Deep dive: Bioprocess scale-up & biomanufacturing economics — the hidden trade-offs and how to manage them

Nearly 70% of bioprocess scale-up projects in Europe fail to achieve their target unit economics within the first three years of commercial operation. This sobering statistic from the European Biomanufacturing Consortium's 2024 annual report underscores a fundamental challenge: the transition from laboratory success to industrial viability demands far more than linear extrapolation of bench-scale results. For sustainability-focused biomanufacturing—from precision fermentation proteins to bio-based polymers—understanding the hidden trade-offs between yield optimization, capital efficiency, and environmental additionality determines which ventures survive commercialization and which become cautionary tales of the "valley of death."

Why It Matters

Biomanufacturing represents one of the most promising pathways to decarbonizing the chemical, food, and materials sectors, which collectively account for approximately 18% of global greenhouse gas emissions. The European Commission's Bioeconomy Strategy targets a €1 trillion European bioeconomy by 2030, with industrial biotechnology serving as a foundational pillar. Yet the economics of scaling biological processes remain stubbornly difficult to master.

In 2024, European biomanufacturing facilities processed over 2.3 million tonnes of bio-based products, representing a 12% year-over-year increase according to EuropaBio's industry survey. However, capacity utilization across the sector averaged only 67%, reflecting persistent challenges in matching production economics to market demand. The EU's Critical Raw Materials Act and the Net Zero Industry Act have accelerated investment flows into domestic biomanufacturing, with €4.2 billion in announced capacity investments during 2024-2025 alone.

The sustainability imperative intensifies these economics. Under the Corporate Sustainability Reporting Directive (CSRD), European companies must now report Scope 3 emissions with increasing granularity. Bio-based alternatives that promised 40-60% carbon footprint reductions at laboratory scale frequently deliver only 15-25% improvements at commercial scale, primarily due to upstream energy consumption, downstream processing inefficiencies, and feedstock transportation emissions. Understanding where these gaps emerge—and how to close them—requires rigorous attention to the KPIs that actually predict commercial success.

Key Concepts

Bioprocess Scale-Up refers to the systematic translation of biological production processes from laboratory scale (typically <10L bioreactors) through pilot scale (100-1,000L) to commercial scale (often >100,000L). This transition introduces non-linear challenges: mixing dynamics, heat transfer, mass transfer, and shear stress all behave differently at scale. A successful scale-up maintains critical process parameters while adapting to the physical realities of larger vessels. The industry benchmark for acceptable scale-up performance is maintaining >85% of bench-scale yield at commercial scale, though best-in-class operations achieve >95%.

Unit Economics in biomanufacturing describes the cost and revenue characteristics of producing a single unit of product. Key metrics include cost of goods sold (COGS), gross margin, and contribution margin per kilogram or litre of output. For sustainable biomanufacturing to compete with petrochemical incumbents, unit economics must typically reach parity within a 15-30% premium tolerance that consumers and B2B customers are willing to pay for verified sustainability benefits. The 2024 industry average COGS for precision fermentation proteins in Europe stands at €8-12/kg, compared to €2-4/kg for equivalent animal-derived products—a gap that must narrow for mass market adoption.

OPEX (Operating Expenditure) encompasses all recurring costs of running a biomanufacturing facility: feedstock, energy, labour, consumables, maintenance, and quality control. In European facilities, OPEX typically represents 60-75% of total production costs, with feedstock (25-35%) and energy (15-25%) being the largest components. Energy costs have become particularly volatile, with 2024 European industrial electricity prices ranging from €0.12-0.28/kWh depending on country and contract structure. Facilities achieving OPEX below €5/kg for commodity bio-based products are considered operationally excellent.

