Palm Oil Alternative Market Accelerates
Published 18 February 2025
Although it features in 50% of all packaged goods consumed globally (WWF, 2025), palm oil continues to have a problematic reputation thanks to its links to multiple environmental problems, including deforestation. These sustainability issues, as well as a recent price hike, are prompting buyers to seek alternatives. In response, researchers and start-ups are developing innovative, sustainable solutions.
In 2024, Aberystwyth University in Wales partnered with UK start-up Sun Bear Biofuture to produce an oil by fermenting agriculture side streams like potato peel and bread waste with a high-yield yeast strain.
Dutch biotechnology start-up NoPalm Ingredients employs a similar process and has worked with industry giants Colgate-Palmolive and Unilever to turn its production side streams into oils. In 2024, it raised €5m ($5.2m) in seed funding. Likewise, Estonian start-up Äio raised €6.1m ($6.3m) to scale its production of oils made by fermenting industrial residue like sawdust.
Sun Bear Biofuture
NoPalm Ingredients
 Sun Bear Biofuture |  NoPalm Ingredients |
UK biotech company Clean Food Group has secured £2.5m ($3.1m) with the aim of bringing its yeast-based palm oil substitute to market at commercial scale by 2028. It recently collaborated with British producer Roberts Bakery to make fats from surplus bread.
Meanwhile, Palm-Alt – developed by researchers at Queen Margaret University in Edinburgh, Scotland – is an alternative shortening made from byproducts from linseed, natural fibre and rapeseed oil. The product is said to be 70% better for the environment and contains 80% less saturated fat.
Another approach is to adopt better farming practices. British organic ingredient producer Daabon launched the world’s first carbon-neutral organic palm oil in 2024 by implementing circular economy measures in its mill in northern Colombia. The company limits greenhouse gas emissions by producing its own biogas and composting its plant waste.
Elsewhere, the macaúba oil palm is being considered as an eco-friendlier option. The species is comparable in efficiency (2.5 metric tons of vegetable oil per hectare per year) to those used traditionally, but has greater tolerance to drought. This reduces the need for rainforest clearance as it can withstand less fertile soil and degraded pastureland.
For more on how food production is evolving to meet sustainability challenges, see Food in 2030: Extreme Edibles, or read Look Ahead 2025: Food & Beverage to explore how health and environmental concerns are shaping consumption.