Explainer: Precision fermentation & biomanufacturing — a practical primer for teams that need to ship

The global precision fermentation market reached €3.2 billion in 2024, with the European Union capturing approximately 28% of that value—yet fewer than 15% of EU-based precision fermentation startups have established robust, third-party-verified life cycle assessment (LCA) protocols. This gap between commercial momentum and measurement rigor represents one of the most significant risks facing teams building in this space. For investors conducting due diligence and operators navigating the EU's evolving regulatory landscape under the Novel Food Regulation and the Corporate Sustainability Reporting Directive (CSRD), understanding how to distinguish genuine sustainability impact from measurement theater is no longer optional—it is foundational to building credible, scalable ventures.

Why It Matters

Precision fermentation stands at the intersection of food system transformation, industrial biotechnology, and climate mitigation. The technology enables production of animal-identical proteins, fats, and specialty ingredients without conventional livestock agriculture, which currently accounts for 14.5% of global greenhouse gas emissions according to the Food and Agriculture Organization. In the European context, where the Farm to Fork Strategy has set explicit targets to reduce agricultural emissions by 30% by 2030, precision fermentation offers a technically viable pathway to decarbonize protein production at scale.

The economic case has accelerated considerably between 2024 and 2025. According to the Good Food Institute Europe's 2024 State of the Industry Report, investment in European precision fermentation companies grew by 34% year-over-year, reaching €890 million in disclosed funding. The European Commission's Horizon Europe program allocated €142 million specifically to alternative protein research in the 2024-2025 work programme, signaling sustained public sector commitment. Meanwhile, regulatory clarity has improved: by January 2025, five precision fermentation-derived ingredients had received Novel Food authorization in the EU, with twelve additional applications under review by the European Food Safety Authority (EFSA).

However, commercial promise must be evaluated against operational reality. Production costs for precision fermentation proteins remain 3-8 times higher than conventional equivalents at current scale, though techno-economic analyses project cost parity for certain applications by 2028-2030. The pathway from laboratory proof-of-concept to commercial-scale biomanufacturing involves navigating feedstock variability, bioreactor design constraints, downstream processing economics, and—critically—the data infrastructure required to substantiate sustainability claims under increasingly stringent EU disclosure requirements.

Key Concepts

Precision Fermentation refers to the use of genetically programmed microorganisms—typically yeast, fungi, or bacteria—to produce specific target molecules through controlled fermentation processes. Unlike traditional fermentation (which produces outputs like ethanol or organic acids), precision fermentation engineers host organisms to synthesize complex proteins, lipids, or enzymes that would otherwise require animal agriculture or petroleum-based chemistry. The "precision" designation distinguishes this approach from bulk commodity fermentation by emphasizing the targeted, programmable nature of molecular output.

Life Cycle Assessment (LCA) provides the methodological foundation for evaluating environmental impact across a product's entire value chain—from feedstock cultivation and fermentation inputs through processing, distribution, use, and end-of-life. For precision fermentation, credible LCA requires granular data on energy consumption per kilogram of output, carbon intensity of electricity sources, water usage, and upstream agricultural impacts of feedstock production. The ISO 14040/14044 standards govern LCA methodology, but significant methodological discretion exists in scope definition, allocation procedures, and impact category selection—creating opportunities for both legitimate optimization and misleading greenwashing.

Transition Plan within the EU sustainability framework refers to a structured, time-bound strategy for aligning business operations with climate targets—specifically the 1.5°C pathway consistent with the Paris Agreement. Under CSRD requirements effective January 2025, large companies must disclose transition plans covering Scope 1, 2, and 3 emissions, capital expenditure alignment with climate objectives, and dependency on carbon-intensive activities. For precision fermentation companies, a credible transition plan addresses the pathway from current energy-intensive production to renewable-powered operations, feedstock sourcing shifts, and scaling economics.

Benchmark KPIs are standardized performance indicators that enable comparison across companies, production facilities, and technology generations. For precision fermentation, critical KPIs include productivity (grams of target protein per liter per hour), titer (final concentration in fermentation broth), yield (conversion efficiency from feedstock to product), and energy intensity (kilowatt-hours per kilogram of output). Without industry-accepted benchmarks, sustainability claims become unverifiable—the technical definition of measurement theater.

