Solar Foods

Logo: Solarfoods

Established: 2017
Climate Fund investment decision: 2021
Funding target: demonstration facility in Finland
Funding: EUR 10 million capital loan
Main anticipated impact: emission reduction potential of up to tens of millions of tonnesin the future.

A growing and prosperous global population means a significant increase in protein consumption, some predicted to even double by 2050. Eating habits are diversifying and the demand for alternative sources of protein alongside meat is growing strongly globally: by 2035, they are projected to cover up to one-fifth of protein sources.

The innovation of Solar Foods, created from research by VTT and LUT University, enables very low-emission protein production by utilising renewable energy. The facility will be the world’s first commercially operating plant to produce protein from carbon dioxide and electricity and is scheduled to be operational in early 2023.

The task of the Climate Fund is to accelerate significant solutions into an industrial scale, so that the Fund can contribute to supporting the EU’s and Finland’s carbon neutrality goals. Carbon neutrality requires major changes in all areas of society, including food production. The changes are in a hurry and many different solutions and means need to be introduced simultaneously, with Solar Foods’ solein representing a completely new kind of solution.

Climate Fund financing decisions are guided by a three-tiered set of criteria. The threshold conditions for financing are at least self-sustaining business, verifiable added value for the state’s participation in the total investment and compliance with the six environmental objectives of EU sustainable financing, the so-called do no significant harm principle. In addition to the threshold conditions, emissions reduction potential and other effects, such as business potential, are sought.

Solar Foods has a credible plan for profitable business and the ability to repay the capital loan. The project passes the Do no significant harm examination, i.e. the plant meets the threshold condition in accordance with the EU’s environmental objectives. The aim of the demonstration facility is to verify the functionality of the solution on a commercial scale. This stage of development requires significant investments, which still involve risks. By participating in the financing package, the Climate Fund enables Solar Foods’ plant investment to be realised earlier and thereby a faster path to emissions reductions.

In the case of Solar Foods, the impact criteria emphasises the considerable emissions reduction potential – up to 90% compared to meat production and 80% to plant protein production. With greenhouse gas emissions from global food production of around 15 billion tonnes per year, Solar Foods’ innovation would offer an emission reduction potential of up to tens of millions of tonnes in the future. In addition to emissions reductions, the project has significant business and productivity potential.

The Climate Fund’s capital loan has been priced on market terms using the interest rate pricing according to the EU interest rate reference table. In addition, a share exchange option is attached to the financing agreement.

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