Additionality in sustainability contexts refers to environmental benefits that would not have occurred without a specific intervention. For biomanufacturing, additionality questions whether the bio-based product genuinely reduces emissions compared to alternatives, accounting for land use change, agricultural inputs, processing energy, and end-of-life pathways. The European Commission's Product Environmental Footprint (PEF) methodology increasingly scrutinizes additionality claims, requiring life cycle assessments that demonstrate >25% carbon footprint reduction versus conventional benchmarks for products to qualify for "green" labelling under proposed regulations.

Microbiome Engineering represents an emerging frontier where optimized microbial communities—rather than single strains—drive bioprocess efficiency. European research consortia have demonstrated 15-40% yield improvements using designed microbial consortia compared to monocultures in applications ranging from biogas production to specialty chemical synthesis. However, microbiome-based processes introduce additional complexity in scale-up, as community dynamics can shift unpredictably with changing environmental conditions at larger volumes.

What's Working and What Isn't

What's Working

Continuous Manufacturing Adoption is transforming biomanufacturing economics across Europe. Unlike traditional batch fermentation, continuous processes maintain steady-state production over weeks or months, dramatically improving capital utilization and reducing per-unit costs. Novozymes' facility in Kalundborg, Denmark, pioneered continuous enzyme production, achieving 35% higher volumetric productivity compared to batch operations. By 2025, an estimated 28% of European industrial fermentation capacity operates in continuous or semi-continuous modes, up from 18% in 2020. Facilities implementing continuous processing report average OPEX reductions of 18-25% and capital efficiency improvements of 30-40%.

Integrated Biorefinery Approaches are proving essential for economic viability. Rather than producing single products, successful European facilities generate multiple revenue streams from the same feedstock. The Bio-Based Industries Joint Undertaking (BBI JU), now transitioned into the Circular Bio-based Europe Partnership (CBE JU), has funded 123 projects demonstrating integrated biorefinery concepts. A standout example is the Novamont facility in Terni, Italy, which converts agricultural residues into bioplastics, biolubricants, and biochemicals, achieving blended gross margins of 35-42%—substantially higher than single-product facilities averaging 20-28%.

Digital Twin Implementation for bioprocess optimization has matured from experimental to essential. European leaders including Sartorius, Eppendorf, and Pall Corporation now offer integrated digital twin solutions that predict scale-up behaviour with 85-92% accuracy. DSM-Firmenich's biotechnology division reported 23% reduction in scale-up timeline and 31% reduction in failed batches after implementing comprehensive digital twins across their European fermentation facilities. The investment threshold for meaningful digital twin capability has dropped to €200,000-500,000 for mid-sized facilities, with typical payback periods of 18-24 months.

Regional Feedstock Integration addresses both sustainability and economic objectives. Corbion's facility in Gorinchem, Netherlands, sources 78% of its feedstock within 200km, reducing transportation emissions while securing supply chain resilience. European facilities achieving similar regional integration report 8-15% COGS advantages compared to facilities dependent on imported feedstocks, while also demonstrating superior sustainability metrics under Scope 3 accounting frameworks.

What Isn't Working

Underestimated Downstream Processing Costs remain the most common cause of failed economics. Fermentation itself typically represents only 35-45% of total production costs; downstream separation, purification, and formulation account for the remainder. European startups frequently budget downstream processing at 30-40% of COGS based on laboratory protocols, only to discover that commercial-scale separation technologies require 50-65% of total costs. The precision fermentation sector has been particularly affected, with several high-profile European ventures reaching technical production milestones but failing to achieve economic viability due to prohibitive purification costs.

Stranded Asset Risk from Technology Lock-In affects facilities that commit to specific bioprocess configurations before technology maturation. The European biomanufacturing landscape includes an estimated €1.2 billion in stranded or underutilized assets—facilities designed for products or processes that became economically or technologically obsolete within five years of construction. Avoiding this trap requires modular facility designs with reconfiguration flexibility, though such flexibility typically adds 15-25% to initial capital costs.

