The microbe revolution
For two centuries, the molecules that underpin modern life have been pumped from the ground in the form of oil and gas. The next industrial revolution may instead grow them in laboratories and tanks.
This is the promise of biomanufacturing: using biological processes to produce the building blocks of the future economy. Scientists can programme living cells to act like microscopic factories, capable of producing everything from food, fuels and fertilisers to plastic, chemicals and advanced materials—nearly all of which still rely to some degree on fossil resources. For millennia microbes were used to turn grain into beer and milk into cheese. Now they are engineered to turn straw into jet fuel and sugar into armour.
What sounds like science fiction is rapidly becoming reality. Driven by abundant and affordable renewable energy and dramatic advances in artificial intelligence (AI), biomanufacturing is beginning to change not only what economies produce, but how they produce it. In doing so, they address a deeper layer of fossil dependence than renewable electricity alone. The shift could be as transformative as the invention of the petrochemical industry itself. If the geographical distribution of fossil resources shaped the geopolitics of the last industrial age, then the ability to produce key molecules without them could shape the next.
China’s leaders have recognised this opportunity. Beijing has spent an average of roughly €1.4bn per year on electric vehicle research and development (R&D) over 15 years to build a globally dominant industry. It is now reportedly spending €2bn-3bn in biotechnology R&D alone. And it is doing this at a time when China already accounts for more than 70% of global basic fermentation capacity.
But its ambitions for the bioeconomy go much further. The 2022 Bioeconomy Five-Year Plan set a goal of global leadership by 2035, while the 2026 15th Five-Year Plan places biomanufacturing alongside AI at the heart of China’s future industrial model. In July 2025, Beijing unveiled a list of 35 flagship biomanufacturing products to replace fossil-based chemicals or food and feed additives, and selected 43 companies to build pilot plants. No other major power is investing in the bioeconomy with comparable scale or strategic intent.
But Europe has not lost the race to China just yet. As in areas like semi-conductors, European companies provide some of the key foundational technology and microbial strains that make Chinese fermentation successes possible. Europeans are at the cutting-edge of research—the continent has a thriving biosolutions sector worth €60bn, comparable to the GDP of Slovenia, and growing around 5% annually. And according to industry estimates, if scaled successfully, biomanufacturing could replace a quarter of European oil-based chemicals, halve the continent’s protein imports, drastically cut greenhouse gas emissions and create 700,000 additional jobs—by as soon as 2030.
Yet beneath these strengths lie familiar vulnerabilities. European firms already depend on Chinese producers for basic parts of the existing biomanufacturing value chain. As China scales its fermentation capacity, European start-ups are increasingly tempted to manufacture and scale there, exposing valuable intellectual property to a fierce competitor. In a 2025 report to Congress, the US-China Economic and Security Review Commission likened fermentation capacity to that of chip factories, warning that China’s dominance could become a strategic chokepoint. Policymakers are already losing sleep over China’s massive share of global rare-earth refining. But biomanufacturing could prove even more consequential. Imagine similar leverage extending across all future food, pharmaceuticals, chemicals and energy inputs.
Europe’s lack of urgency is worrying. Policymakers still seem to treat biomanufacturing as a niche sustainability issue rather than a foundational technology layer capable of reshaping whole economies. If Europe fails to adjust course soon, it risks sleepwalking into an old pattern: pioneering innovation, creating demand through regulation and then watching production, profits and geopolitical leverage migrate to China.
This paper argues that European policymakers should view biomanufacturing not simply as another industrial sector but as a strategic foundational technology layer. They should see China’s push for leadership in this field as a geopolitical challenge as much as an economic one. The EU needs policies and investments that amplify its significant advantages in research and innovation before they are eroded by China’s scale and industrial capacity. As with solar panels and batteries before it, Europe risks inventing the future only to surrender its strategic power—but this time with far greater consequences.
About the authors
Janka Oertel is a distinguished policy fellow with the European Power programme at the European Council on Foreign Relations.
Nina Schmelzer is a research assistant for the DARE* initiative at the European Council on Foreign Relations, based in Berlin.