Cibus moves into greenhouses as the wheels come off vertical farming

In 2019, Greencoat Capital made an intriguing £120 million ($153 million; €140 million) investment into the construction of two greenhouses with 29ha of growing space in northwest England, which would draw the majority of their heating needs from waste heat produced by nearby water treatment facilities.

Two years later, in 2021, the firm was back at it, this time committing £86 million to a 22ha greenhouse in Cambridge, England, which would draw most of its heating needs from a nearby reservoir.

The need for energy self-sufficiency in indoor farming came into sharp focus in 2022 during the energy crisis, when roughly 180ha of greenhouses in the southeast of England went unplanted because it made more financial sense to halt production. A similar story played out in the Netherlands, where 40 percent of the CEA industry body’s 3,000 members reported being in financial distress due to their decision not to plant.

Cibus Capital’s acquisition of Dutch sustainable energy greenhouse grower Duijvestijn Tomaten is extremely timely, then, given that the company operates 25ha of greenhouses supported by an onsite geothermal energy system; 2,500 solar panels; five combined heat and power systems; an e-boiler and repurposed CO2 supplied by a Dutch Shell refinery.

The impact of the integrated energy approach is a production system that is “almost CO2 neutral,” said Cibus, and the firm intends to use Duijvestijn as a blueprint for The Flavour Farm – a European greenhouse platform that will see Cibus acquire and develop greenfield and brownfield greenhouses located near infrastructure assets that can help it to offset its energy needs.

One of the things that became clear during Agri Investor’s deep dive into the controlled environment agriculture space last year was that the location of indoor farms – both greenhouses and vertical farms – is critical to ensure their energy needs can be sustainably and affordably met.

Amid the rush to enhance national self-sufficiency through CEA, lack of a well thought out plan with regards to energy sourcing could very easily lead to a country trading their food import headache for an energy import one, given the need to heat and power indoor farms for them to grow food.

While the trough of disillusionment in which the vertical farming space now finds itself is not solely due to a poorly thought out energy strategy – business models based purely on low-calorie microgreens, the end of low-interest credit and poor unit economics have not helped – it is an achilles heel of the industry, given pureplay vertical farms use no sunlight and the overwhelming majority of start-ups use little to no integrated renewable energy assets.

It must be acknowledged that greenhouses and vertical farms are at different levels of maturity as food production technologies – greenhouses have been profitably growing fruit and vegetables for decades. But as the need to decarbonize every industry grows ever more pressing, the integrated energy approach being pursued by Greencoat, Cibus and numerous other stakeholders is expanding that maturity divergence even more.

The last 12 months alone have seen bankruptcies at vertical farming companies AeroFarms, Fifth Season, Kalera and Upward Farms. Agricool is seeking a buyer to remain solvent, and Iron Ox has rebranded to Inevitable Tech and ditched its food production business to focus on indoor farm robotics.

For its part, Cibus is “partnering with businesses who have excess waste heat and CO2 in combination with availability of land for greenfield glasshouses to be built, and the current pipeline has five sites in the EU totalling 60ha and three in the UK totalling roughly 40ha under review,” Cibus head of agriculture Jason Silm told Agri Investor.

When fully built out, “The Flavour Farm is targeting 100-150ha of Dutch glasshouses across the platform in the EU and UK,” added Silm.

These projects will no doubt require significant capex and opex, but they seem like a better bet than a food production method that seeks to replace the sun – that’s no mean feat.