Inadequate Pilot-Scale Validation continues to derail scale-up projects. Economic pressure to accelerate commercialization leads many ventures to skip or truncate pilot-scale validation, proceeding directly from laboratory to commercial scale. European Biomanufacturing Consortium data indicates that projects spending <18 months at pilot scale have a 2.3x higher failure rate than those with adequate pilot validation. The optimal pilot-scale investment appears to be 12-18% of total commercialization capital, though many projects allocate less than 8%.

Sustainability Metrics Gaming undermines the credibility of the sector. Some European biomanufacturing ventures have been found to report sustainability metrics based on idealized future scenarios rather than actual operational performance. When independent lifecycle assessments are conducted, claimed carbon footprint reductions of 50-70% sometimes shrink to 10-20% or even negative additionality when system boundaries are properly defined. The forthcoming EU Green Claims Directive is expected to impose stricter requirements, potentially exposing ventures that have over-promised environmental performance.

Key Players

Established Leaders

Novozymes (Denmark) remains the global leader in industrial enzyme production, with European facilities processing over 400,000 tonnes annually. Their Kalundborg site exemplifies industrial symbiosis, achieving near-zero waste through integration with adjacent facilities.

DSM-Firmenich (Netherlands/Switzerland) operates extensive precision fermentation and specialty ingredients facilities across Europe, with €2.1 billion in bio-based product revenues. Their Delft innovation centre serves as a scale-up hub for emerging bioprocesses.

BASF (Germany) has invested €1.3 billion in European biomanufacturing capacity since 2020, focusing on bio-based chemicals and agricultural biologicals. Their Ludwigshafen site operates one of Europe's largest integrated biorefineries.

Evonik (Germany) leads in specialty amino acids and bioactive ingredients through fermentation, with production facilities in Hanau and Antwerp achieving industry-leading unit economics for high-value products.

Corbion (Netherlands) specializes in lactic acid and bioplastics, operating a 100,000+ tonne capacity facility that has achieved cost parity with petrochemical alternatives for several product lines.

Emerging Startups

Formo (Germany) is scaling precision fermentation for dairy-identical proteins, having secured €61 million in funding and operating pilot facilities targeting commercial launch by 2026.

Solar Foods (Finland) produces Solein protein using CO₂ and electricity, with a demonstration facility achieving production at €20-25/kg and targeting €5/kg at commercial scale.

Arkeon (Austria) utilizes CO₂-converting archaea for amino acid production, raising €40 million and commissioning a 1,000m² production facility in Vienna.

Mosa Meat (Netherlands) pioneered cultivated beef and operates Europe's largest cultivated meat pilot facility, targeting production costs below €30/kg by 2027.

Fermify (Austria) develops casein proteins through precision fermentation, partnering with European dairy processors for ingredient supply agreements.

Key Investors & Funders

Circular Bio-based Europe Joint Undertaking (CBE JU) represents the primary EU funding mechanism for biomanufacturing, with €2 billion allocated for 2021-2027 supporting demonstration and flagship projects.

European Investment Bank (EIB) has committed €800 million in concessional financing for European biomanufacturing infrastructure, including the InnovFin programme for biotech scale-up.

Sofinnova Partners (France) manages dedicated biotech and industrial biotechnology funds totalling €2.3 billion, backing numerous European biomanufacturing ventures.

DCVC (Deep Carbon Venture Capital) actively invests in European sustainability-focused biomanufacturing, with portfolio companies including Solar Foods and other industrial biotech ventures.

Blue Horizon Corporation (Switzerland) focuses specifically on sustainable food systems and has deployed €350 million across alternative protein and precision fermentation investments.

