Denmark’s Cellugy Gets €8M EU Funding for Fossil-Free Skincare Materials

Danish biotech firm Cellugy has secured €8.1M via an EU grant to scale up its bio-based alternative to fossil-based skincare ingredients.

To rid the cosmetics industry of its fossil fuel dependence, Danish startup Cellugy has received an €8.1M boost from the EU’s Life Programme, which funds projects supporting climate action.

It takes the seven-year-old firm’s total raised to €13M, and will help it scale and speed up the production of EcoFlexy Rheo, a biofabricated rheology modifier that replaces fossil fuels with cellulose to offer the personal care industry a fully biodegradable and competitively priced alternative.

“This grant provides the resources we need to transform our vision into reality. Within three to five years, we expect to be generating significant revenue while delivering a measurable environmental impact,” said Isabel Alvarez-Martos, co-founder and CEO of Cellugy.

Why rheology modifiers need an overhaul

Rheology modifiers are a core part of the personal care industry, appearing in everything from skin and oral care to deodorants and colour cosmetics. They’re used for thickening and viscosity, and make cosmetics easy to pour and flow when force is applied.

But, Cellugy explains, nearly 70% of rheology modifiers on the market are derived from petrochemicals. That speaks to a larger issue: 87% of beauty products contain microplastics, the tiny particles that leach into our waterways and hurt more than 630 marine species, pollute our food system, and harm human health.

The presence of petrochemicals means rheology modifiers are classed under the EU’s REACH regulation, which seeks to protect human and planetary health from chemical risks. At the same time, several member states have imposed restrictions on microplastics, while the EU Commission has banned the use of certain types of PFAS (known as forever chemicals).

Combine that with the fact that ‘natural’ is the top purchase motivator for a third of personal care shoppers, and clean beauty is important to 93% of them, and it has put cosmetic manufacturers in a bind.

Alvarez-Martos contended that the industry needs better alternatives that make it easier, not harder, to choose sustainability. “Only when bio-based materials match or exceed the performance and economics of traditional ingredients will we see the transformation needed to protect both human health and our planet,” she explained.

“An alternative material that simply aims to be more sustainable is not enough; the critical challenge is about delivering bio-based solutions that actually outperform petrochemicals in performance parameters like texture, functionality, and user experience, while also being scalable and operationally efficient.”

That’s where EcoFlexy Rheo comes in. The material is made from high-purity, crystalline cellulose, produced by a specific strain of bacteria that bioconverts sugar via fermentation.

According to Cellugy, the ingredient provides “superior product performance and adaptable sensorial properties”, with functionalities that weren’t achievable with existing bio-based ingredients like xanthan or cellulose gum. Further, it eschews the handling challenges associated with plant-nanocellulose alternatives.

Cellugy is working with industry experts to scale up EcoFlexy Rheo

Cellugy has obtained Generally Recognized as Safe (GRAS) status for the ingredient in the US. This enables EcoFlexy Rheo to be used in industries including beauty, food, packaging and hygiene, and as a mechanical strengthener to improve the resistance of composite materials in packaging, textiles, construction, and the automotive sector.

It has already debuted as part of a skincare cream in collaboration with fellow Danish firm Bioli. Now, it’s being scaled up through Cellugy’s Biocare4Life project, for which it secured the EU grant. The initiative aims to prevent the release of 259 tonnes of microplastics annually when completed, rising to 1,289 tonnes by 2034.

That’s the same as removing millions of contaminated beauty products from the market each year, and it’s a crucial campaign considering that the beauty industry could lose around €12B due to the EU’s microplastics ban and the US’s PFAS restrictions.

As part of the Biocare4Life project’s scale-up strategy, Cellugy has teamed up with green consultancy The Footprint Firm and AI-led data management platform Sci2sci.

“Our role is to validate the environmental impact and ensure the best alignment with circular economy principles. The project’s combination of technical innovation and sustainability validation positions EcoFlexy very strongly for market adoption and supports the EU’s broader transition to a more resource-efficient economy,” said The Footprint Firm manager Will Nunn.

Angelina Lesnikova, CEO of Sci2sci, added: “Our role is to optimise every layer of production, from fermentation parameters to supply chain predictability, so that EcoFlexy can compete with petrochemical alternatives not just on environmental benefits, but on cost and performance metrics that matter to manufacturers.”

Aside from scaling up, the EU’s investment will help Cellugy carry out process optimisation and commercial validation over a four-year period. “Our end goal is sweeping petrochemicals from an industry worth billions, and we now have the backing and the partnerships to make it happen,” said Alvarez-Martos.