The State of the SustainableFood- & AgTech Ecosystem in Europe June 2024 1Introduction: Food for Climate 2FoodTech deepdive3AgTech deepdive4Cross-topic technologies Introduction: Food for Climate The increasing frequency of heat waves, floods, hurricanes, and wildfiresworldwide highlights the escalating impact of climate change, putting immensepressure on our food production systems. Climate change has already degraded23% of the EUʼs agricultural land, reducing annual agricultural production by up to$177 billion. A recent UN report reveals that the hidden costs of the global food system amountto $12.7 trillion, approximately 10% of global GDP. These costs predominantlyaffect health (73%) and the environment (over 20%). Notably, these hidden costsare a staggering 27% of GDP for low-income countries (mostly due to poverty andclimate), in contrast to 8% for high-income nations (mostly driven by unhealthydiets). As a whole, our food system is a significant contributor to climate change,responsible for 34% of global greenhouse gas (GHG) emissions. As highlighted at Dubaiʼs COP 28: to build sustainable and climate-resilient foodsystems, we must pursue multiple goals simultaneously: decarbonizingagriculture, restoring soils, ensuring safe and healthy food for all, and adapting tothe new realities of a changing climate. In this report, we delve into the current landscape of the climate-consciousEuropean FoodTech startup scene, analyzing how innovative food ventures aredriving change towards a more sustainable future. Beyond greenhouse gasemissions reduction in foodproduction, food security &agriculture resilience is risingin the agenda. Risingchallenges from climate changeand a growingpopulation are constraining food systems: as the worldreaches nearly9.7 billion people by 2050, we mustachieve a staggering70% increase in food production toensure global food security. EU leaders have responded by putting the matter at thecenter of the next five yearsʼ agricultural policy. Thoughno reference to sustainable practices in the agriculturalsector or the protection of the environment were made inthe Paris agreement, the text mentions“preparing forthe new realities stemming from climate change.” Adaptation & resilienceThe process of adjustment to climate and its effects European climate food startups attracted $2B in 2023, in line with 2022ʼs record high. 2024 isfor now projected to return to pre-pandemic levels due to the lack of megarounds. European investment in climate Food- & AgTech startups In 2023, Europeconstituted morethan half of globalfood- x climate techfunding, surpassingthe US for the firsttime. As an industry, food-x climate tech, ranks10th in Europe andwas the bestperforming sectorbehind only Energy. Food, as a whole, ranks 6th mostfunded in Europe. Where are ClimateFoodTech startups based? France ranked 1st inEuropean Food- xClimate tech VCfunding in 2023despite a 29%decline. Countries such as Belgium andIceland have shown impressivegrowth in that period. In Belgium, multiple companiesreaching breakout stage in 2023pushed the countryʼs growth. Iceland strong growth is due to thefact that almost no food x climatecompanies had been funded before2023. Top investors in European Food x Climate startups since 2016. 1Introduction: Food for Climate 2FoodTech deepdive3AgTech deepdive4Cross-topic technologies Key food innovations for climate transition FoodTech deepdive The global food system is estimated tocontribute 34% of total greenhouse gasemission with livestock accounting for ~50%of them. Technology innovation Innovative technologies that can enable the decarbonization of key foodmarkets such as fermentation. Even if fossil fuel emissions were immediatelyhalted, global protein production withcurrent methods alone would make meetingthe Paris Agreement's 1.5°C targetimpossible. Alternative proteins are anattempt to mitigate food related emissions allthe while strengthening food security. Ingredient innovation Innovative ingredients that can enable the decarbonization of keyproducts such as alternative proteins, cocoa or coffee. Food supply chains also need to be altered tomeet 2050 targets. Packaging accounts forapproximately 5% of GHG emissions fromfood systems while more than 1.3 billion tonsof food waste are generated along the wholefood supply chain, producing approximately1.1 billions of tons of CO2 per year. Food circularity & sustainable distribution Ensure circularity in the post-retail phase and implement circular,non-fossil based packaging for food and beverages. “To address some of Europe's most pressing challenges, weurgently need to finance and support innovative food solutionsthat help us adapt to a changing climate and mitigate itseffects, while securing our food supply. We believe that the emerging bioeconomy and scientific breakthroughs have the potential tosolve some of the biggest food and climate issues. Many companies are pioneering efficient, cost-eff