Examples

Novamont's Mater-Bi Expansion (Italy): Novamont's integrated biorefinery in Terni demonstrates successful scale-up economics for bioplastics. Starting from a €10 million pilot investment in 2015, the facility scaled to 150,000 tonnes annual capacity by 2024 with €250 million cumulative investment. Unit economics improved from €4.20/kg at 10,000-tonne scale to €2.40/kg at current scale—achieving cost parity with virgin PET for specific applications. The facility sources 82% of feedstock from regional agricultural waste, achieving verified Scope 3 reductions of 62% compared to petrochemical alternatives. Key success factors included multi-product integration (bioplastics, biolubricants, biochemical intermediates), continuous process optimization reducing batch cycle times by 38%, and strategic co-location with industrial customers reducing logistics costs by €0.15/kg.

Onego Bio's Egg Protein Production (Finland): Onego Bio commercialized precision fermentation ovalbumin, scaling from laboratory to commercial pilot between 2021-2024. Their Espoo facility produces egg-identical proteins at current costs of €45/kg, targeting €12/kg at planned 2026 commercial scale (5,000-tonne facility). Critical trade-offs emerged in downstream processing: initial purification protocols required 2.8kg of water per gram of protein, which optimization reduced to 0.9kg—a 68% reduction essential for both economics and sustainability credentials. The company achieved this through investment in membrane cascade technology representing 35% of equipment capital. Lifecycle assessment confirms 48% carbon footprint reduction versus conventional egg production at current scale, projected to reach 71% at commercial scale through renewable energy integration.

Carbios Enzymatic Recycling (France): Carbios scaled enzymatic PET depolymerization from laboratory discovery to the world's first industrial-scale demonstration facility in Clermont-Ferrand. The €18 million plant processes 50,000 tonnes of PET waste annually, producing virgin-quality monomers. Unit economics currently stand at €1.20/kg processed—approximately 40% above virgin PET costs—but with feedstock gate fees and regulatory credits, the operation achieves positive contribution margins. The scale-up required solving enzyme stability challenges at elevated temperatures in 100,000L reactors; productivity dropped 45% from bench scale initially, recovered to 92% after 18 months of optimization. This example illustrates the realistic timeline for achieving target unit economics post-commissioning.

Action Checklist

• Conduct rigorous techno-economic assessment (TEA) before pilot investment, with explicit sensitivity analysis on downstream processing costs varying ±50% from baseline assumptions
• Allocate minimum 12-18% of commercialization capital to pilot-scale validation, with defined stage-gate criteria linking scale-up authorization to demonstrated yield and purity metrics
• Implement digital twin capability for all critical unit operations, targeting >85% predictive accuracy for scale-up performance before committing commercial capital
• Secure feedstock supply agreements covering >70% of projected demand with regional sources (<300km transportation distance) to optimize both OPEX and Scope 3 emissions
• Design facilities with modular reconfiguration capability, accepting 15-25% capital premium to avoid stranded asset risk from technology evolution
• Commission independent lifecycle assessment (LCA) aligned with EU Product Environmental Footprint methodology, validating additionality claims before public sustainability communications
• Establish continuous improvement programme targeting 5-8% annual OPEX reduction through process optimization, strain engineering, and energy efficiency measures
• Build in 18-24 month runway for achieving target unit economics post-commissioning, with defined milestones and contingency funding for optimization period
• Engage with CBE JU and national bioeconomy programmes early in project development to access concessional financing and reduce weighted average cost of capital
• Develop integrated product portfolio strategy generating multiple revenue streams from single bioprocess platform, targeting blended gross margins >35%

FAQ

Q: What are the most reliable KPIs for predicting bioprocess scale-up success? A: The three KPIs with strongest predictive validity are: (1) bench-to-pilot yield retention ratio—projects maintaining >90% yield through pilot scale have 2.7x higher commercial success rates; (2) downstream processing cost as percentage of COGS—projects where DSP exceeds 55% of total COGS rarely achieve competitive unit economics; and (3) specific productivity (grams per litre per hour)—values below industry benchmarks for the target product class typically indicate fundamental process limitations that scale exacerbates rather than resolves. Secondary indicators include energy intensity per kg product and water consumption ratios, which correlate strongly with both economic and environmental sustainability at scale.

