EU’s Biotech Hesitancy Jeopardizes €3 Trillion in Agricultural Productivity Growth

Recent report by Breakthrough Institute and Alliance for Science reveals troubling consequences of anti-NGT policies

July 11, 2025

ARTICLE

The European Union’s restrictive stance on new genomic techniques (NGTs) threatens to forfeit up to €335 billion annually in potential productivity gains, according to analysis by the Breakthrough Institute and Alliance for Science. This staggering figure—compounding to over €3 trillion across a decade—represents a critical missed opportunity as global agricultural systems struggle to achieve the 2 percent annual total factor productivity (TFP) growth needed for sustainable food security by 2050.

The implications extend far beyond economic losses. Without access to precision breeding tools, European farmers face mounting pressure to increase output through unsustainable means: expanding cultivation into marginal lands, intensifying chemical inputs, or accepting yield stagnation. Each path undermines the fundamental goal of productivity growth—producing more with less.

How Regulatory Barriers Stifle Productivity Growth

Europe’s 2018 Court of Justice ruling, which classified gene-edited crops as GMOs requiring extensive regulatory approval, creates a fundamental impediment to productivity growth. The €6-20 million approval cost per product doesn’t just exclude smaller innovators—it prevents the rapid deployment of yield-enhancing, input-reducing technologies that drive TFP gains.

Consider drought-tolerant wheat or nitrogen-efficient corn. These NGT applications directly enable productivity growth by maintaining yields under stress conditions while reducing water and fertilizer requirements. Yet European farmers cannot access these tools, forcing continued reliance on irrigation expansion and synthetic inputs—approaches that increase production costs without improving efficiency.

This regulatory framework undermines the enabling environment essential for sustained productivity growth. When innovation deployment faces insurmountable barriers, even robust extension services and market infrastructure cannot compensate. European agriculture finds itself trapped in a low-productivity equilibrium while competitors advance.

Quantifying Productivity Growth Opportunities

The Breakthrough Institute’s analysis reveals how NGTs could accelerate productivity growth across multiple sectors:

Crop Production (€72-123 billion annually): The report identifies genetic engineering applications that could generate €19-51 billion in annual benefits for the EU through improved productivity, reduced mortality rates, and higher-quality products. These gene-edited varieties represent transformative productivity gains through both yield improvements and input reductions—the essence of TFP growth.

Industrial Biotechnology (€22-38 billion annually): The analysis shows enhanced microorganisms can improve conversion efficiency in bio-based production. This exemplifies productivity growth in processing—when European biorefineries cannot access optimized organisms, they require more agricultural inputs to achieve the same outputs, reducing system-wide efficiency.

Alternative Proteins (€6-17 billion annually): The report highlights precision fermentation’s potential for dramatic improvements in resource efficiency for protein production. This represents a frontier for productivity growth—producing equivalent nutrition with a fraction of traditional inputs.

Learning from Productivity Leaders

The Breakthrough Institute analysis demonstrates how regulatory frameworks directly influence productivity growth trajectories. Argentina’s approach, which treats many gene-edited products as non-GMO, has resulted in faster commercialization led by smaller developers covering more diverse traits and organisms. Between 2015-2020, Argentina made more regulatory decisions on gene-edited products than on GMOs during the previous 23-year period.

This contrasts sharply with Europe’s experience. The report notes that over one-third of companies stopped or reduced NGT-related R&D activities following the 2018 ECJ ruling, while the largest companies moved product innovation outside the EU. The EU-SAGE database shows 414 gene-edited crop varieties under development in China compared to only 111 in EU countries—illustrating how regulatory environments shape innovation pipelines and future productivity growth potential.

The Compound Effects of Foregone Productivity Growth

The €3 trillion opportunity cost reflects cascading impacts on agricultural systems. The Breakthrough Institute calculates that existing GM crops could reduce EU greenhouse gas emissions by 33 million tonnes CO2 equivalent annually through yield improvements that avoid land conversion. Without productivity growth through biotechnology, meeting rising demand requires unsustainable alternatives.

The industrial impact multiplies these effects. McKinsey estimates (cited in the report) project €136-228 billion in direct economic impact by 2040 for materials, chemicals, and energy applications using biotechnology. When European processors cannot access NGT-enhanced organisms, they lose efficiency gains that compound throughout value chains.

Enabling Productivity Growth Through Policy Reform

The report’s analysis suggests several pathways to reverse Europe’s productivity growth deficit:

Differentiate by Risk, Not Process: The European Commission’s 2023 proposal creates two categories—plants with modifications under 20 base pairs would face streamlined approval, while more extensive changes require additional scrutiny. This recognition could immediately enable deployment of numerous productivity-enhancing traits.

Reduce Barriers for Smaller Innovators: Argentina’s experience shows that less restrictive regulations enable diverse developers to create locally adapted solutions. With current EU approval costs of €6-20 million per product, only large multinationals can afford market entry, limiting innovation diversity.

Accelerate Approval Timelines: The report cites Impossible Foods’ soy leghemoglobin as an example—submitted for EU approval in October 2019, still pending as of the report’s writing. Such delays discourage investment in productivity-enhancing innovations.

The Urgency of Action

Agricultural productivity growth remains essential for environmental sustainability, economic viability, and food security. The Breakthrough Institute’s analysis makes clear that every year Europe maintains restrictive NGT regulations represents compounded losses in productivity growth potential.

The global push toward 2 percent annual TFP growth will advantage regions that successfully deploy available innovation tools. Europe’s restrictions on biotechnology risk forcing continued reliance on less sustainable production methods or increased imports—neither path serves farmers, consumers, or environmental goals.

The €3 trillion figure quantifies what’s at stake. Productivity growth through innovation creates agricultural systems capable of feeding more people while using fewer resources. NGTs offer unprecedented precision in achieving these dual goals. The Breakthrough Institute’s analysis suggests the question isn’t whether Europe can afford to embrace these tools, but whether it can afford the mounting costs of restriction.