Stranded assets in EU+UK agriculture during food system transformations

A large-scale food system transformation is essential in mitigating a host of environmental crises, including climate change. Dietary shifts, particularly a reduction in animal-sourced foods (ASFs) in high-income countries, are a key pillar. These shifts risk stranding substantial ASF-related assets. ASF-focussed assets represent 78% of EU27+UK fixed agricultural assets, with €158 billion linked to livestock and €100 billion to feed production. We estimate that reductions in ASFs of 9.5%, 60%, and 100% in dietary transitions could strand 18%, 50%, and 77% of these assets, respectively. We find that there is generally sufficient time to depreciate and phase-out assets, offering a pathway for limiting stranded assets. Investors should account for potential stranding risks in financial modelling, alongside climate-related risks. Given food producers’ high exposure to the risks of asset stranding – with potential cascading effects throughout the supply chain – integrated policy support is essential in ensuring a just, effective transition.