Bug food for pets was never Plan A — it’s the last resort for insect producers to stay afloat. They blame EU bureaucracy. “I wake up every morning for the fish, not to feed the pets,” said Sébastien Crépieux, CEO of Invers, a French insect producer based in Auvergne-Rhône-Alpes that grows mealworms in cooperation with local farmers. He explains that most insect producers started with the idea of replacing protein in fishmeal used to feed farmed fish with a more sustainable source — such as insects. Fishmeal is usually made from fish processing waste and forage fish like anchovies or sardines, and contributes to overfishing and biodiversity loss. In 2017, the European Commission approved the use of insect protein in aquaculture feed to address that issue. In 2022, it also allowed insects to be used in feed for pigs and poultry. For many in the field, that was a big step forward. “We all developed based on this concept,” said Crépieux. “But unfortunately, the Commission never banned fishmeal, so we’re still competing with a resource taken freely from the ocean at a very low price. Fishmeal imports into Europe must be controlled — we’re really killing the ocean,” he added. According to the 2024 United Nations Food and Agriculture Organization report, 10 percent of fish populations were fished at unsustainable levels in the mid-1970s. The number has almost quadrupled in 2021 to 37.7 percent of stocks. The ambitious EU monitoring rules on fisheries, which came into force last January, introduced electronic tracking systems for vessels and minimum sanctions for violations of the common fisheries policy — but failed to include limits on how much forage fish can be diverted to fishmeal. That’s where insect-based pet food comes in. “If we had to compete by selling our production as fish feed, we would already be dead,” said Crépieux. That is why he, like some other producers, shifted his focus to pet food. FEEDING PETS WITH BUGS Insect-based pet food — marketed as hypoallergenic and more sustainable — remains a niche product embraced mostly by true enthusiasts. Traditional pet food, made from meat or vegetable byproducts or grains, still dominates more than 99.5 percent of the market. According to Crépieux, it’s unlikely this type of pet food will ever become mainstream unless major brands like Purina or Acana adopt it. Insect-based pet food is marketed as hypoallergenic and more sustainable. | Sam Yeh/AFP via Getty Images Still, his company has managed to attract customers who care about the environment and good nutrition for their pets, he claimed. “The palatability is high. I think animals, unlike us, know what’s good for their health — they really eat it,” he said, adding that his cats are happy with this alternative protein. However, green NGOs like Eurogroup for Animals and Compassion in World Farming have questioned its true environmental benefits. “Farming insects has a higher sustainability impact than most traditional pet food ingredients … most insects are not sourced from Europe,” said Francis Maugère of Eurogroup for Animals. “If you want to rear them here, you can — but you must keep them at high temperature and humidity, which comes with financial and energy costs,” he added. The group also argues that there’s insufficient scientific evidence to support the hypoallergenic claims. “The sustainability of insect-based pet food is highly questionable — from insect welfare standards, to the need for diets based solely on byproducts rather than cereals and soy, to its high carbon footprint due to heating requirements,” said Phil Brooke, research and education manager at Compassion in World Farming. FEDIAF, which represents the European pet food industry, called insect-based pet food “one of several promising innovations” in the drive to diversify sustainable protein sources. Cecilia Lalander, a professor at the Swedish University of Uppsala specializing in insect use in waste management, believes using insects for pet food is “not the best use of resources.” “If we’re replacing pet food made from animal byproducts — like slaughter waste, which is already a good use of waste — then it’s really not sustainable,” she said. THE UNSUSTAINABLE LOOP Lack of fishmeal regulation