Europe is warming the fastest of all continents and the agricultural sector is experiencing increasingly severe impacts, with climate losses already costing the EU almost half of its annual agricultural budget. As a result, annual losses already amount to €28 billion. The EU agri-food sector faces multiple challenges, with farmers struggling to make a living and a significant proportion of EU citizens struggling to regularly afford quality food. Nevertheless, the sector has significant untapped potential to contribute to the EU's climate neutrality objectives. However, current and planned policies only assume modest emission reductions. Key factors that can significantly reduce emissions while supporting broader EU priorities are: reducing food waste and increasing consumption of plant-based foods.

Food waste: An overlooked problem with huge potential

Food waste remains a significant and growing problem in the EU. Around 10 % of all food supplied to consumers in the EU is wasted. This is despite the fact that the EU imports the same amount of food as it throws away, highlighting inefficiencies that affect the resilience and safety of the agri-food sector. Emissions from food waste are even higher, contributing 16 % to the total greenhouse gas emissions of the EU food system. The value of food waste in the EU exceeds €132 billion. At the beginning of 2025, the EU agreed on its first legally binding targets to reduce food waste by 10 % in processing and production and by 30 % per capita in retail and consumption. However, these targets are in conflict with international agreements such as Sustainable Development Goal (SDG) 12.3, which sets a 50% reduction inIncreased action to reduce food waste offers new opportunities for farmers and the food industry, strengthening resilience and food security, competitiveness and innovation, as well as social cohesion and rural development. However, barriers remain, including persistent data gaps, weak policy integration, unfair supply chains and regulatory inertia, for example in date marking.

Sustainable Proteins: Untapped Potential for Emission Reduction

ECNO analyses suggest that a shift is underway in the production and consumption of animal proteins. Beef consumption is declining and is on track to meet the reference value set in the EU’s long-term climate target model scenarios. Sales of plant-based dairy and meat alternatives across Europe reached a market value of around €5.8 billion in 2023, an increase of 5.5 % compared to 2022. Supporting plant-based protein production brings several benefits, including direct reduction of greenhouse gas emissions, lower need for land, water and energy, improved soil health (thanks to legumes) and reduced need for synthetic fertilizers and imported feed. Furthermore, it can open up new income streams for farmers, strengthen the EU's competitiveness and innovation on a global scale, and improve public health and rural development. However, obstacles include a lack of market incentives, economic disincentives for farmers (e.g. 80% of the Common Agricultural Policy (CAP) subsidies are allocated to animal products), an unsupportive food environment, and regulatory and structural barriers to innovators.

Key policy tools for managing change

Targeted policy measures and investments are essential to support a positive transformation.

• Strengthening existing regulatory frameworks: The CAP remains the central management and financing mechanism. There is discussion about simplifying it, but there are concerns that this will undermine environmental conditions. Upcoming The Circular Economy Act is an opportunity to rethink and strengthen food waste targets, including their alignment with SDG target 12.3. Public procurement, for example in schools and hospitals, can also play a key role in promoting more sustainable options if climate and nutrition-related criteria are integrated.
• Supporting new initiatives for transformational change: The Commission plans to develop a long-term strategy for livestock production and a broader strategy for self-sufficient and sustainable protein supplies. These strategies must go beyond production and also integrate consumption-based measures and food waste reduction. Some Member States are leading by example, for example Spain with its legislation on healthy and sustainable food in schools, or Denmark with its plant-based food action plan and grant program.
• Mobilizing strategic investments: Although the CAP is the EU's largest expenditure item, it has not achieved meaningful emission reductions. Discussions on the CAP reform after 2027 highlight the urgent need shift funding from emission-intensive models to agroecological practices and sustainable protein production, instead of maintaining the status quo. Shifting CAP spending towards investment and performance-oriented measures, such as crop diversification and increased circularity in food systems, is key to building resilience and competitiveness.

The EU agri-food sector is at a crossroads. With targeted policies and investments, it can become a strategic asset in Europe's transition to a competitive and climate-neutral economy. Reforming the CAP and shifting funding towards agro-ecological practices and small and medium-sized farms is essential not only for environmental benefits, but also to strengthen rural livelihoods and ensure a just transition. Achieving these results will require a significant change in the way food is produced, consumed and supported through EU policies. Ensuring that these changes are fair, inclusive and supported by coherent policies and well-aligned investments is essential to gain broad public support and sustain progress. Spring