Europe Indoor Farming Market Research Report: Forecast (2026- 2032)

Europe Indoor Farming Market Size: Forecast (2026-2032)

The Europe Indoor Farming Market size is valued at around USD 10.82 billion in 2025 and is projected to reach USD 16.92 billion by 2032. Along with this, the market is estimated to grow at a CAGR of around 6.60% during the forecast period, i.e., 2026-32.

Europe Indoor Farming Market Outlook:

The Europe Indoor Farming Market is poised for steady growth, supported by sustainable policy frameworks, technological innovation, and rising consumer demand for fresh, locally grown produce, etc. This market is evolving rapidly as the region seeks to adopt sustainable and resilient food production systems. The approach is gaining momentum in response to urbanization, climate uncertainty, and some policies, including the European Green Deal’s Farm-to-Fork Strategy, which promotes resource-efficient and low-emission agriculture. For instance, the EU cultivated nearly 2 million hectares of fresh vegetables and harvested around 59.8 million tonnes in 2022, highlighting the continent’s strong baseline demand for consistent, high-quality produce. Indoor systems are increasingly viewed as complementary to traditional farming, ensuring stable yields irrespective of a volatile climate.

Additionally, innovation and investment are reinforcing the market’s expansion. For reference, European vertical farming firms attracted about USD330 million in venture funding in 2023, underscoring investor confidence in controlled environment agriculture (CEA). Similarly, technology collaborations, such as those between Signify (formerly Philips), are providing advanced horticultural LED systems to commercial farms, thereby reducing production costs and improving energy efficiency. Moreover, scientific studies further suggest that CEA can boost productivity by 10 to 100 times per hectare compared to open-field cultivation, strengthening Europe’s ability to produce locally while conserving land and water.

Europe Indoor Farming Market Recent Developments:

• July 2025: Urban Crop Solutions commissioned a custom vertical-farming tower for Inagro at the Agrotopia research center in Roeselare, Belgium. The innovative unit maximizes space through multi-layer cultivation within a rooftop greenhouse, combining natural sunlight with LED lighting to enhance energy efficiency and crop productivity.
• May 2025: Planet Farms announced an investment of more than USD33.30 million into a new indoor vertical-farm facility in the United Kingdom, planned to cover about 20,000 m², replicating its Italian model and aiming for large-scale production.

Europe Indoor Farming Market Scope:

Europe Indoor Farming Market Drivers:

Policy Support for Sustainable Agriculture

The European Union’s Green Deal and Farm-to-Fork Strategy serve as core drivers in promoting climate-neutral, sustainable, and resource-efficient food systems. These frameworks directly support controlled environment agriculture (CEA) as a means to enhance food security, lower emissions, and reduce chemical dependency in food production. For instance, under the Farm-to-Fork Strategy, the EU targets at least 25% of total agricultural land to be organically farmed by 2030.

Similarly, the policy seeks a 50% cut in pesticide use and risk and a 20% reduction in fertilizer use by 2030, objectives that align strongly with indoor farming’s chemical-free and precision-controlled production. As a result, various firms are significantly investing in indoor farming practices, thus contributing to the market growth.

Rising Investment and Commercial Expansion

Growing financial support and strategic collaborations are strongly driving the expansion of Europe’s indoor farming market. For instance, in May 2025, Planet Farms (Italy) partnered with Swiss Life Asset Managers in a major joint venture worth up to USD227 million, with Swiss Life contributing about USD145.5 million to scale advanced indoor-farming infrastructure across Europe. In the same month, Planet Farms announced an additional USD33.30 million investment to establish a new high-tech indoor farming facility in the United Kingdom.

These developments reflect rising investor confidence and growing institutional interest in sustainable food production. Such large-scale funding partnerships are accelerating technology adoption, capacity expansion, and cross-border collaboration, positioning indoor farming as a key pillar of Europe’s sustainable agri-food transition, thus contributing to the market growth & expansion.

Europe Indoor Farming Market Trends:

Integration of Smart Farming Technologies

The European Indoor Farming Industry is rapidly advancing through the adoption of smart farming technologies that make food production more efficient, sustainable, and data-driven. Advanced tools such as Internet of Things (IoT) sensors, artificial intelligence (AI), and cloud-based monitoring systems are now common in indoor farms across the region. For instance, the AMS Institute in Amsterdam is collaborating with GROWx and Wageningen University to develop an AI-powered robotic vertical farm, expected to improve yields while reducing energy and labor costs.

Additionally, in Germany, SkoneLabs has introduced sensor-driven digital dashboards that remotely track light, humidity, and nutrient levels, improving crop consistency and reducing waste. This is because smart automation can lower operational costs by nearly 25–30% and boost productivity by up to 35-40%. Consequently, the market is gaining traction due to the adoption of smart farming technologies.

Expansion of Vertical and Modular Farming Models

A key trend shaping the Indoor Farming Market in Europe is the rapid expansion of vertical and modular farming systems designed to produce food locally in space-limited urban areas. For instance, in 2024, Tungsram (Hungary) opened a 150 m² R&D vertical farm in Budapest’s Újpest district, supported by the Hungarian Ministry for Innovation and Technology. The farm operates fully under LED lighting and serves as a model for future energy-efficient indoor farms. Additionally, in 2023, the European Bank for Reconstruction and Development (EBRD) and the European Union backed a modular vertical-farming project in Romania, aimed at scaling sustainable urban food systems.