isn’t the only source of frustration for insect producers. The EU classifies insects as farmed animals and prohibits using kitchen waste to feed them. As a result, insects are often raised on the same food processing byproducts — like wheat bran or brewery grains — that are already suitable for feeding pigs and cattle, making insects an unnecessary extra step in the food chain. Lalander argues this is inefficient and unsustainable. “The reason the insect industry can’t be as sustainable as it could be is entirely due to regulations,” she said. Following the mad cow disease (BSE) outbreak in the 1990s, the EU implemented strict rules to prevent a recurrence. It banned the use of processed meat in livestock feed, and ruled that farmed animals — including insects — may not be fed catering waste, as it could contain traces of meat. However, Lalander points out that insects cannot develop or transmit prions, the infectious proteins responsible for BSE, and that health risks are minimal. “The system the EU opposed was the most closed loop imaginable — giving feed originating from the same species, even if they were dead or sick,” she said. “What we propose is using post-consumer food waste to feed insects, which are then used to feed animals.” The European Commission, for its part, disagrees with the view that feeding insects with catering waste is risk-free. “The risks are not limited to BSE and prions only … but related to several transmissible animal diseases,” a Commission official said in response to a POLITICO inquiry. Catering waste may transmit several animal diseases such as African or classical swine fever, foot and mouth disease or avian influenza, the official said, while catering waste has been identified as a possible or likely source of infection in several outbreaks of these diseases in the EU. “Due to the nature of the insects which are living in their feed and are contaminated with their feeding substrate, only feeding substrate already declared safe for farmed animals has been authorized,” added the Commission official, who spoke on condition of anonymity. Several scientific studies have found, however, that these risks can be avoided if food waste is treated properly before feeding it to insects. Such treatment can include fermentation, heat treatment, or drying to remove harmful pathogens that can be found in unprocessed food waste. Lalander argues that regulatory barriers aren’t the only challenge circular business models like the insect one are facing. Long-standing market expectations, shaped by cheap, linear production systems that overlook environmental costs, also pose a significant obstacle. “In a circular business model you pay for every step of the production. But if you look at the world market predominantly it’s a linear economy which means you take product and then you have a waste and that’s it,” Lalander said. She points out that expecting insect feed to be as cheap as fishmeal and soy is unrealistic, noting that “the cost for using soy and fish meal comes in the environmental impact.” Crépieux ended his conversation with POLITICO on a grim note. “Everything sustainable always loses. It’s always easier to take from nature, which is free,” Crépieux said.

Listen on * Spotify * Apple Music * Amazon Music Ekrem İmamoğlu, Istanbul’s mayor and the main political rival of Turkish President Recep Tayyip Erdoğan, has been arrested. So what is Europe doing about it? Staying pretty quiet, it seems. Mass protests are breaking out across Turkey but Brussels is keeping its counsel. In this episode Sarah Wheaton speaks with Aslı Aydıntaşbaş, a visiting fellow at the Brookings Institution and a former journalist in Turkey, about what’s really driving Erdoğan’s shift toward authoritarianism and how Europe is responding — especially with a view to Turkey’s growing importance for European security. But Europe’s focus isn’t all on defense. We also examine some of the EU’s overlooked policy changes, from food and textile waste to agriculture and medicine shortages. Sarah is joined by Politico’s experts on sustainability, agriculture and health — Marianne Gros, Bartosz Brzeziński and Rory O’Neill — for an insightful dive into what’s going on behind the scenes.

