Food security is the cornerstone of national security. Currently, the global food security situation is becoming increasingly severe, and the concept of sustainable development has been deeply integrated into the fabric of socio-economic development. In this context, the alternative protein industry, represented by plant-based proteins, cell-cultured proteins, and fermentation proteins, serves as an essential complement to traditional livestock systems. With its unique advantages and enormous development potential, it is gradually becoming a key force driving transformation in the global agricultural and food sectors. 

The Academy of Global Food Economics Policy (AGFEP) and GFIC have jointly resleased "The Macroeconomic and Environmental Impact of China's Alternative Protein Sector" research report. This study systematically reviews the current development status of the alternative protein industry, predicts future trends in China's food consumption and protein supply- demand, simulates the potential environmental impacts of alternative protein substitution for traditional proteins, and evaluates the development potential of the alternative protein industry from a macroeconomic perspective. 

Key Findings

First, China's protein supply-demand pattern has undergone structural transformation. From 2000-2023, animal food production increased significantly, with total protein supply showing leapfrog growth. Meanwhile, total protein demand expanded rapidly, and the demand structure underwent fundamental reversal, with feed protein becoming the primary demand. Domestic protein consumption growth consistently exceeded domestic production growth, with import dependence soaring from 4% to 31%. It is projected that by 2035, China's per capita protein demand will continue to grow, while total protein consumption and production will maintain steady slight increases, with protein self-sufficiency rates slightly recovering but gaps remaining evident.

Second, the global alternative protein industry has initially formed an industrial landscape with three major technological pathways: plant-based protein processing, microbial fermentation, and animal cell cultivation. The key to industrial development lies in technological breakthroughs, capital investment, and policy support. Currently, the three major technological pathways will evolve along the path of basic research - "technology transfer - industrial production"; capital allocation generally shows characteristics of "extending from end products to key technological nodes". However, the alternative protein industry still faces challenges including insufficient investment and financing scale, low technological maturity, high production costs, limited consumer acceptance, gaps in regulatory systems and standard setting, and incomplete industrial ecosystems. 

Third, from a market perspective, the global alternative protein market is expected to reach $290 billion by 2035, with plant-based products accounting for 69%, fermentation proteins and cell-cultured protein products accounting for 22% and 9% respectively, and international market policy support showing differentiated characteristics. The alternative protein industry will reshape global market structures and employment markets, with significant industrial added value, employment driving effects, and technological spillover effects. Similarly, alternative proteins have greater advantages over traditional proteins in greenhouse gas emission reduction, water resource conservation, and land use. 

Fourth, alternative proteins have clear positive effects in optimizing land use and reducing carbon emissions. Under the premise of meeting the same total protein demand requirements, by comprehensively developing plant-based meat, plant milk, cell-cultured proteins, fermentation proteins and other alternative proteins, and improving market penetration rates of alternative protein products to reduce demand for traditional proteins, China could reduce grain production by 23.11 million tons, thereby promoting changes in planting structure - with fruits and vegetables and soybeans increasing production by 8.16 million tons and 710,000 tons respectively. This would significantly optimize agricultural production structure and reduce total arable land demand by 1 million hectares, effectively alleviating agricultural expansion pressure. Meanwhile, agricultural carbon emissions would be reduced by 65.59 million tons. 

Fifth, the alternative protein industry has enormous potential in driving GDP growth and expanding employment. Under assumptions of declining alternative protein product prices and increasing market scale, plant-based proteins, fermentation proteins, and cell-cultured proteins could respectively add approximately 95.7-134.4 billion yuan, 14.8-38 billion yuan, and 39.1-80.1 billion yuan to GDP, creating employment for 320,000-470,000, 50,000-130,000, and 140,000-280,000 people respectively. By 2035, the alternative protein industry as a whole is expected to add approximately 150-250 billion yuan to China's GDP and create 500,000-900,000 new jobs. Meanwhile, the alternative protein industry is also expected to promote industrial chain extension, technological spillovers, product exports, and dietary structure transformation. 

Policy Recommendations

First, enhancing strategic positioning: Incorporate the alternative protein industry into the strategic emerging industry "15th Five-Year Plan", 2035 vision goals, and national major science and technology projects, clarify its positioning in diversified food supply, "Healthy China", and "dual carbon" goals, and promote coordinated layout with food security, rural revitalization, bioeconomy and other strategies. Establish "R&D subsidies + pilot support + large-scale production rewards" incentive strategies and full-cycle policy toolkits. Incorporate the alternative protein industry into China's Certified Emission Reduction (CCER) system.

Second, strengthening scientific research: focus on "bottleneck" segments such as serum-free culture media, efficient reactors, and biological scaffold materials, and establish special research projects. Integrate resources from universities, research institutes, and leading enterprises, strengthen coordination between technology R&D and industry, establish special funds to support technological breakthroughs, form industrial innovation consortiums, build "Future Food Joint Laboratories", and set phased breakthrough targets through "open competition" mechanisms.

Thrid, improving standards and regulation: Quickly formulate relevant standards and safety assessment procedures for alternative protein products, establish industry access and risk control mechanisms. Actively participate in international standard setting. Formulate industry carbon emission standards, build relevant databases, improve carbon footprint labeling systems, and encourage enterprises to conduct certifications.

Fourth, promoting industrial coordination: Advance the "three entry" project of alternative protein products "entering supermarkets, entering cafeterias, entering households". Layout an integrated industrial system of "raw material cultivation - functional protein extraction - end product processing", and promote localization of core raw materials. Encourage cross-sector integration such as "alternative protein + manufacturing", "alternative protein + health", and "alternative protein + digital platforms". Establish industrial alliances and technological innovation centers to form industrial cluster effects. 

Fifth, optimizing consumer guidance: Improve market acceptance of alternative protein products through science popularization and other means, demonstrate and promote in public food systems, and drive normalized application of alternative protein products. Reduce consumption barriers for alternative protein products through product innovation in high-frequency life scenarios. 

Sixth, enhancing international competitiveness: Strengthen international cooperation to overcome key technological challenges and accelerate achievement transformation. Promote exports of plant protein raw materials and equipment to enhance international competitiveness. Actively participate in international standard setting to seize industry discourse power. Build global investment cooperation platforms, establish localized networks in key markets through overseas acquisitions, joint ventures, and other methods to achieve global industrial chain layout. 

In the future, driven jointly by market foundations, technological accumulation, and policy support, China's alternative protein industry is expected to achieve a leap from "following" to "leading", becoming an important force in the global alternative protein industry landscape. 

The Macroeconomic  Environmental Impact of China's Alternative Protein Sector.pdf