Technological watch

I think the overall policy framework is clear about the strategic role of bio-based industries in achieving the EU sustainability objectives. There is also clarity about the direction of EU support in the coming decade.” Philippe Mengal, executive director of the Bio-based Industries Joint Undertaking talks to Il Bioeconomista.

Interview by Mario Bonaccorso

The European Commission gave the green light to Circular Bio-based Europe, a new partnership under Horizon Europe which aims at contributing significantly to the 2030 climate targets, paving the way for climate neutrality by 2050, and increasing the sustainability and circularity of production and consumption systems, in line with the European Green Deal. The CBE JU will take the BBI JU to the next level. What changes now for the EU bioeconomy?It is a very important step, but the legal procedure continues. The entry into force of CBE JU is expected forthe end of the year after the adoption by the European Council. What is important for the EU bioeconomy is that the CBE JU proposal builds on the success of the current BBI JU while addressing the remaining gaps and some shortcomings. This means that most of what BBI JU has achieved will continue. With a budget of €1 billion CBE will implement the new SIRA via calls for proposals and will fund, among other, high-TRL projects to de-risk investments in R&I and attract investments in biorefineries in Europe.

It is essential that CBE JU and its private partner BIC remain attractive for companies representing the whole bio-based sector. CBE JU will continue to enable high SME and university participation in the projects. Within BBI JU SMEs represent 40% of all participants, and research organisations 30%. This support is essential for SMEs, as it is an opportunity to scale up their technologies and get access to the market. It is also key for universities and research centres providing expertise and key technologies. Today80% of the BBI JU projects report improved collaboration between research and industry, and it is important to keep it up in the future. Thanks to the joint efforts of the European Commission, BIC, BBI JU Programme Office and the State Representative Group, we have considerably widened the participation in the programme to all stakeholders of the sector. This will remain an important objective also for CBE JU.

What are the new aspects of CBE JU that will impact the EU bioeconomy?Regardless of the important budget allocated to CBE, the initiative needs to maximise synergies with other funding sources. Budget is a limiting factor, in particular if we consider the investments needed to deploy industries in Europe but also the growing participation and consequently low success rate in BBI JU calls. CBE JU will build on the agreements already in place with EIB, EBRD and ECBF. As the deployment was not covered enough by BBI we welcome in CBE Governance a new advisory body: Deployment Group. This Deployment Group will advise the GB in 3 dimensions: the Regional dimension, the participation of the primary sector and the investor. Feedback to policy will be reinforced in CBE which is key as the sector needs supporting regulatory framework but stability and coherence are also needed. Last and certainly not least, CBE will have specific objectives on biodiversity protection covering the mobilisation of feedstock, the land use the soil and water management practices as well as new crop protection systems. And of course a strict sustainability monitoring system will also be established.

The European Green Deal, but the same happens in Italy for the National Plan for Recovery and Resilience, only briefly mentions the bioeconomy and strongly focuses on circular economy. From your point of view, is there a real awareness in Brussels of the importance of the bioeconomy for the sustainable development of the planet?Yes, definitely there is a real awareness in Brussels. I think the overall policy framework is clear about the strategic role of bio-based industries in achieving the EU sustainability objectives. There is also clarity about the direction of EU support in the coming decade.

Already in 2018 the updated EU Bioeconomy Strategy and its Action Plan provided detailed operational guidelines on the development of bio-based industries. The strategy’s first action area focusses on strengthening and scaling up bio-based industries, unlocking investments and markets. It committed the Commission to several priority actions, including the mobilisation of public and private stakeholders in research, demonstration and deployment of sustainable, inclusive and circular bio-based solutions.

Now, it is true that the policy related to bio-based industries has evolved in the last two years to provide a comprehensive framework and define what constitutes the public interest in the development of theseindustries in the near future. Indeed, the EU Green Deal and Green recovery plan refer to bioeconomy, with a strong focus on circular economy.

In 2019, the EU Green Deal communication created the overarching framework for sustainable economic transition and set the EU’s objectives of carbon neutrality, resource efficiency and zero pollution. It calledfor mobilisation of R&I instruments to support these objectives and explicitly mentioned the creation of a public-private partnership to support R&I in circular bio-based industries. Furthermore, the Clean Planet for All communication considers the circular economy and bioeconomy as key transition pathways to climate neutrality. It foresees the increased use of sustainable biomass in the form of biofuels and bio-based materials and calls for safeguards so that increased demand for biomass does not lead to reduction of natural carbon sinks. In the Circular Economy Action Plan, the EU commits itself to support the sustainable and circular bio-based industries. And the New Industrial Strategy announces in 2020 the EU support to key enabling technologies, including industrial biotechnology.

The Farm to Fork communication also refers to the bio-based economy as an opportunity for farmers, and the EU again commits itself to actions to speed up market adoption of bio-based solutions. I also think the Common Agricultural Policy is a powerful instrument for Member States to promote and incentivise the bio-based industry if they consider it as a strategic priority for rural development. Finally, the new Biodiversity Strategy announced last year a plan to assess the availability of biomass for biofuels and review the legislative framework, as well as set sustainability criteria for use of forest biomass.