BRUSSELS ― Conservative leader Friedrich Merz won the German election Sunday and is on track to take the reins of the EU’s largest economy. It’s not yet clear exactly what the new German government will look like — or how far Merz will be able to reshape German politics as he sees fit. It’s likely to be weeks before coalition talks between Merz’s Christian Democratic alliance (CDU/CSU) and other parties reach an agreement and Merz becomes chancellor. Still, one thing looks certain: Merz will take Germany in a different direction from that of current Chancellor Olaf Scholz. It may not even look like the Germany that Angela Merkel, also of the CDU, led for 16 years, until 2021. -------------------------------------------------------------------------------- Early projection 2021 2025 25.7% SPD 24.1% CDU/CSU 14.7% Greens 11.4% FDP 10.4% AfD 8.7% Others 4.9% Left Social Democratic Party of Germany Christian Democratic Union of Germany Alliance 90/The Greens Free Democratic Party Alternative for Germany Others The Left Turnout: 76.35% 28.6% CDU/CSU 20.4% AfD 16.3% SPD 12.3% Greens 8.5% Left 4.9% BSW 4.7% FDP 4.3% Others Christian Democratic Union of Germany/Christian Social Union Alternative for Germany Social Democratic Party of Germany Alliance 90/The Greens The Left Alliance Sahra Wagenknecht Free Democratic Party Others Source: ARD -------------------------------------------------------------------------------- Last month, Merz (unsuccessfully) pushed the German parliament for new migration measures with the support of the far-right Alternative for Germany party. It marked a clear departure from Merkel’s “Wir schaffen das” pledge to take in refugees. And there’s more. From a potential U-turn in Germany’s long-standing policy on nuclear energy and a more hawkish line on China, to plans to reboot the German-French axis to bolster EU trade, Merz could shake up the political landscape of Germany and, in one fell swoop, that of the European Union as a whole. Here’s what a Merz-led Germany means for the EU. -------------------------------------------------------------------------------- Defense Energy Climate Sustainability Mobility Trade Agriculture Central Banking Financial Services Competition Tech Cyber Health -------------------------------------------------------------------------------- Advertisement DEFENSE Two days before the election, Merz issued a stark warning that Europe must be prepared to defend itself without the U.S. “We must prepare for the possibility that Donald Trump will no longer uphold NATO’s mutual defense commitment unconditionally,” Merz said in an interview with a German broadcaster, signaling that Germany may seek nuclear protection from European allies. “We need to have discussions with both the British and the French — the two European nuclear powers — about whether nuclear sharing, or at least nuclear security from the U.K. and France, could also apply to us,” he said. Elsewhere, Merz has promised big and broad policies to scale up Germany’s defense industry, and will be expected to follow through quickly on an earlier pledge to scrap his predecessor’s block on the dispatch of long-range Taurus cruise missiles to Ukraine for strikes on Russian targets. A major theme of his early weeks in the chancellery will be setting out how Berlin plans to raise the cash to expand on the €100 billion fund agreed under the Scholz government to finance an upgrade of the Bundeswehr’s gear and digs. That cash pot has been allocated and will be spent up by 2027 on massive procurement programs, raising questions over how Berlin plans to meet its obligations to NATO — which Merz has promised to do in the future — from the conventional national budget. “The 2 percent target may be pushed up again and then we will have to prepare ourselves for that,” Merz told POLITICO’s Berlin Playbook podcast of plans to further raise the NATO target given Trump has called for a 5 percent target. Select another policy area -------------------------------------------------------------------------------- ENERGY Over the past few years, German energy policy has focused on turbocharging investment in renewable energy, shutting down nuclear reactors and scrambling to secure gas supplies from abroad to replace Russian imports.  Merz’s CDU has similarly vowed to “consistently use renewable energies, all of them.” But his political family, the center-right European People’s Party, is also pushing back against EU green energy targets. Meanwhile, Merz has taken a warmer tone toward nuclear energy than Scholz, which is challenging a long-standing German taboo around atomic power. While the country is unlikely to revive its shuttered reactors, a more lenient nuclear stance from Berlin could help pro-atomic countries persuade Brussels to treat atomic power more like renewables.  Merz has also said he wants to repeal Germany’s hard-fought Building Energy Law, which aims to accelerate a clean heating rollout — offering a potential signal to green skeptics in Europe.  