From farm waste to resource: the case for regenerative agriculture

Rising fertiliser prices, tightened nitrogen regulations, and farmers facing squeezed margins are forcing Europe’s agricultural sector to rethink how it uses and manages one of its most basic inputs. The challenge is not only to reduce pollution, but to rebuild a food system that is more circular and far more resource-efficient.

Modern farming has long run on a linear model: nutrients are extracted, applied, consumed, and all too often, lost along the way. Manure, fertilisers, fuel, and food production have been managed as disconnected parts of the agricultural system, rather than as parts of a single, self-sustaining cycle.²

Today, that model is growing under pressure. Across Europe, farmers are facing a difficult convergence of forces: tighter environmental regulation, volatile fertiliser prices, higher energy costs, pressure on margins, and mounting concern over soil, water, and biodiversity. What began as a debate about nitrogen is evolving into a broader question about food-system resilience and resource security.³

The Netherlands illustrates this challenge well. On rich pastures, south-west of Amsterdam, dairy farmer and cheesemaker Kees Captein runs a family business that dates back to the late 1940s. Alongside milk, his cows produce thousands of tonnes of manure.⁴ The nitrogen in that animal waste can be a valuable fertiliser, but when poorly managed, it can leak into soils and groundwater, damaging biodiversity, water quality, and human health.

Dutch policy aims to cut nitrogen emissions from agriculture significantly by 2035, including limits on livestock numbers and restrictions near vulnerable and protected nature zones.⁵ Wider EU rules have also reduced the amount of manure farmers can reuse as fertilisers. For farmers such as Captein, this creates a costly contradiction: excess manure must be removed, even as conventional fertiliser is bought to replace it.

“I paid EUR 40,000 to get rid of the manure,” he says. Asked how he and so many other Dutch farmers keep going under the weight of it all, his answer is simple: “We just keep going on; we are stubborn.”

Fertiliser, energy, and the geopolitics of food security

Geopolitics is sharpening the challenge further. Fertilisers are global commodities, closely linked to natural gas, energy prices, and trade flows. The European Commission notes that the Middle East accounts for 35% of global nitrogen fertiliser exports; even though the EU’s direct dependence on the region is limited, disruptions there can tighten global supply and intensify competition for alternative sources.⁶

Recent conflict involving Iran has underlined that vulnerability. The closure of the Strait of Hormuz disrupted fertiliser supply chains, pushing up both fertiliser and energy prices and constraining the availability of key raw materials for EU production. Reuters reported that heightened tension in the Middle East drove up urea prices and fertiliser margins, prompting some farmers to delay purchases altogether.⁷ Higher natural gas prices, a core input in nitrogen fertiliser production, are also expected to raise production costs for some of Europe’s major producers of nitrogen-based fertilisers in the coming quarters.⁸

The real question is how Europe manages nutrients, energy, waste, and food production as a single circular system, rather than as separate problems to be solved in isolation

For Europe, this is no longer only a question of affordability. It is a question of strategic resilience. The European Commission’s 2026 Fertiliser Action Plan⁹ aims to support farmers facing rising costs, strengthen domestic production, and reduce dependence on imports. It also encourages the use of organic and bio-based European fertiliser alternatives, and expands the use of digestates from organic waste, such as manure and food scraps.

This is where the story outgrows fertiliser. The real question is how Europe manages nutrients, energy, waste, and food production as a single circular system, rather than as separate problems to be solved in isolation.

From waste stream to resource stream

Natural ecosystems are the backbone of the global economy: more than 50% of global GDP is estimated to depend directly on nature and the ecosystem services it provides, from the fertile soils and pollinators that make crop production possible to the raw materials that underpin entire industries.¹⁰ Land-use change, resource extraction, and pollution are eroding that foundation faster than it can regenerate.¹¹ At Lombard Odier, we believe a circular bioeconomy – a resource-efficient model that works in harmony with nature rather than at its expense – will increasingly replace today's linear, extractive one.

Agriculture sits at the centre of that transformation. It is exposed to volatile input costs, climate risk, and biodiversity loss, but it is also one of the sectors with the greatest potential to restore nature capital, reduce waste, and build more resilient value chains.

Read also: Growing up – vertical farming sector suffers investment slowdown, but leading firms prove profitability potential

The question is how to rethink the nutrient cycle itself.

