Biotechnology start-up ÄIO has teamed up with wood processing company Fibenol to produce high-value microbial oils.

The partnership pairs Fibenol, which converts wood residues into lignin and two types of sugar, with ÄIO, a start-up with a focus on developing alternatives to animal fats and palm oil.

As part of the collaboration, Fibenol said its wood sugars would be converted into oils and fatty acids for the food, feed and cosmetic ingredients sectors using ÄIO’s technology.

Traditionally, C6 sugars – such as glucose – had been consumed by most microbes, while hemicellulose-derived C5 sugars – such as xylose – could be challenging to use, Fibenol said.

However, by using ÄIO’s technology, Fibenol said it could now convert its C5 sugars into high-value nutrient-rich foods, while these converted sugars also offered alternative ingredients for the oleochemical industry.

“We anticipate a growing range of applications for cellulosic sugars in the food industry in the future,” Fibenol project manager Karl Peebo said on 18 May.

Following successful laboratory-scale production and initial trials, Estonia-based ÄIO had looked to work in collaboration with other companies to upscale the process, Fibenol said.

ÄIO co-founder Petri-Jaan Lahtvee said the pilot-scale collaboration with Fibenol would demonstrate the company’s biotech process could operate under industry-like conditions.

“We are now poised to advance the accessibility of alternative fats and oils for the food and cosmetics industries,” Lahtvee added.

Estonia-based Fibenol uses technology to produce raw materials such as lignin, wood sugars and speciality cellulose from wood residues to be used as alternatives to fossil-based chemicals in the production of cosmetics, construction materials, fermentation and other products.

Established last year, ÄIO’s range of alternatives to animal fats and palm oil include its Buttery Fat product, which has been designed as an alternative to butter and coconut fat.