Select another policy area -------------------------------------------------------------------------------- Advertisement CLIMATE A Merz-led government will place less emphasis on climate change than Scholz’s coalition. Merz expressed concern on the campaign trail about the impact of climate policy on business, vowed to put economic growth above all other concerns and led a call to roll back several EU green regulations. But green advocates express confidence that in government Merz’s rhetorical hammer will turn feather duster. Industry, broadly, wants less bureaucracy, but it also wants consistent policy. Industrial stimulus can be used to help companies become greener and more efficient. “That they will not do it in the name of climate policy. Fine. If it’s economic policy for them. Fine,” said Linda Kalcher, executive director of the Strategic Perspectives think tank. Select another policy area -------------------------------------------------------------------------------- SUSTAINABILITY Merz, like Scholz, wants to delay key corporate sustainability reporting rules to boost Germany’s ailing industry. That means it’s pretty much assured that Germany under Merz would back a strong omnibus simplification bill for green rules, a proposal the European Commission is expected to release on Feb. 26. A Merz victory also means the center-right European People’s Party, which dominates the European Parliament and is Merz’s political family, once again has a powerful ally in the EU’s biggest economy. Already, the EPP has pushed hard to water down the EU anti-deforestation rule with the support of groups further to the right (mostly without success thus far). Select another policy area -------------------------------------------------------------------------------- MOBILITY Merz is inheriting an economy in recession that is being further dragged down by a crisis engulfing its automotive sector. He recognizes the problems: high energy and labor costs, and stiff competition in the electric vehicle transition. But he’s been light on the details of how he intends to help automakers. In campaign speeches, he promised to cut red tape and reduce high costs but stopped short of putting support behind reforming Germany’s debt brake, which will keep Merz’s hands tied when it comes to funding such initiatives. Germany’s carmakers are highly dependent on the Chinese market, which led Scholz to acquiesce to Beijing’s wishes, such as lobbying against the made-in-China EV duties. Merz will take a harder line with China and has made clear to automakers that they should not come crawling to him if their Asian investments blow up. Select another policy area -------------------------------------------------------------------------------- TRADE Taking a stronger line on Russia and China and rekindling old friendships with fellow EU leaders: Merz has his work cut out for him if he wants to link the German export economy to global growth hot spots like the Mercosur countries, Mexico or Southeast Asia. Merz recognizes that a functional Franco-German axis can create more trade deals, more certainty for companies and — eventually — a stronger Europe. “We have to overcome our dispute on Mercosur,” Merz told the World Economic Forum in Davos last month, saying he was in regular close contact with French President Emmanuel Macron. The Christian Democrat has also signaled a harder approach to China. Or, at least, he’s admitted the German economy is too dependent on Beijing’s woes and wishes. But just how hawkish Merz’s approach to trade will end up being is likely to be determined by who he ends up with as a coalition partner. Select another policy area -------------------------------------------------------------------------------- Advertisement AGRICULTURE A victory for Merz’s CDU means Berlin will align on agricultural policy with both the largest political bloc in the European Parliament — the European People’s Party led by Bavarian Manfred Weber — and EU Agriculture Commissioner Christophe Hansen. Ahead of negotiations over the future of the EU’s Common Agricultural Policy, Hansen has launched an overhaul of farm policy that would effectively roll back the green agenda of the last term and instead emphasize making farming a more attractive and economically viable occupation. In its campaign platform, Merz’s CDU said it wants a CAP “that serves farmers.” Scholz’s center-left government pushed initiatives to support organic farming and reduce food waste. But it clashed with farmers a year ago over its decision to scrap tax breaks on agricultural diesel. The CDU said it will reinstate the diesel tax break and take broader action to strengthen planning security for farmers. “With the CDU, no farmer will have to protest with his tractor in front of the Brandenburg Gate anymore,” the party said. Select another policy area -------------------------------------------------------------------------------- CENTRAL BANKING Merz’s chancellorship will mark the return of conservative opposition to meddling with Germany’s notorious debt brake, which limits government deficit spending to 0.35 percent a year and is seen by many as the cause of the shoddy state of the country’s infrastructure.  Scholz’s efforts to tamper with the brake caused the collapse of his government, and Merz’s CDU faction is fiercely opposed to any reform — up to a point. Surprisingly enough, Merz himself, during a TV debate earlier this month, intimated openness to some fine-tuning, but not before other solutions are tried. Timid, yes, but revolutionary from a Christian Democrat.  Otherwise, financial markets are broadly skeptical that Merz can do much to stall Germany’s well-documented economic decline, with gross domestic product expected to contract 0.5 percent in 2025. During the race, the choice between the two parties’ economic policies was ultimately “superficial,” ING Global Head of Macro Carsten Brzeski lamented in a note earlier this month, noting that Merz’s plans for tax and spending cuts reflected an almost spiritual faith in free markets — the very same markets that have dealt such a humiliating blow to Germany’s economic prestige.  