Regenerative approaches extend beyond carbon neutrality or emission reduction to encompass net-positive environmental outcomes—restoring ecosystem function, rebuilding soil carbon, and enhancing biodiversity. In the precision fermentation context, regenerative framing applies primarily to feedstock sourcing strategies, where integration with regenerative agriculture practices for feedstock crops (such as sugar beet or corn) can transform supply chain impacts from extractive to restorative.

What's Working and What Isn't

What's Working

Standardized LCA protocols are emerging through industry collaboration. The Precision Fermentation Alliance, launched in 2024, has convened major European producers to develop harmonized LCA guidelines specific to biomanufacturing. These guidelines address allocation methodology for multi-output processes, establish functional unit definitions, and specify data quality requirements for upstream feedstock impacts. Early adopters—including Formo and Solar Foods—have published peer-reviewed LCA studies following these protocols, establishing credible baselines that investors can meaningfully evaluate.

EFSA's Novel Food pathway, while rigorous, is increasingly predictable. Companies that invested early in regulatory strategy have found that EFSA's assessment timeline has stabilized at 18-24 months for well-prepared dossiers. The key insight: applications that include comprehensive compositional analysis, allergenicity assessments aligned with EFSA guidance, and robust production process documentation consistently outperform applications that attempt to abbreviate safety evaluation. Perfect Day's whey protein approval in 2022 established precedent that subsequent applicants—including Remilk and Onego Bio—have successfully built upon.

Hybrid business models are proving commercially viable. Rather than pursuing vertical integration from strain development through consumer product sales, successful EU-based precision fermentation companies have increasingly adopted B2B ingredient supply models. This approach distributes capital requirements, leverages existing food manufacturing infrastructure, and enables faster market entry. Novonesis (formerly Novozymes) has demonstrated this model at scale, supplying precision fermentation-derived enzymes and proteins to food manufacturers across the EU while partners manage consumer-facing brand development and retail distribution.

What Isn't Working

Greenwashing through selective LCA boundaries remains pervasive. Multiple precision fermentation companies continue publishing sustainability claims based on LCA studies that exclude upstream feedstock production, energy-intensive downstream processing, or Scope 3 distribution impacts. A 2024 analysis by the European Environmental Bureau identified that 60% of sustainability claims in the alternative protein sector lacked third-party verification or transparent methodological disclosure. This practice erodes credibility across the sector and exposes companies to regulatory enforcement under the EU Green Claims Directive entering force in 2026.

Scale-up economics continue to underperform projections. The gap between pilot-scale yields (1,000-10,000 liter bioreactors) and commercial-scale operations (100,000+ liters) has proven larger than early techno-economic models predicted. Contamination risks increase non-linearly with vessel size, mixing dynamics change fundamentally, and downstream processing costs have not declined as rapidly as fermentation improvements. Several prominent EU startups have revised commercial timeline projections by 18-36 months as scale-up challenges have become apparent.

Data infrastructure gaps undermine measurement credibility. Continuous monitoring of fermentation parameters, energy consumption, and process efficiency requires integrated data systems that many precision fermentation facilities lack. Without automated, auditable data collection, companies cannot generate the evidence base required for credible sustainability disclosure—particularly under CSRD's assurance requirements, which mandate limited assurance over sustainability reporting beginning in 2025 and reasonable assurance by 2028.

Key Players

Established Leaders

DSM-Firmenich (Netherlands/Switzerland) operates one of Europe's largest industrial biotechnology platforms, with precision fermentation capabilities spanning enzymes, vitamins, and specialty proteins. The company's 2023 merger combined DSM's fermentation infrastructure with Firmenich's flavour and fragrance expertise, creating integrated capacity for food ingredient development.

Novonesis (Denmark), formed through the 2024 merger of Novozymes and Chr. Hansen, commands the world's largest enzyme production platform with over 40 years of industrial fermentation experience. The company supplies precision fermentation-derived ingredients to food, agriculture, and industrial customers globally.

Evonik (Germany) has invested heavily in precision fermentation for amino acid and specialty chemical production, operating large-scale bioreactors at facilities in Germany, Slovakia, and the United States. The company's expertise spans strain engineering, process optimization, and downstream purification.

BASF (Germany) maintains precision fermentation capabilities for enzymes, vitamins, and nutritional ingredients, with particular strength in process economics and global supply chain integration.

