EUROPE – The state of vertical farming in Emerging Europe is on an upward trend as their counterparts in Western Europe downsize and go bankrupt due to high energy prices and inflation.
According to the region’s data-driven and social-impact management advisory, also referred to as Emerging Europe, vertical farming has gained popularity in Europe owing to the region’s reassessment of its carbon footprint and food sustainability.
The growth can also be attributed to climate change which is shifting where certain crops can be grown. As a result, farmers in these countries are migrating from rural areas to cities.
In addition, the increasing population also means that the area of agricultural land is decreasing every minute.
Vertical farming allows for more land-efficient agriculture closer to urban population centers by stacking layers of growing space for crops lit by LED lights atop each other in warehouses and other structures, outlines Emerging Europe.
By utilizing indoor farming, countries in emerging Europe are ripping more compared to conventional fields.
“Indoor growth spaces are pest-free, and plants can be harvested up to 15 times a year instead of two times yearly in a conventional field,” reveals the article.
In 2022, however, vertical farming in Europe struggled as the cost of keeping LED lights and climate controls on skyrocketed.
France’s Agricool, which had raised €30 million (USD 31.84m) went bankrupt as Infarm, based in Berlin and once Europe’s largest vertical farming company, laid off 500 employees who represented half of its workforce.
The report divulges how Infarm had raised over USD 600 million in venture capital and had operations in the United Kingdom, France, Germany, the Netherlands, and Denmark but went bankrupt citing supply chain disruptions, power expenses, and the economic environment as factors.
According to Cindy van Rijswick, a strategist at the Dutch research firm RaboResearch, several pressures that have always existed for vertical farms have really come to a head in 2022.
“For starters, the industry is extremely vulnerable to increases in electricity prices,” explained van Rijswick.
“Powering all of those plant-growing LEDs uses a lot of electricity, and between December 2020 and July 2022 consumer energy prices in the EU went up by nearly 58%.”
Eighteen months ago, European vertical farms might have spent around 25% of their operational costs on electricity, but that might have gone up to around 40%, she estimated.
Nonetheless, there appears to be hope in the sector as the Global Vertical Farming Market is expected to reach USD 26.37 billion by 2030, at a CAGR of 24.42% during the forecast period 2022 to 2030.
The vertical farming market forecast can be attributed to several factors, including a growing preference for climate control technology, which requires less water and energy for irrigation.
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