Merz will also have critical sway over the outcome of a major transnational banking battle that could put EU ideals to the test. When Milanese lender UniCredit made its surprise bid on Germany’s Commerzbank last year, it looked like exactly the kind of cross-border banking consolidation that Mario Draghi was advocating in his landmark report — until Scholz’s government reacted with horror and dreamed up wild schemes to block it. UniCredit CEO Andrea Orcel has since said he will wait on Merz’s position before making another move, but it’s hard to imagine the new leader will be any more keen to give away one of the country’s most prized lenders.  Select another policy area -------------------------------------------------------------------------------- FINANCIAL SERVICES Merz holds the keys to significantly boosting Europe’s defense capabilities in the years to come. As Trump pressures Europe to pony up military spending, many in Brussels are anxiously waiting for Germany to give its blessing for the European Commission to borrow money on behalf of member countries. Highly indebted countries such as France, Italy and Spain who fall short of NATO’s defense spending target argue that receiving “free money” from Brussels is the only way for them to drastically increase military spending without making politically unpopular cuts to other budget areas.  Merz warmed to this idea during the election campaign — and supporters hope that his backing will defeat opposition from frugal allies such as Austria and the Netherlands. There are many less controversial ideas on the table, such as exempting defense from EU spending rules or increasing military funds in the EU’s new multiyear budget that will come into force in 2028. But supporters of common debt argue that none of these will be enough to meet the scale of the challenge alone.  Select another policy area -------------------------------------------------------------------------------- COMPETITION Germany’s industrial giants are flailing and shedding jobs. Merz will be expected to act. His party’s manifesto called for “Made in Germany” champions and for a modern antitrust and competition law “that uses a global market as a benchmark,”  references to the Siemens-Alstom deal to create a European rail champion that was blocked by the EU. Merz is also a fan of cross-border state-funded projects, known as Important Projects of Common European Interest, saying he wants to use such instruments “as effectively as possible in Germany.” The country has been one of the driving forces of several IPCEIs, which have led to the public financing of hydrogen, batteries and cloud infrastructure. He also wants Germany’s national rail company Deutsche Bahn to be streamlined and restructured, with infrastructure and transport separated “to increase competition.” Given the dire state of German rail, this could prove to be a popular move. Select another policy area -------------------------------------------------------------------------------- Advertisement TECH Merz sees digital transformation as the key to Germany’s industrial revival and wants to turn the country into Europe’s tech front-runner. His plan is to earmark 3.5 percent of gross domestic product to research and development by 2030, with a special focus on space, quantum computing, artificial intelligence and cloud technologies. Key proposals include setting up a standalone digital ministry (currently merged with transport) and offering new startups temporary relief from red tape. Merz has also said that bureaucracy in Berlin and Brussels needs to be drastically reduced for Germany to regain its competitive edge. This stance is in line with the center-right views in EU institutions, where a major push to simplify digital rules is underway.  Select another policy area -------------------------------------------------------------------------------- CYBER In the months leading up to the German election, Berlin’s lawmakers looked to toughen up restrictions on (and potentially ban) high-risk vendors — cough, Chinese suppliers like Huawei — to implement the EU’s rules on cybersecurity in critical sectors. With work on the draft law rolling over, Merz will be faced with a decision on whether to crack down on Chinese tech in Germany’s critical sectors. His CDU party said that it wants to maintain close economic relations with China, but also committed to taking steps to protect critical infrastructure and security relevant technology.   The party manifesto also outlined a sweeping change of course in terms of data protection policy, encouraging more “pragmatic” rules that allow data to be used for innovation and growth, as well as law enforcement.  Select another policy area -------------------------------------------------------------------------------- HEALTH A Merz win signals a blow for Germany’s cannabis users, after the CDU leader pledged to reverse last year’s partial decriminalization of the drug. He blames the new policies, which allow adults to possess up to 25 grams of cannabis in public and grow three plants per household, for an increase in drug-related crime.  It could be good news for fans of the EU’s new rules to digitalize European health records, the European Health Data Space. In an attempt to force notoriously analog Germans away from paper files, Merz has suggested that anyone who stores their data in an electronic patient file could receive a discount on health insurance contributions.  Select another policy area -------------------------------------------------------------------------------- Victor Jack, Karl Mathiesen, James Fernyhough, Joshua Posaner, Jordyn Dahl, Koen Verhelst, Douglas Busvine, Ben Munster, Gregorio Sorgi, Aude van den Hove, Mathieu Pollet, Eliza Gkritsi, Ellen O’Regan, Mari Eccles and Hanne Cokelaere contributed to this article.

