Alternative Proteins Could Create Up to 250,000 Future-Proof Jobs in Germany By 2045 – vegconomist

A recent study by the consultancy firm Systemiq has examined how alternative protein sources in Germany could promote economic growth and open up new trade opportunities. It shows how many sustainable jobs could be created in this growing sector, what impact a diversified protein supply could have on climate and environmental protection and what measures are needed to position Germany as an innovation leader in this area.

The study “A Taste of Tomorrow: How protein diversification can boost the German economy” was conducted by Systemiq and supported by the non-profit think tank GFI Europe. It is the first study to measure the potential of plant-based, fermentation-based and cultured foods in Germany in terms of economic, environmental and social aspects. At the same time, it highlights the challenges that still stand in the way of a broad market launch, especially in Germany.

A key finding of the analysis is that Germany’s potential in this area lies not only in the production of food for a strong domestic market, but also in the export of production facilities and other inputs to Europe and the rest of the world – with its prerequisites, Germany could become the industrial backbone of this emerging sector.

Scenarios for market growth

The study outlines various scenarios for the further development of the market, which differ in terms of the extent of political support and investment. In a conservative scenario, in which the sector receives little political support and falls behind in global competition in terms of private and public investment, the German market for alternative proteins could reach a volume of 5 billion euros by 2030 and 8 billion euros by 2045. Even in this conservative scenario, the economic potential, including export opportunities, could create around 45,000 jobs by 2030 and around 115,000 new jobs by 2045. However, due to unresolved challenges, Germany would fall behind the global competition in this scenario.

The study also describes a medium and an ambitious scenario. In the high-ambition scenario, Germany could become a global leader in protein diversification through extensive public investment and support with regard to the approval of these foods. The domestic market for foods based on plants, fermentation and cultivation could grow to around 10 billion euros by 2030 and to around 23 billion euros by 2045, which corresponds to around 10 percent of the current turnover of the food and beverage industry. In this ambitious scenario, the industry could create up to 95,000 jobs by 2030 and up to 250,000 future-proof jobs by 2045.

On the one hand, this potential comes from the production of foodstuffs to meet demand in the German domestic market. However, the even greater economic potential lies in the use of Germany’s industrial expertise in the manufacture of machines such as extruders, fermenters and other upstream services in the B2B business. As one of the world’s leading machine manufacturers and exporters, Germany is in a unique position to become a mainstay of the entire alternative protein sector, far beyond its own borders. The total export potential from Germany could be up to 15 billion euros in 2030 and up to 35 billion euros in 2045, assuming the ambitious scenario.

Far-reaching ecological and social benefits

Growth in the market for alternative proteins contributes to a number of policy goals that are widely shared in Germany – diversifying our protein supply helps to regain innovation leadership and competitiveness in future technologies, promotes food security and reduces Germany’s dependence on imports and volatile supply chains.

In addition to the economic opportunities, alternative proteins also have ecological and nutritional benefits for Germany. For example, an increased switch to plant-based options and other alternative protein sources can help solve costly diet-related health problems by enabling a diet with significantly less cholesterol and saturated fat, while also addressing the common lack of fiber.

The impact of the protein revolution on climate and environmental protection can only be estimated so far, as some of the technologies behind alternative proteins are still at an early stage of development. Based on the most reliable studies on the environmental impact of alternative proteins, this analysis shows the following potential for the year 2045 in the high-ambition scenario:

• Greenhouse gas emissions could be reduced by up to 4.8 million tons of CO₂e (equivalent to the emissions of one million cars).
• Land requirements could be reduced by up to 1.2 million hectares (equivalent to three quarters of the area of Schleswig-Holstein)
• Freshwater consumption could be reduced by up to 76 million m³ (equivalent to the annual consumption of 420,000 German households).

Political action and investment are needed to leverage the economic potential

The Systemiq analysis points out that the further development of the industry depends on several factors, including technological progress, public and private investment and an efficient and transparent route to market, including evidence-based approval decisions for novel foods. Policy makers have a crucial role to play in creating an enabling environment for the diversification of our protein supply so that Germany can realize its potential.

Currently, the German market for alternative proteins faces significant challenges that could affect future growth and global competitiveness in this sector. To address these specific challenges, the study identifies five policy recommendations that are in line with broadly shared German policy objectives:

• Support companies with regard to the novel food approval process in the EU so that companies can submit high quality applications.
• Increase public research funding from the current 13 million euros per year to an average of 140 million euros per year, of which 30 million euros should be used to set up a new innovation hub.
• Invest €120 million per year to encourage private investment in infrastructure for alternative proteins and to reduce investment risk with instruments such as guarantees and low-interest loans.
• Use public procurement to integrate plant-based foods and other alternative protein sources more strongly into communal catering, for example in daycare centers, schools and hospitals.
• Creating incentives for farms to diversify their business towards alternative proteins so that they can benefit more from protein diversification as part of domestic value chains.

Sophie Hermann, Partner at Systemiq: “Diversifying our protein supply can create new options for consumers, strengthen Germany’s economic competitiveness through innovative export goods and create future-proof jobs. The industry is still at an early stage of development and some aspects are currently uncertain. Over the next five years, technological advances and developments in regulation and investment will play a key role in reducing these uncertainties. With a concerted effort from all stakeholders and targeted political support, Germany can establish itself as a leading player in this emerging sector.”

Ivo Rzegotta, Senior Public Affairs Manager at the Good Food Institute Europe: “Through courageous political decisions, Germany can become an international pioneer in the field of alternative protein sources. The next German government should take up the measures proposed here and anchor them in the government program – especially the expansion of funding for research and infrastructure as well as stronger support for companies in the demanding approval process. This could mobilize more private investment and strengthen the industry’s innovative power. Without decisive action, Germany risks squandering the enormous economic and ecological potential of these new technologies and falling behind the global competition.”