The Dutch Agriculture and Horticulture Association (LTO) argues that farmers already have organic manure available on their farms, and that greater flexibility around nitrogen limits could reduce reliance on imported fertilisers. Environmental groups see it differently, warning that Europe’s fertilisers debate should not ignore the wider pollution crisis. Sara Johansson of the European Environmental Bureau puts it bluntly. “This is not a fertiliser crisis. Europe is facing a pollution crisis.”¹²

A more circular model would help close that loop, turning waste streams into resource streams and reducing dependence on imported, energy-intensive fertilisers

Both perspectives point to the same underlying issue: the current system is misaligned. As the OECD notes, when nutrient inputs – such as livestock manure and fertilisers – exceed what crops and pasture can absorb, the surplus can be lost to soil, water, and air pollution.¹³ Farmers are left facing rising compliance costs and volatile input prices, while ecosystems, communities, and public health systems bear the wider costs of nutrient pollution. A more circular model would help close that loop, turning waste streams into resource streams and reducing dependence on imported, energy-intensive fertilisers.

Turning manure into energy and value

One example is Groenewoud Gas, founded by Frank Van Genugten. The company collects fresh cow manure from 18 local dairy farms, feeds it into a digester, captures the raw biogas, and processes it into natural gas for the local grid. It also extracts other useful materials along the way, including a peat substitute and a lower-nitrogen fertiliser made from animal waste.¹⁴

The model turns an environmental liability into a resource stream: manure becomes energy, fertiliser, soil material, and building material. Farmers who once paid to remove waste could one day be paid for it instead. “I have a waiting list for farmers to join in,” Genugten says. “I think that in a few years they will be paid for their cow manure because we can make a lot of very nice things out of it.”¹⁵

This is the circular bioeconomy in practice: using renewable biological resources more effectively, reducing dependence on fossil inputs, and designing systems that regenerate natural capital rather than deplete it.

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The investment opportunity in circular agriculture

For investors and private banking clients, the relevance is clear. Fertiliser is not merely a farm input. It sits at the intersection of energy markets, natural gas prices, food security, trade routes, regulation, water quality, and biodiversity.

Agriculture has long run on a linear model: extract resources, produce food, manage waste, repeat. It relies heavily on fossil-based fertilisers, imported inputs, and one-way waste flows. The model now emerging favours nutrient recovery, bio-based alternatives, and regenerative practices that rebuild soil health and local resource resilience.

Read also: Soil-first farming: why regenerative agriculture is gaining ground

At Lombard Odier, we believe this shift is being led by economics as much as environmental necessity, and that companies enabling it will benefit as the transition matures – those that support nature’s regenerative capacity, or help prevent its degradation, through pollution control, waste management, and resource efficiency. In practice, that spans regenerative forestry, organic fertilisers, and sustainable packaging.

In agriculture specifically, that translates into investment opportunities across bio-based fertilisers, nutrient recovery, methane reduction, circular materials, and water-quality solutions. The economics are increasingly compelling in their own right: farmers combining no-till and cover-crop systems can expect yields 10–30% above conventional peers,¹⁶ with the advantage widening in drought years, even as input costs fall. For companies across the food value chain, backing this transition means building supply chains that are more productive, more resilient, and less exposed to the kind of geopolitical shocks described above.

In food, as in energy, that transition is not a cost – it is a competitive advantage for those who move first

From ecological pressure to competitive advantage

The Dutch nitrogen debate shows how difficult this transition can be. Farmers are under pressure from regulation, volatile input prices, and thin margins. Environmental groups warn that pollution costs remain too high. Policymakers, meanwhile, are trying to balance food security and farmer viability against strategic autonomy and ecological limits.

The opportunity lies in redesigning the system itself: treating manure not only as a waste management problem but also as a source of energy, nutrients and materials; treating fertilisers not only as a source of emissions and pollution but also as a platform for regeneration.

In a world of higher input costs, tighter regulation, and greater geopolitical uncertainty, the future of farming will depend on using resources more intelligently. In food, as in energy, that transition is not a cost – it is a competitive advantage for those who move first.

For farmers like Kees Captein, survival may still come down to stubbornness. For investors, policymakers, and food-system leaders, it will depend on something more structural: the ability to turn ecological pressure into circular transformation.