Jan. 1 wasn’t only marked by headaches and regrets this year. For EU countries, 2025 also kicked off with a nerve-racking reminder of all the environmental commitments they have to meet under EU law.  On its rocky road to becoming an environmental haven by 2050, the EU has set interim targets to track progress on reducing pollution levels, planet-warming greenhouse gas emissions, and restoring nature.   From separate collection of waste to financing biodiversity projects, here are five targets that the bloc’s 27 member countries should be meeting this year (and, for the most part, aren’t).   TEXTILES One of the EU’s main sustainability objectives is to reduce the harmful effects of its waste on the environment. To do that, Brussels expects its members to have effective collection systems in place for a growing list of types of waste. Glass, paper, food … you know the drill.  As of Jan. 1, EU countries must also collect garments and fabrics separately. That means those unusable shoes, old jackets and dirty bedsheets can’t go in mainstream trashcans anymore.  The latest round-up of data from the EU’s environmental watchdog, dated May 2024, shows that only 11 countries had mandatory separate collection systems in place, and another 14 had introduced voluntary initiatives.  In the same spirit of reducing waste in the fashion sector, the EU has also banned the destruction of unsold clothes and shoes. But that decision isn’t without consequence. A recent investigation by the Organized Crime and Corruption Reporting Project (OCCRP) revealed that Romania has become a dumpsite for discarded clothes in the EU as tons of donated garments end up in the trash. RECYCLING The tighter rules on waste management fit within the EU’s broader strategy to retrieve the valuable materials in goods that get thrown out to repurpose them.  In 2025, EU countries should be recycling or “preparing for reuse” at least 55 percent of municipal waste, according to the EU’s waste law.  But there are product-specific targets too. For example, the 27 countries should be recycling at least 65 percent of their packaging waste — like takeaway containers, paper wrappers and cardboard boxes — and 65 percent of all the electronic goods (think of all those phones, tablets, electric whisks and vacuum cleaners) placed on the EU market in the last three years.  It’s hard to know exactly if the region is on track to meet these targets or not, since the latest data from the EU’s statistical office, submitted by EU governments themselves, is from 2022. Still, POLITICO can make an educated guess — firstly, because in the summer of 2023 the Commission warned that the majority of countries were likely going to miss the targets in its progress report.  Secondly, because the numbers speak for themselves. In 2022, Germany, Austria, Slovenia and the Netherlands were the only countries already meeting the 2025 municipal waste targets, while Belgium, Luxembourg and Italy were just a few basis points away from the target line. Over half of countries were already meeting the packaging targets, however.  Meanwhile, only Latvia, Slovakia and Bulgaria were collecting the required amount of e-waste.   PLASTICS Zooming in on plastics, Brussels has set some rules for its production, use, and recycling.   In 2025, EU countries are supposed to be collecting 77 percent of single-use plastic beverage bottles put on the market. And to make things even greener, all the new bottles produced as of this year and sold in Europe should include at least 25 percent of recycled plastic inside them.  The Commission’s statistics office does not currently report figures for beverage bottles only, but some companies active in the sector are eager to demonstrate their business models are delivering results. For example, Sensoneo — a Slovak waste management company that sells deposit-return equipment where customers pay an extra fee when purchasing a bottle or can which they get back once they return the product — argues that EU countries with this technology in place have collection rates above 80 percent. NATURE When it comes to protecting nature, most of the EU’s targets are set for 2030, giving its members a bit more legroom to adapt. But as a regional bloc, the EU still has some commitments to live up to, especially on the international stage.  Existing laws on land use state that the EU was supposed to maintain its carbon sink levels between 2021 and 2025. What are carbon sinks, you ask? They’re natural assets like forests or wetlands that soak up and hold on to planet-warming CO2.  