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No. 59

A Sustainable Bioeconomy for Europe

The Fourth Industrial Revolution - characterised by the fusion of technologies that is blurring the lines between the physical, digital and biological spheres - is already here. And we have to be prepared for it. We are talking extensively about Artificial Intelligence, robots, chatbots, blockchain technology and other things that are disrupting the way we work, live, study and these changes have a great impact on almost every industry.

But there is an aspect that is sometimes ignored and it regards the way people manage those resources that the mankind needs to function.

Even though they do not get the attention they deserve, there are some big developments in this area. One of them is the strategy put together by the European Commission called ”The Bioeconomy Strategy”.

Updating the 2012 Strategy

Europe's Bioeconomy Strategy was adopted on 13 February 2012 and its purpose was to promote a more sustainable way of doing things. It covers the production of renewable biological resources and their conversion into vital products and bio-energy.
 
This document was revised in 2017 and the update has been published recently. Even though the main objectives still remain valid, the scope of the actions was channeled into creating a more sustainable, circular Bioeconomy for the Europeans.

Definition

According to the European Commission, Bioeconomy comprises those parts of the economy that use renewable biological resources from land and sea to produce food, materials, energy and services.

Why Sustainability Is the Key to the Future

Sustainability is the key for the future, said BlackRock CEO Larry Fink in an open letter addressed recently to the CEOs of the major publicly traded companies he invests is[1]. He also underlined the need for companies to have a sense of purpose. Otherwise, he warned, “companies will provide subpar returns to their investors who depend on it.”
 
According to Larry Fink, companies must ask themselves these questions: “What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that will help them achieve their goals?”
 
Actually, these kind of concerns raised by Larry Fink are sustainability's main components. Because sustainability is not only environmental management, it is also about economic progress and social development, objectives that can be reached through inclusivity, promoting employees’ work-life balance and wellbeing, sourcing supplies locally and stimulating entrepreneurship.
 
Having a sustainable business is good because customers wants more and more to know that you are taking care of the environment and your employees. And if you do that, then they will buy more products and/or services from you. Also, many governments and international bodies, such as the European Commission, offer monetary incentives in order to promote this cause.

For example, apart from being a collection of policies and guidelines, the ”Bioeconomy Strategy” will also be an incubator for the Bioeconomy-related startups, ideas and projects. And for the EPTDA members, this can be a funding opportunity.

[1] https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

EPTDA and the Bioeconomy

In fact, let’s see all the ways EPTDA members can be affected or can capitalise on this strategy:

  • Launch of the EUR 100 million Circular Bioeconomy Thematic Investment Platform
This action aims to tackle the funding gaps faced by innovative bioeconomy projects in the demonstration and commercial development phases. The financial instrument will be launched under the InnovFin scheme and will receive an already adopted EU budget of EUR 100 million from Horizon 2020.  In addition to the bio-based industries and the blue economy, it will also cover closely related sectors, such as agriculture and forestry. Projects from other industries can be eligible for funding if they will have a potential impact for the bioeconomy.
  • The members of EPTDA should know that this Strategy, amongst others, is stressing that companies should rely more and more on biofuels in their activity. It is important to reduce the dependence on non-renewable resources to the extent of replacing fossil fuels. Moreover, this switch can contribute to the greening of industrial products and it can help to systematically turn bio-waste and discards into value, thus achieving circularity.

In fact, the Bioeconomy and the Circular Economy (which was covered in a previous edition of our EU Monitoring Report) are going hand in hand. The first one maximizes the added value of the biological waste, non-biological waste and residue streams. But it also can contribute to the latter by providing an important source of secondary products such as biomass, which is a multipurpose “tool” for many industries.

And speaking about this subject, the EU said it will intensify the mobilisation of public and private stakeholders, in research, demonstration and deployment of bio-based solutions . This includes, for example, the promotion of technologies such as artificial intelligence and innovative solutions that are suitable for small scale deployment and easy to replicate. Under Horizon 2020, the EU public-private partnership on Bio-Based Industries has been instrumental in the development and deployment of new bio-based value chains, based on the use of renewable resources including waste. This action will result in the development of a toolbox of solutions to process biomass into bio-based products that will support the modernisation and the renewal of the European industries.

Main Pillars and Measures

The Strategy is based on three key objectives and the Commission will launch 14 concrete measures in 2019, including:

1. Scaling up and strengthening the bio-based sectors
To unleash the potential of the bioeconomy to modernise the European economy and industries for long-term, sustainable prosperity, the Commission will:
  • establish a €100 million Circular Bioeconomy Thematic Investment Platform to bring bio-based innovations closer to the market and de-risk private investments in sustainable solutions; facilitate the development of new sustainable bio-refineries across Europe.
2. Rapidly deploying bioeconomies across Europe
Member States and regions, particularly in Central and Eastern Europe, have a large underused biomass and waste potential. To address this, the Commission will:
  • develop a strategic deployment agenda for sustainable food and farming systems, forestry and bio-based products;
  • set up an EU Bioeconomy Policy Support Facility for EU countries under Horizon 2020 to develop national and regional bioeconomy agendas;
  • launch pilot actions for the development of bioeconomies in rural, coastal and urban areas, for example on waste management or carbon farming.
3. Protecting the ecosystem and understanding the ecological limitations of the bioeconomy
Our ecosystem is faced with severe threats and challenges, such as a growing population, climate change and land degradation. In order to tackle these challenges, the Commission will:
  • implement an EU-wide monitoring system to track progress towards a sustainable and circular bioeconomy;
  • enhance our knowledge base and understanding of specific bioeconomy areas by gathering data and ensuring better access to it through the Knowledge Centre for the Bioeconomy;
  • provide guidance and promote good practices on how to operate in the bioeconomy within safe ecological limits.

Next Steps

The call for tenders to recruit an Investment Manager ("IM") to set up and manage a Circular Bioeconomy Investment Platform has been launched by the European Commision. The deadline for the receipt of tenders by the contracting authority is 26th of November 2018.

Europe's Bioeconomy: Facts and Figures

  • With a turnover value of €2.3 trillion and accounting for 8.2% of the EU's workforce, the bioeconomy is a central element to the functioning and success of the EU economy.
  • A sustainable bioeconomy is the renewable segment of the circular economy. It can turn bio-waste, residues and discards into valuable resources and can create the innovations and incentives to help retailers and consumers cut food waste by 50% by 2030.
  • Germany, France, Italy, the United Kingdom and Spain generated 64% of the total EU Bioeconomy value added in 2015.

Sources and Further Reading

European Commission
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