Ahead of EU Approval, Solar Foods Gets $90M Funding Package to Build CO2 Protein Factory

Finnish gas protein firm Solar Foods has secured €77.8M ($89.6M) in grants and loan financing from Business Finland to construct its industrial-scale factory.

Shortly after making its US debut, Solar Foods has received a comprehensive financing package to expand its capacity to produce Solein, its gas-fermented protein.

The company has received €77.8M ($89.6M) in funding from Business Finland, an arm of the Finnish economic affairs ministry. It comprises a €39.6M ($45.6M) grant and a €38.1M ($43.9M) R&D loan, both part of the firm’s’s €600M financing programme under the EU Commission’s hydrogen-based Important Project of Common European Interest (IPCEI).

The funding will be allocated towards the implementation phase of Solar Foods’s industrial-scale Factory 02 in Selkäharju, Lappeenranta. This includes construction and contract management, the delivery of key process equipment, installation, commissioning, and production ramp-up prior to the start of mass production.

It’s part of the financing plan it announced in 2025. Under that blueprint, the gas protein maker’s capital needs consist of equity, debt and grants. The Business Finland funding is conditional upon the final investment decision for Factory 02 (expected this year) and securing the total financing.

Solar Foods expects to launch Factory 02 in 2028

Solar Foods was spun out from the VTT Technical Research Centre of Finland and LUT University in 2017 to commercialise Solein, a protein produced by feeding microbes on carbon dioxide, hydrogen and oxygen instead of sugar.

The microbes are grown in a liquid form, in a process that eliminates the need for farmland, water for irrigation, and fertilisers and pesticides. They’re then dried into a flavourless powder that has 78% protein, 6% fat, and 10% dietary fibre.

Solein’s macronutrient profile is said to be akin to dried soy or algae, and it contains iron and B vitamins. Plus, it has a mild flavour, making it an ideal base for a variety of products, and is described by Solar Foods as the “most sustainable protein” on Earth.

The main raw materials needed to produce the protein are CO2 and renewable energy, resulting in emissions equal to just 1% of those generated by conventional meat and 20% of those generated by plant proteins. According to Solar Foods’s projections, replacing a kilo of whole milk with Solein could help save 20kg of CO2e.

It can be scaled up to industrial production without any reliance on farming cycles, ensuring a year-round, climate-resilient supply of protein.

Solar Foods currently produces Solein at its demo plant, Factory 01, in Vantaa, which is set to reach a capacity of 230 tonnes this year. Factory 02, expected to begin operations in 2028, will be capable of churning out 12,800 tonnes of Solein annually at €4.30-5.20 per kg of protein.

As the company finalises its investment decision for the second plant, it’s focused on securing sufficient binding customer agreements, building a partner network, advancing the facility’s design, implementing the financing plan, and securing novel food approval in the EU and a ‘no questions’ letter from the US Food and Drug Administration.

Solar Foods has already self-affirmed the ingredient as Generally Recognized as Safe (GRAS) in the US, in addition to securing regulatory approval in Singapore, where Solein has appeared in products such as ice creams, chocolate snack bars, mooncakes, and dairy-free lattes with beanless coffee.

How Solar Foods plans to use its latest grant and loan

Listed on the Nasdaq First North Growth Market in Finland, Solar Foods has previously raised around €83M in equity and debt funding for its two facilities, with backers including the European Commission and Business Finland.

The latter made a total of €110M in grants available to Solar Foods until 2035, and its initial €33.6M investment in 2022 helped support the construction of Factory 01, as part of the IPCEI scheme. The trade agency handed out another €10M under this initiative last year for the preparatory phase of Factory 02.

This latter capital infusion covered permit processes, pre-engineering, basic design and site studies, the assessment of co-location opportunities, related legal and financial services, and intellectual property rights. The remaining funds under the IPCEI notification amount to around €21M, for which Solar Foods aims to obtain a funding decision soon.

The latest €39.6 grant by Business Finland covers a maximum of 48% of the total costs eligible under the terms of the decision during 2027-31, and will be used for the implementation and ramp-up of Factory 02 with strategic partners, as well as the large-scale commercialisation of SOlein and the deployment of scalable business solutions and the expertise generated in the project.

The €38.1M loan, meanwhile, is for 10 years, with the first five as a grace period. The Finnish state treasury is responsible for its deployment, and the amount of state aid related to the loan is estimated at €6M. This will help Solar Fodos scale up and optimise Solein’s production process at Factory 02 and achieve the targeted productivity, energy efficiency, and optimal product characteristics.

“Supporting bold breakthroughs such as Solar Foods is part of Business Finland’s strategy. Our role is to raise the level of ambition in Finnish R&D by sharing risk with companies pursuing transformative innovations,” said Lassi Noponen, director-general of Business Finland.

“We were able to structure a significant financing package by combining Business Finland funding with EU clean transition instruments. Projects like this carry risks, but they are exactly the kind of high-ambition, high-expertise investments Finland needs to create entirely new industries and future growth.”

The funding comes two weeks after Solar Foods launched Solein in the US as part of Ambrosia Collective’s protein powder. The firm has also signed deals with Superb Food, KelpEat, Pothos’s PRVL brand, and Fermenta, and expects approval from the European Food Safety Authority this year.

“We are pleased with Business Finland’s funding decision,” said CEO Rami Jokela. “Solar Foods has executed its financing plan, communicated in October last year, with determination, and this funding decision is a significant part of the total financing in line with the company’s strategy.”