Similarly, in 2025, the Netherlands-based Greenhub expanded its modular indoor-farming platform, offering flexible vertical setups for supermarkets and restaurants. These projects demonstrate how vertical and modular systems are becoming essential for resource-efficient, climate-controlled, and urban-focused food production, aligning with Europe’s sustainability and food-security goals.

Europe Indoor Farming Market Challenges:

High Initial Costs Hindering Market Growth & Expansion

One of the major challenges in the Europe Indoor Farming Market is the high initial investment and energy intensity required to operate large-scale controlled environments. Setting up an indoor farm involves substantial spending on infrastructure, LED lighting, automation systems, and climate-control equipment, all of which increase capital expenditure compared to traditional farming. For instance, a 2024 review article revealed that energy consumption in indoor vertical farms ranges between 0.023 and 0.231 kWh per gram of fresh produce, whereas greenhouses consume around 0.0054 kWh/g and open-field farms about 0.003 kWh/g. This steep difference highlights how energy costs significantly impact profitability, especially amid rising European electricity prices.

Moreover, obtaining construction and energy permits for such high-consumption facilities often delays project timelines. These factors, combined with fragmented regulations and limited financial incentives, make scaling indoor farming challenging, particularly for smaller operators seeking sustainable returns.

Europe Indoor Farming Market (2026-32) Segmentation Analysis:

The Europe Indoor Farming Market Report and Forecast 2026-2032 offers a detailed analysis of the market based on the following segments:

Based on Facility Type

• Greenhouses
• Vertical Farms
• Container Farms
• Cider
• Indoor Hydroponic Farms
• Others

Greenhouses dominate the European indoor farming industry, holding about 70% market share, due to their wide adoption and proven efficiency in controlled environment agriculture. They allow farmers to grow crops year-round regardless of external weather conditions, ensuring higher productivity and stable yields. The use of advanced technologies such as automated climate control, LED lighting, and precision irrigation systems has further enhanced greenhouse performance. Countries like the Netherlands, Spain, and France have led innovations in greenhouse design, making them key hubs for modern horticulture.

Greenhouses also support large-scale cultivation of vegetables, fruits, and flowers while optimizing water and energy usage. Their ability to integrate with hydroponic and aeroponic systems adds flexibility and sustainability to production. Overall, the combination of technological advancement, scalability, and cost-effectiveness makes greenhouses the leading facility type driving the growth of the indoor farming market.

Based on the Growing System

• Hydroponics
• Aeroponics
• Aquaponics
• Soil-based Systems
• Hotels and Hospitality Venues
• Hybrid Systems

Hydroponics is the leading growing system in the European indoor farming industry, accounting for more than 60% market share, primarily due to its efficiency, sustainability, and suitability for urban environments. This method allows crops to grow in nutrient-rich water instead of soil, enabling faster growth, higher yields, and better control over nutrients. European countries such as the Netherlands, Germany, and the United Kingdom have widely adopted hydroponic systems to maximize space utilization and reduce resource consumption.

The system uses up to 90% less water compared to traditional farming and eliminates the need for pesticides, making it ideal for sustainable agriculture. Hydroponics supports year-round cultivation of leafy greens, herbs, and vegetables with consistent quality. With growing demand for fresh, locally produced food and advancements in automation and LED lighting, hydroponics continues to dominate as the most preferred and scalable growing method across Europe’s indoor farming industry.

Leading Service Providers of the Europe Indoor Farming Market:

·Priva

Priva is a key player in Europe’s indoor farming industry, known for its innovative automation and climate control technologies. The company offers integrated solutions that optimize energy efficiency, irrigation, and crop growth in controlled environments. With a strong focus on sustainability and digitalization, Priva helps farmers achieve higher productivity and resource savings through smart data-driven systems.

·Certhon

Certhon is recognized for its advanced greenhouse engineering and turnkey indoor farming solutions across Europe. The company combines horticultural expertise with cutting-edge technology to design energy-efficient and fully automated farms. Its customized systems for lighting, irrigation, and climate control enable consistent year-round crop production. Certhon’s collaborations with global agritech leaders further enhance its innovation capabilities.

·Signify N.V.

Signify N.V., formerly known as Philips Lighting, is a leading provider of horticultural LED lighting solutions for indoor farming. The company’s precision lighting systems support optimized plant growth and improved yield quality. Through continuous R&D and partnerships with vertical farms and research institutes, Signify drives advancements in sustainable agricultural practices across Europe.

IGS Limited, GrowUp Farms, LettUs Grow, Jungle, Les Nouvelles Fermes, Planet Farms, V-Farm, and Others are the key players in the Europe Indoor Farming Market.

Europe Indoor Farming (2026-32): Regional Projection

The Netherlands leads the Europe Indoor Farming Market, driven by its advanced agricultural technologies and strong focus on sustainable food production. The country is home to several global innovators such as Priva and Certhon, which are pioneers in greenhouse automation, climate control, and vertical farming systems. With extensive government support, cutting-edge R&D, and strong collaboration between technology firms and research institutes, the Netherlands has transformed indoor farming into a high-tech, resource-efficient industry. Its expertise in hydroponics, LED lighting, and precision farming allows Dutch companies to export technology and produce globally, positioning the nation as the European hub for smart indoor agriculture. For instance, more than 17 hydroponics supplying companies are in the Netherlands, such as Hortilife B.V., etc. Thus Netherlands is dominating this growing & flourishing regional market.

Gain a Competitive Edge with Our Europe Indoor Farming Market Report

• Europe Indoor Farming Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.

• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.

• Europe Indoor Farming Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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