Palm oil alternatives: Who’s winning the race? Summary
- Fermentation‑derived oils are emerging as the strongest palm replacement contenders
- Clean Food Group rapidly scales microbial oil production with major 2026 ambitions
- No Palm Ingredients builds demo facility to expand yeast‑based fat capacity
- Äio advances fermentation fats using wood by‑products for multiple applications
- Plant‑based and CO₂‑derived fats show promise but remain earlier in development
A lack of credible alternatives may have left commitments by European food brands and retailers to eradicate palm oil few and far between.
Instead, focus has largely shifted to sustainable sourcing – driven in no small part by the looming enforcement of the EUDR.
But still dogged by disruption, regulatory challenge and lingering consumer wariness – a 2023 study found that German consumers, for example, are far more comfortable with ‘free from’ palm oil claims versus ‘sustainably produced’ – appetites for viable alternatives to the controversial fat continue to bubble beneath the surface, with plenty of progress quietly made by researchers in the last 12 months.
So, which palm replacement looks set to cross the commercial finish line first?
Fermented frontrunners
The frontrunners look set to be one of a raft of yeast-based alternatives in development, with many ticking off major milestones in 2025.
UK-based food tech firm Clean Food Group, for instance, say its acquisition of an R&D facility in Liverpool in September puts it in a prime spot to scale up production of its bio-equivalent cultivated palm alternative in 2026.
Made using lab-grown yeast, its substitute is equivalent to palm in both nutritional and fatty acid make-up, as well as being neutral in taste and colour, and – following its acquisition of the 12-acre site in Knowsley, it now has access to one million litres of fermentation capacity for the product.
“With this acquisition, CFG is now uniquely positioned to produce microbial oils at commercial scale, significantly reducing the capex required to supply sustainable oils and fats at competitive price points to agricultural equivalents across food, cosmetics and pet food markets,” says a spokeswoman for Clean Food Group.
One week prior to the deal, the firm also received approval for its CLEAN Oil 25, a fermentation-derived cosmetic oil developed alongside THG LABS and Croda, in Europe, the UK and the US.
And it’s far from the only firm focused on fermentation making strides.
Also in September, Dutch start-up No Palm Ingredients, confirmed it was teaming up with research organisation NIZO Food Research to establish a demo facility for its own yeast-based palm oil alternative at NIZO’s food innovation campus in Ede in the Netherlands.
The firm creates microbial fats and oils by crushing side streams such as potato peels, rejected vegetables and any other biomass that contains sugar, organic acids or alcohol to ferment with a wild yeast strain.
It currently operates a pilot line with a 400-litre fermenter but when production at its demo site kicks off in H2 2026, that capacity is set to increase from hundreds of tonnes to 1,200t/year over time, said its No Palm COO Jeroen Blansjaar. “This is the crucial step that paves the way for our first commercial factory, which we aim to build together with a side stream partner at their site,” he added.
And Estonian start-up Äio isn’t far behind. The Tallinn-based biotech firm, which uses yeast to turn by-products from the wood and agricultural industries, like sugars extracted from sawdust, into fats via fermentation, successfully completed a one-tonne production cycle of its palm alternative earlier this year – a 300-fold increase from its lab capacity.
Though the company has said it’s targeting cosmetics applications to start with, it says its Encapsulated Oil will eventually be used in plant-based patties, baked goods and confectionery products
Other fats gaining pace
While fermented alternatives to tropical fats made significant headway in the last 12 months though, they aren’t the only contender in the race to compete with palm oil.
Though a little further from commercial scale-up, other alternatives have also gained ground in 2025.
In October, for example, Palm-Alt, a plant-based alternative to palm created by food researchers at Queen Margaret University (QMU) in Edinburgh, received a cash injection from the Scottish government to accelerate its development.
The substitute is made using a plant-based blend of rapeseed oil, fibres, and proteins, and has been positioned as a healthier alternative to palm-based shortening in bakery products, containing up to 25% less fat and 89% less saturated fat.
Following initial trials in 2023, its developers have moved from the lab to an industrial setting at Opportunity Northeast SeedPod, a food and drink innovation hub in Aberdeen. Several UK food manufacturers are now said to have entered licencing discussions with Edinburgh Innovations, the QMU commercialisation arm managing the Palm-Alt patent, while £239k from the Scottish government’s Proof of Concept Fund will be put toward further development and range extensions.
“After seven years of research and development it is exciting to see the level of interest and enthusiasm from the food industry and our current partners,” said Catriona Liddle, head of the Scottish Centre for Food Development and Innovation at QMU.
Also after many years of research, Swiss-based Mibelle Group unveiled its own progress in creating a palm oil alternative in September. This time using carbon dioxide.
Working with LanzaTech and the Fraunhofer Institute for Interfacial Engineering and Biotechnology IGB, the food and cosmetics manufacturer said it had developed a CO2-based ingredient that could replace palm oil in cosmetics and other everyday products.
Two successive fermentation processes are used to convert the greenhouse gas into a palm oil-free fat blend – first, by ‘brewing’ C02 into alcohol, and second, turning this into specialised fats using specialised oil yeasts.
“Following successful research in the laboratory, we have now been able to start developing the pilot process,” said Susanne Heldmaier, head of research and technical innovation at the Mibelle Group. “This is an important next step, at the end of which we will have the first quantities of a high-quality fat. This will enable us to develop cosmetic products that not only protect our skin but also contribute to protecting the environment.
“In the future, with the support of our raw material suppliers, we hope to be able to convert more and more palm oil-based raw materials to this sustainable solution.”
As, it seems, do plenty of its competition in the race to reduce international reliance on palm.