Givaudan (Switzerland) has expanded into precision fermentation through strategic acquisitions and partnerships, targeting flavor compounds and food ingredients with lower environmental footprint than petrochemical alternatives.

Emerging Startups

Formo (Berlin, Germany) develops precision fermentation-derived dairy proteins, with particular focus on casein for cheese applications. The company raised €61 million in Series A funding in 2023 and operates pilot-scale production facilities in Germany.

Solar Foods (Helsinki, Finland) produces Solein, a protein derived from hydrogen-oxidizing bacteria rather than agricultural feedstocks—enabling production without arable land requirements. EFSA granted Novel Food authorization for Solein in 2024.

Those Vegan Cowboys (Ghent, Belgium) focuses on casein production for aged cheese applications, leveraging precision fermentation to replicate the functional properties of animal-derived dairy proteins.

Onego Bio (Helsinki, Finland) produces ovalbumin—the primary protein in egg whites—through precision fermentation, targeting bakery and food manufacturing applications where egg protein functionality is critical.

Better Dairy (London, United Kingdom) develops precision fermentation dairy proteins, with strategic focus on the UK and European markets for cheese and cultured dairy applications.

Key Investors & Funders

EIT Food (Brussels, Belgium) provides grant funding, acceleration programs, and co-investment opportunities for food system innovation across Europe, with precision fermentation as a priority investment theme.

Breakthrough Energy Ventures (global, with European presence) has invested in multiple precision fermentation companies including Solar Foods, providing growth-stage capital for companies demonstrating commercial viability.

SOSV/IndieBio operates accelerator programs in Europe and globally, providing early-stage funding and laboratory infrastructure for precision fermentation startups during proof-of-concept phases.

Astanor Ventures (Brussels, Belgium) focuses specifically on food and agriculture technology, with precision fermentation investments spanning ingredient development through consumer product applications.

Sofinnova Partners (Paris, France) maintains an industrial biotechnology portfolio that includes precision fermentation, with particular emphasis on companies demonstrating pathway to commercial-scale production.

Examples

Solar Foods' Solein Production Facility (Finland): Solar Foods opened its commercial-scale Factory 01 facility in 2024, with annual production capacity of 160 tonnes of Solein protein. The facility operates on 100% renewable electricity, with verified LCA data demonstrating 65% lower carbon footprint compared to plant-based protein alternatives and greater than 95% reduction compared to animal protein. Energy intensity has been validated at 9.2 kWh per kilogram of protein—a critical benchmark for techno-economic modeling.

Formo's Berlin Pilot Plant (Germany): Formo operates a 10,000-liter bioreactor facility producing casein proteins for cheese applications. The company has published third-party-verified LCA data showing 85% reduction in greenhouse gas emissions compared to conventional dairy production, with water usage at 4.2 liters per gram of protein versus 38 liters for dairy cattle. Regulatory submission for Novel Food authorization was filed with EFSA in late 2024.

Novonesis Contract Manufacturing for Alternative Dairy (Denmark): Novonesis provides contract manufacturing services for precision fermentation startups, operating 200,000+ liter bioreactors with established regulatory compliance. The company's standardized process documentation and quality management systems have enabled multiple clients to meet EFSA requirements for Novel Food authorization, reducing time-to-market by 12-18 months compared to building proprietary production infrastructure.

Action Checklist

• Conduct ISO 14040/14044-compliant LCA with clearly defined system boundaries, including Scope 1, 2, and 3 emissions across feedstock production, fermentation, downstream processing, and distribution
• Establish automated, auditable data collection systems for continuous monitoring of fermentation parameters, energy consumption, water usage, and yield metrics
• Develop CSRD-aligned transition plan documenting pathway from current operations to renewable-powered production, with interim targets and capital expenditure timeline
• Engage third-party verification for all sustainability claims prior to publication, selecting verifiers with specific expertise in biomanufacturing LCA methodology
• Map Novel Food regulatory requirements at project initiation, allocating 18-24 months for EFSA assessment and building regulatory documentation in parallel with technical development
• Define benchmark KPIs (productivity, titer, yield, energy intensity) and establish measurement protocols aligned with emerging industry standards
• Evaluate contract manufacturing partnerships with established biomanufacturing operators to de-risk scale-up and accelerate market entry
• Integrate feedstock sourcing strategy with regenerative agriculture initiatives, documenting supply chain carbon impacts with primary data rather than database averages
• Prepare for EU Green Claims Directive enforcement by reviewing all marketing materials for substantiation requirements and removing unverifiable sustainability language
• Establish data governance protocols that support both operational optimization and regulatory disclosure requirements under CSRD assurance standards

