Investing in bioeconomy
For the chemical industry to achieve decarbonisation and increase its circularity, the substitution of fossil fuels and raw materials is an essential step. Biomass serves as a sustainable and low-carbon alternative to conventional fossil fuels. In this transition to a bioeconomy the biomass plays a key role as renewable energy source.
The use of renewable resources is essential for becoming a carbon neutral society. One of the key pillars to achieve the Green Deal goals requires moving away from a fossil-based towards a bio-based economy in all sectors of our economy. In addition, one of the biggest challenges that we are facing is to decarbonise energy intensive industrial sectors, such as steel, cement or chemicals that traditionally have been fuelled by fossil resources.
I believe that the bioeconomy will be present in all sectors of our society at a much larger scale that it is nowadays. The seed is already planted but it needs to grow and become stronger part of the solution package. In order to do so, it has to penetrate even in those places where traditionally it is not being a fundamental part of, and the case I am specifically referring to, is the energy intensive industries. Collaboration is a basic element to achieve the unprecedented goal of becoming the first carbon neutral society by 2050. What I like about the industry I work at and write about is that it touches so many different value chains. I don’t conceive the change I advocate for without being an intrinsic part of it. In my opinion the only way forward is to collaborate, bring together value chains and unlock their potentials by becoming sustainable bioeconomies.
“The circular bioeconomy is also an opportunity to holistically rethink our land, food and energy systems while simultaneously transforming key industrial sectors and their value chains to become circular and carbon neutral. The beauty of biological resources is that, if managed wisely and sustainably, they are renewable and circular by nature. This is why biobased solutions are key to decarbonize our economy and make it circular.”
In our previous blog, where biomass was introduced as part of the solution, we also touched upon the public-private partnership Circular Bio-based Europe (CBE) under Horizon Europe (2021 – 2027). Their Strategic Innovation and Research Agenda (SIRA 2030) sets the specific goals, targeting 25% share of of bio-based or renewable feedstock of the total volume of organic chemicals raw materials/feedstock used by the chemical industry in 2030.
Unlocking the future of circular bioeconomy in Europe
CBE JU addresses the remaining challenges of Europe’s bio-based industries. The partnership is focusing on:
Supporting research and innovation for sustainable bio-based solutions
De-risking investments in innovative, circular bio-based production plants
Addressing the technological, regulatory & market challenges of the bioeconomy
Placing sustainability at the heart of its operations
Strengthening the collaboration of all bioeconomy actors
Engaging with more stakeholders along the value chains
Fast forwarding in time, the progress report “European Bioeconomy Policy: Stocktaking and future developments” outlines the state of play of the European Bioeconomy and assesses the progress in the implementation of the 2018 EU Bioeconomy Strategy and its Action Plan. It identifies the gaps and future opportunities of the bioeconomy policy, in light of recent policy developments under the European Green Deal. Furthermore, the report acknowledges the importance of the bioplastics within the bioeconomy.
According to the report, the highest substitution of fossil-based by bio-based chemical products has taken place in bio-based solvents, bio-based polymers, bio-based packaging, biofuels and agrochemicals, with comparable production costs to fossil-based products. It is remarkable to learn that Europe’s global market share for bio-based chemicals and materials of about 31 % is twice the one of the fossil-based sector (16 %). Substitution of fossil-based inputs for chemical platform products and polymers for plastics is currently at low shares with high future potential. And here, biorefineries at scale could play an important role.
The European Commission published a proposal for a Single Basic Act establishing a number of joint undertakings under Horizon Europe, including the Circular Bio-based Europe in order to mobilise public and private stakeholders, in research, demonstration and deployment of sustainable, inclusive and circular bio-based solutions. When it comes to investments, the Bio-based Industries Joint Undertaking (BBI JU, 2014-2021) will have attracted private investment of €2.73 billion by 2024, matched with €835 million support by the EU. The new Circular Bio-based Europe (CBE) Partnership (2021-2031) receives €1 billion EU contribution to further strengthen and scale up the EU bio-based sectors in all stages of the innovation cycle, to be coupled with at least the equal contribution by the private partner, the Bio-based Industry Consortium.
Once the innovation cycle has been proven, one of the biggest obstacles to develop technologies capable of implementing a circular bioeconomy is a lack of funding for start-ups to scale up their technology. The new European Circular Bioeconomy Fund is a first venture fund exclusively focused on the bioeconomy and the circular bioeconomy in Europe, providing funding from Horizon Programs and the European Investment Bank. The fund targeted investments of €250 million, with a further €206 million in capital raised by the end 2021. In early 2022 the ECB Fund had smashed its funding target by raising €300 million. Industry experts see the fund’s mission as a major help for industrial biotech companies struggling to make the leap from the lab to the market.
European Circular Bioeconomy Fund
Investments are focused on companies or projects with Technology Readiness Level (TRL) of 6-9 and some first significant commercial traction.
These joint undertakings and specific funds are closing the gap, propelling the necessary innovation and scale up. The level of engagement is not up to the trillions the transition requires, but they are injecting and catalysing the initial millions even billions, which are the most difficult ones to bridge the net zero funding challenge.