Despite Europe’s best efforts to regulate land use and protect forests by law, the continent’s carbon sinks are shrinking.     Like most things, restoration and protection costs money. During the 15th U.N. Biodiversity Conference, which took place in Montreal in 2022, countries (including the EU) pledged to spend at least $20 billion annually in development aid for biodiversity in developing nations by 2025. As of 2024, funding commitments for biodiversity were only in the millions. CARS After energy generation and heating, transport is the most polluting sector in Europe, and Brussels wants carmakers to do something about it.  That’s why it told carmakers that by the end of 2025, a car should generate 15 percent less CO2 than it did in 2021. The penalty if carmakers miss this target is set at €95 for each gram of CO2 per kilometer above the threshold, which they’d have to pay for every non-compliant vehicle. Ouch.  According to the green transport NGO Transport&Environment, however, this is one area where things are looking good. Using 2024 sales data from analytics firm Dataforce and GlobalData, and estimates on future electric and hybrid vehicle sales, the NGO suggests most carmakers will be compliant by the end of the year.

Global food systems are at a critical juncture, with the world facing the dual challenge of ensuring food security and meeting climate commitments. With just 4 percent of climate finance allocated to the sector,[1] there is a stark mismatch between the need for accelerated decarbonization and investment. This must be resolved to meet the Paris Agreement targets and the Sustainable Development Goals (SDGs). Today, much of the attention on realizing more secure, resilient and sustainable food systems is focused on farming – from crops to rearing animals – and on promoting healthy diets. However, the challenge of food systems transformation is far more complex and nuanced than this, requiring action across the entire agri-food value chain. This should include the often over-looked ‘hidden middle’, which sits between the farm gate and the end consumer. This segment plays a critical role in supply chain resilience and food security, having a tangible impact on the overall sustainability of food systems. > the challenge of food systems transformation is far more complex and nuanced > than this, requiring action across the entire agri-food value chain Unlocking the hidden middle Since the phrase ‘hidden middle’ was first coined by Dr Thomas Reardon in 2015,[2] its use has expanded to include the entirety of the midstream segment of global agricultural value chains. It includes[3] processing, logistics, storage, packaging and handling. These activities account for 18 percent of food-based emissions,[4] yet they support social stability and economic development by playing an essential role in delivering safe and nutritious food and account for up to 40 percent of the economic value-added in food systems.[5] Unlocking the hidden middle of agrifood value chains offers a key opportunity to enable food system transformation. By efficiently converting more raw materials into consumable food products, the sector helps to avoid food loss and waste – which itself helps decarbonize the food system. It also supports economic development and social stability; disseminates key information on best practices; and helps create market certainty for farmers, which improves their livelihoods. This stability in turn allows farmers to invest in best practices, which can lead to greater on-farm efficiency. > By efficiently converting more raw materials into consumable food products, > the sector helps to avoid food loss and waste – which itself helps decarbonize > the food system The critical crossroads The planet is in crisis. According to the results of the Potsdam Institute for Climate Impact Research’s Planetary Health Check[6] revealed at this year’s Climate Week NYC, Earth is in a critical condition, requiring intensive care. This diagnosis is rooted in research exploring interconnected challenges such as climate change, biodiversity loss and pollution – with global food systems standing at a critical crossroads at the heart of these issues. As the world grapples with the challenges of ensuring food security and meeting climate commitments, an urgent re-prioritization is required. Regulators and governments must take decisive action to incentivize access to safe and nutritious food while addressing environmental sustainability. One effective pathway to achieve this transformation is through integrating comprehensive food systems policies in the revised nationally determined contributions (NDCs 3.0). Rebalancing climate finance to increase and ‘ring fence’ investment and incentives across the full agri-food value chain – including in the hidden middle – is critical to stimulate momentum in food systems transformation and to simultaneously strengthen food security. This is particularly true for small and medium-sized enterprises, which account for most of the sector’s businesses.