dream,” said Nemailla Bonturi, ÄIO’s CEO and co-founder. “As a scientist, I’ve been developing this fermentation process since 2013. Seeing something that I started in a small lab in Brazil now being produced at this scale in Europe is incredibly rewarding. This first tonne is the first of many to come, and crucially, it proves our process can scale beyond pilot settings and validates the commercial potential we’re working toward.”
“The fundamental economics have shifted”
The production run was completed between late 2024 and mid-2025. ÄIO now plans to establish a commercial production facility capable of producing 2,000 tonnes of oil annually. The company has already completed pre-engineering concept work for the facility, and is developing partnerships with companies involving feedstock supply, distribution, and off-take agreements.
ÄIO has also begun sharing product samples with manufacturers in the food and personal care industries, and has seen interest from producers aiming to reduce their environmental footprint while maintaining product performance. The company intends to launch a new fundraising round by late 2026 to accelerate its expansion.
The news comes after ÄIO was awarded €1 million in government-backed funding to develop and scale up oils for use in cosmetics and chemical applications.
“The fundamental economics have shifted,” said Bonturi. “Five years ago, sustainable alternatives carried a significant price premium. Today, supply chain disruptions and regulatory pressures have created conditions where precision fermentation can achieve cost parity with conventional oils while eliminating environmental and ethical concerns. For manufacturers, ecologically conscious ingredients are no longer a ‘nice-to-have’, they’re a necessity.”
