Putting an end to chick culling

The project consists of the (i) RDI activities related to development of processes, equipment and technology for the poultry sector, focusing mainly on the health and performance of eggs and chicks during incubation and breeding, and (ii) the commercialisation of their innovative equipment to the early adopters.

The operation aims at financing the development, improvement and early adoption of equipment and technology that (i) identify the sex of an egg to avoid having to cull the chick; (ii) monitor the eggs and the chicks' health during the incubation and breeding processes to improve overall quality and avoid unnecessary waste; (iii) screen eggs for biomarkers related to health or performance issues. Finally, part of the loan will be dedicated to research and development activities related to technologies that provide stimulants for natural behaviour and reduce stress. The activities will be carried out predominantly in the Netherlands between 2023 and 2026.

The operation is covered by the Areas Eligible for Financing of "Research, Development and Innovation'' and "Sustainable Bioeconomy, under Annex II of the InvestEU Regulation.

The operation finances In Ovo's RDI programme and technology scale-up in the field of animal welfare for laying hens. The project will be developed in The Netherlands and take place between 2023-2026 and aims at ending the culling of male chicks while also improving health monitoring and general wellbeing of producing animals.

In line with the EU policy objectives of the Farm-to-Fork strategy, the project addresses the market failure of sub-optimal delivery of animal welfare by competitive markets, while generating positive externalities with clear impacts on climate change mitigation.

EIB's involvement further represents a signalling effect on the soundness, quality and impact expected from the project, that will facilitate the crowding-in of financing from other sources used by the company.

The level of risk of this operation is expected to be in excess of the risk capacity the EIB could take under its own risk. Therefore, this operation could not be executed without the thematic guarantee cover provided by InvestEU under the thematic Green Transition financial product

The project concerns investments in research and development that are expected to be carried out in existing facilities, already authorised, and which would therefore not require an environmental impact assessment (EIA) under Directive 2011/92/EU as amended by Directive 2014/52/EU. It is anticipated that the project will not have any adverse effects on the climate and environment. Moreover, the RDI activities included in the project are expected to have positive outcomes in terms of social and environmental improvements including on enabling animal welfare, lower energy consumption at hatcheries, and reduced use of resources.

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if after the project appraisal, the EIB were to conclude that the promoter is after all subject to EU public procurement legislation (Directive 2014/24/EU or 2004/18/EC, where applicable), then the Bank would require the promoter to ensure that contracts for the implementation of the project will be tendered in accordance with the relevant applicable EU procurement legislation (Directive 2014/24/EU or 2004/18/EC, where applicable), as well as Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.

The project is expected to have a considerable impact in developing solutions to end the routine culling of male chicks, to improve animal welfare and health, to increase productivity and traceability of the poultry sector, all while decreasing waste along the value chain.