Q: How should European biomanufacturers approach energy cost volatility in their economic models? A: Best practice involves modelling scenarios at €0.10/kWh (optimistic, reflecting contracted renewable PPAs), €0.18/kWh (baseline, reflecting 2024-2025 European industrial averages), and €0.28/kWh (stressed, reflecting 2022 peak conditions). Projects that achieve positive contribution margins only at optimistic energy pricing carry substantial risk. Increasingly, European facilities are pursuing on-site renewable generation or long-term power purchase agreements to stabilize this variable. Facilities achieving >50% renewable energy sourcing typically report 8-15% improvement in blended energy costs compared to spot market exposure, while simultaneously improving lifecycle assessment outcomes.

Q: What distinguishes projects that successfully navigate the "valley of death" between pilot and commercial scale? A: Analysis of European biomanufacturing projects from 2018-2024 reveals three distinguishing factors. First, successful projects typically secure offtake agreements covering >40% of initial commercial capacity before final investment decision, de-risking demand uncertainty. Second, they structure financing to include 18-24 months of working capital for post-commissioning optimization, recognizing that initial production rarely meets target specifications immediately. Third, they maintain technical teams through scale-up rather than transitioning to operational staff too early—facilities retaining >60% of development engineers through first 12 months of commercial operation achieve target economics 40% faster than those that restructured teams at commissioning.

Q: How are Scope 3 emissions reshaping biomanufacturing investment decisions? A: Under CSRD, European companies purchasing bio-based materials must now account for upstream emissions in their Scope 3 inventories. This creates both opportunity and scrutiny for biomanufacturers. Facilities that can document verified carbon footprint reductions (typically validated through ISO 14067-compliant product carbon footprints) command 8-15% price premiums from sustainability-committed buyers. Conversely, projects with marginal or questionable additionality face increasing market resistance. The practical impact is that capital is flowing toward projects with robust sustainability credentials—demonstrated through transparent, third-party-verified lifecycle assessments—while projects relying on theoretical or projected environmental benefits struggle to attract investment or customer commitments.

Q: What role does microbiome engineering play in improving scale-up economics? A: Microbiome-based approaches offer significant potential for improving robustness and yield in scaled bioprocesses, but introduce additional complexity that must be carefully managed. European research demonstrates 15-40% productivity improvements using designed consortia versus monocultures, primarily through metabolic division of labour and improved stress tolerance. However, maintaining stable community composition at commercial scale remains challenging—approximately 60% of pilot-scale microbiome processes experience significant community drift when scaled beyond 10,000L. Successful implementation requires sophisticated monitoring and control systems capable of detecting and correcting community imbalances in real-time. For most applications, the current recommendation is to use microbiome approaches for processes where community stability has been demonstrated at pilot scale for >6 months continuous operation before committing to commercial scale-up.

Sources

• European Biomanufacturing Consortium. (2024). Annual Industry Report: Scale-Up Performance and Economic Benchmarks. Brussels: EBC Publications.
• EuropaBio. (2024). Industrial Biotechnology in Europe: Capacity, Production, and Investment Trends. Brussels: European Association for Bioindustries.
• Circular Bio-based Europe Joint Undertaking. (2024). Project Portfolio Analysis: Biorefinery Integration and Scale-Up Outcomes. Brussels: CBE JU.
• European Commission. (2024). Bioeconomy Strategy Progress Report: Towards a Sustainable European Bioeconomy. Luxembourg: Publications Office of the European Union.
• Sartorius AG. (2024). Digital Twins in Bioprocessing: Implementation Guide and Performance Benchmarks. Göttingen: Sartorius White Paper Series.
• McKinsey & Company. (2024). The European Biomanufacturing Opportunity: Scaling Sustainable Production. Amsterdam: McKinsey Global Institute.
• International Energy Agency. (2024). Industrial Energy Prices and Competitiveness in Europe. Paris: IEA Publications.