The development of advanced new materials and technologies for bio-based products is immensely needed as the world is facing an ever-increasing variety of challenges due to increasing public concern about global sustainability. The potential of the available bio-resources in value-added sectors still needs to be maximised and new approaches through the more complete deployment of the twelve principles of Green Chemistry have to be delivered. Bio-based products and technologies should be more atom efficient, achieve higher yields, generate less waste and utilize less energy, hazardous conditions and chemicals. Advanced biocatalysts like heterogeneous phase ion exchange resin provide such solution. Various plant oils have been proposed as a replacement feedstock for bio-based polyurethane production. Unfortunately, most vegetable oils, like rapeseed oil, soybean oil and sunflower oil are considered as first generation renewable materials, because their production has to compete with food production [1]. Tall oil is a by-product of the wood pulping process and it can be considered as cheap raw material for polyol production [2]. This study demonstrates how it is possible to introduce oxirane rings into fatty acids of tall oil and subsequently synthesize polyols with high functionality. Epoxidation of fatty acids as one of the steps for polyol production is done with peracetic acid which is obtained in situ from hydrogen peroxide and acetic acid. A high conversion rate to oxirane – 80% has been reported for fatty acid methyl esters. Before epoxidation of the tall oil, the methyl esters of the fatty acids have to be synthesised, which increases the total costs of polyol production. In this study, neat fatty acids were epoxidized to propose more cost-effective process.