Positive EFSA opinion for Solein, but approval not yet final

On 9 November, Solar Foods received a positive scientific opinion from EFSA, concluding that Solein is safe under the proposed conditions of use. We believe the news indicates that things are moving forward but note that the approval in the EU is not yet complete.

What’s new? EFSA now considers Solein safe as a protein ingredient in selected, strategic food categories. The categories are directional and conditional on the European Commission’s final authorisation. The opinion takes the novel food application, submitted on 29 October 2021, to the final stage of the EU approval process. The Commission will next draft an implementing act and present it to the Member State committee for a vote. Solar Foods has also updated its previous expectation of approval during 2026 and now expects the remaining process to take about 7–9 months, based on recent novel food authorisation timelines.

What does it mean? Solar Foods says the opinion removes key regulatory uncertainty and should accelerate offtake negotiations toward binding agreements. We understand binding customer agreements are among the prerequisites for the final investment decision (FID) on Factory 02. Solar Foods puts the 2030 addressable market at cEUR7bn in the EU and cEUR11bn in the US, with market value growth of c8% annually.

What do we do? We reiterate our fair value range of EUR0.8–7.3, as we still see uncertainty around the FID and timeline for Factory 02. However, after the positive EFSA opinion announced, we estimate that potential offtake agreements and the FID on F02 are now closer than before. If Solar Foods is able to accelerate the offtake negotiations as the company stated in the press release, and if offtake agreements covering most of the estimated F02 capacity are secured, we believe this would reduce the uncertainty underpinning our fair value range and support an assessment towards its upper end.