FAQ

Q: What distinguishes credible LCA from measurement theater in precision fermentation? A: Credible LCA includes transparent system boundaries encompassing all significant impact sources, uses primary (facility-specific) data rather than generic database values where material differences exist, applies allocation methods consistent with ISO 14044 standards, and undergoes critical review by qualified third parties. Measurement theater typically manifests as selective boundary exclusions (omitting feedstock production or energy-intensive downstream processing), reliance on best-case scenario assumptions, or publication without independent verification. The practical test: can an external analyst replicate the study's conclusions from disclosed methodology and data sources?

Q: How should investors evaluate transition plan credibility for precision fermentation companies? A: Credible transition plans specify measurable interim targets with defined timelines, identify capital requirements for achieving each milestone, and address material dependencies (renewable energy access, feedstock availability, scale-up execution). Red flags include plans that assume cost reductions without identifying specific operational or technological drivers, rely on currently unavailable technologies without contingency planning, or project emissions reductions that exceed physical limitations of known production pathways. The CSRD framework provides useful structure: does the plan address Scope 1, 2, and 3 emissions with appropriate granularity, and is capital expenditure aligned with stated climate objectives?

Q: What role do regenerative feedstock strategies play in precision fermentation sustainability claims? A: Feedstock production typically represents 30-60% of total lifecycle emissions for precision fermentation products, depending on production geography and energy sources. Regenerative agriculture practices—including cover cropping, reduced tillage, and integrated crop-livestock systems—can shift feedstock production from net carbon source to net carbon sink. However, regenerative claims require rigorous verification through soil carbon measurement protocols (such as Verra's VM0042 or Gold Standard's soil carbon methodology). Companies should document direct sourcing relationships with verified regenerative producers rather than relying on generic regenerative claims or offset purchases.

Q: How does the EU Novel Food Regulation affect precision fermentation go-to-market timelines? A: Novel Food authorization requires EFSA safety assessment before products can be legally sold in the EU. Current assessment timelines run 18-24 months for well-prepared dossiers, with additional time required for incomplete applications requiring supplementary information requests. Companies should initiate regulatory strategy at project inception, building compositional analysis, toxicology data, and allergenicity assessments in parallel with technical development. Pre-submission consultation with EFSA (available through the Novel Food consultation procedure) can identify documentation gaps before formal application, reducing risk of procedural delays.

Q: What benchmark KPIs should precision fermentation companies track and disclose? A: Core operational KPIs include productivity (g/L/hr of target molecule), titer (g/L final concentration), yield (g product/g substrate), and downstream recovery (% of fermentation output captured in final product). Sustainability KPIs should cover energy intensity (kWh/kg product), water usage (L/kg product), greenhouse gas intensity (kg CO2e/kg product), and waste generation. These metrics should be reported with clearly defined measurement protocols, system boundaries, and temporal scope. Comparison with industry benchmarks—such as those being developed by the Precision Fermentation Alliance—enables meaningful evaluation of operational performance relative to peer companies and technology-theoretical limits.

Sources

• Good Food Institute Europe. "State of the Industry Report: Fermentation 2024." Brussels: Good Food Institute Europe, 2024.
• European Commission. "Horizon Europe Work Programme 2024-2025: Food, Bioeconomy, Natural Resources, Agriculture and Environment." Brussels: European Commission, 2024.
• European Food Safety Authority. "Guidance on the Preparation and Submission of Applications for Novel Food Authorisations." EFSA Journal, 2023.
• European Environmental Bureau. "Sustainability Claims in the Alternative Protein Sector: A Critical Assessment." Brussels: European Environmental Bureau, 2024.
• Food and Agriculture Organization of the United Nations. "Tackling Climate Change Through Livestock: A Global Assessment of Emissions and Mitigation Opportunities." Rome: FAO, 2013.
• Precision Fermentation Alliance. "LCA Guidelines for Precision Fermentation Products: Version 1.0." Brussels: Precision Fermentation Alliance, 2024.
• European Commission. "Corporate Sustainability Reporting Directive: Final Delegated Acts." Brussels: European Commission, 2023.