[7] By equipping food manufacturers with targeted national-level financial incentives, including grants and concessional loans, they can invest in new solutions that save greenhouse gas emissions, energy and water use, and help reduce food loss and waste. Equally important, they can opt for upgrading installed equipment, to optimize food production, while reducing resource use. Improving performance is vital for reaching sustainability goals, as a more efficient plant is a more sustainable plant, and a plant that reduces food loss and waste. As an example, a dairy factory in China has recently been recognized by the World Economic Forum as a sustainable “lighthouse factory”.[8] By implementing Industry 4.0 intelligent technologies throughout their operations, they have achieved remarkable results, including a 60 percent reduction in quality defects, which helps prevent food waste, and a 43 percent drop in energy consumption. Via TetraPak Looking ahead As attention narrows to solving the world’s most pressing climate challenges at COP29, we are urging governments and industry to act now to unlock the hidden middle, which can – and must – play a crucial role in achieving the Paris Agreement ambitions and the SDGs. With progress to limit global warming to 1.5°C above pre-industrial levels by 2100 currently falling short, investments in climate mitigation and adaptation need to be where they have the greatest impact on transformation  – namely food systems, including the hidden middle of the agrifood chain. > With progress to limit global warming to 1.5°C above pre-industrial levels by > 2100 currently falling short, investments in climate mitigation and adaptation > need to be where they have the greatest impact on transformation Advanced food processing and packaging are essential to develop modern sustainable food systems and are proven enablers of a powerful transformation across the entirety of the chain. To achieve food systems transformation, the intersection between agriculture production and conversion to food availability needs to be as efficient as possible. It’s crucial that increased investment and incentives are integrated into every country’s NDCs 3.0 in 2025 to work toward this goal. The evidence is compelling. The time to unlock the untapped potential of the hidden middle is now. -------------------------------------------------------------------------------- [1] WEF_Green_Returns_2023.pdf (weforum.org), page 3 [2] Reardon, Thomas. (2015). The hidden middle: The quiet revolution in the midstream of agrifood value chains in developing countries. Oxford Review of Economic Policy. 31. 10.1093/oxrep/grv011. [3] The hidden middle refers to all activities from farm-gate to retail outlet: input provision (and credit supply), transport, processing, storage, logistics, packaging, wholesale and delivery to local market outlets, according to a recent definition by the UN’s Value Chain Analysis for Development (VCA4D). [4] Reducing Food’s environmental impacts through producers and consumers, J Poore and T Nemecek, Science 2019, https://pubmed.ncbi.nlm.nih.gov/29853680/ [5] The hidden middle: the quiet revolution in the midstream of agrifood value chains in developing countries, Thomas Reardon, Oxford Review of Economic Policy, Volume 31, Issue 1, SPRING 2015, Pages 45–63, https://doi.org/10.1093/oxrep/grv011 [6] Potsdam Institute for Climate Impact Research (PIK), Planetary Health Check (PHC) – https://www.pik-potsdam.de/en/news/latest-news/earth-exceed-safe-limits-first-planetary-health-check-issues-red-alert [7] Data & Trends EU Food and Drink Industry, 2023 Edition, https://www.fooddrinkeurope.eu/wp-content/uploads/2023/12/FoodDrinkEurope-Data-Trends-Report-2023-digital.pdf [8] Mengniu awarded World Economic Forum ‘lighthouse factory’ status with help of Tetra Pak technology, 2024,  https://www.tetrapak.com/about-tetra-pak/news-and-events/newsarchive/Mengniu-wins-World-Economic-Forum-Lighthouse-certification-with-Tetra-Pak-technology