All these policy objectives and actions have been reflected in Horizon Europe, the EU’s R&I programme for the 2021-2027 period. The programme is entrusted with the task to facilitate the development and deployment of bio-based innovations that contribute to climate neutrality, resource efficiency, biodiversity, and zero pollution objectives, while ensuring also the contribution of bio-based industries to economic growth and regional development.

What are the obstacles still present on the road to the full realization of a sustainable and circular bioeconomy?Vast subject. Let’s consider the main remaining obstacles but also some emerging challenges. First the bio-based industry sector is still very fragmented and is still facing risks in different segments of its value chains. The structuration of the sector and its value chains is still needed to maximise the investments, job creation and to contribute to the EU Green Deal in different dimensions, including its socio-economic objectives. Second, it is also clear that the structuration and organisation of the bio-based sector must be guided towards sustainability goals with strong environmental impacts. So more research is needed to make sure that the bio-based production processes have a clear positive impact on the biodiversity and the environment. Third, many regions with important amounts and variety of biomass do not use them to their full potential, and not all EU countries and regions have a strategy for the development of bioeconomy. Fourth, due to the lack of awareness, market uptake is slow both on the consumer side and by traditional industries. And lastly, the regulatory framework, of course needs to be supportive, but it must also be stable and coherent. Stability is key to make Europe an attractivity area where to invest in bio-based industry. More coherence is needed between the criteria to fund the development of a new bioplastic and the one that apply to leverage other source of funding to finance the biorefinery. It shouldn’t be that a new bio-based crop protection product is easier to launch on the North American Market than in Europe.

And there are also emerging challenges in the field. Climate change puts pressure on the need to decrease carbon emissions from industry. Bio-based industries are intrinsically carbon efficient. But the overall carbon efficiency of bio-based industrial production systems depends on the amount and form of energy they use in the whole production system including production of biomass, transport, processing, and so on, has to be measured by a whole ‘Life Cycle Assessment’ (LCA). This is why some industrial systems can be demonstrably very carbon efficient and contribute to climate mitigation while others may even emit more carbon than they bind.

Sustainable sourcing of biomass is key and the circularity of the bioeconomy should be maximised. I could simply consider that the bioeconomy is sustainable and circular by nature because it is based on the best system ever invented by nature to capture CO2 and to produce biomass via the photosynthesis. Indeed, our planet produces every year much more dried biomass than the oil extracted from soil. Cellulose, produced by nature is the most abundant biopolymer on earth. Around 100 billion tons of dried cellulose are synthesized annually by nature as a result of photosynthesis. It is by far more than the global crude oil production of 5.5 bn tons last year. Sustainable sourcing of biomass is absolutely key and the risk of competition with food, the land use, the ecosystem and biodiversity protection are also critical elements to be considered and they are considered by CBE JU.

We have been struggling with the pandemic for a year. What effects has this crisis had on the development of the bioeconomy in Europe?From what I can read and hear, and based on discussions with my colleagues from the European Commission and BIC, the sector was quite resilient during the first months of the pandemic. Maybe usingdomestic resources, such as biological waste, makes bio-based industries more resilient to external crises and instable availability and cost of raw materials.

However, in the last months we saw companies suffering from the crisis and putting on hold some investment projects. There is nothing worse for business than uncertainty. Our ongoing projects also suffer because of the uncertainty on investments, travel bans, and suspension of activities for universities and research centres.

I think the recovery from the pandemic crisis demonstrates the need for structural changes that will make the EU’s economy more resilient to future shocks. Bio-based industries can certainly contribute to the economic recovery and maintain high growth for an extended period. They can bring jobs to economically depressed areas and provide additional income sources to biomass producers in regions that typically do not benefit from industrial development.

That said, I am afraid that the current state and pace of development is insufficient to unleash the potential ofbio-based industries in the closest future. Impact assessment performed by the European Commission shows that the sector is not yet ready for radically increased investment in the next decade due to persistent technology, market and policy risks preventing the bankability of bio-based projects. In the context of the post-pandemic recovery, there is also a risk that unprepared sectors or market players will not be in a position to absorb the investments made available through recovery policies, and that funds will go to moreconventional industries, thus entertaining an unsustainable situation.

As you know, biopharmaceuticals are not included among the sectors that make up the bioeconomy in Europe; is it time to update this definition?I don’t think so. It is a fast-growing sector with high potential, and I know it well from my previous work in it as R&D engineer and CEO.

In North America, bioeconomy encompasses all economic activity related to life sciences research. Considering that the biopharmaceutical sector belongs to “red biotech”, it could be part of the bioeconomy. Nevertheless, I personally prefer the historic European definition based on “4F” – food, feed, fibre and fuel – which I think is more coherent.

The EU bioeconomy drivers apply to all sectors in its European definition but biopharma. That’s for instance the case for the innovation deficit drivers where we consider lack of R&I activities across scientific disciplines and along the research-innovation chain, an underdeveloped and insufficiently integrated R&I capacity across the EU to support sustainable bio-based systems, and an overall lack of R&I activities on sustainability issues.

The biopharma business is more intense than bioeconomy in terms of R&I, and the risk is different. A biopharma business already shows value at demonstration phase in the first stages of clinical trials, while a first-of-its-kind flagship biorefinery at commercial scale is not yet bankable in Europe.

Furthermore, the biopharmaceutical sector is a low volume – high value business with no risk of competition with food and land use and a very indirect impact on environment. So for this business the cascading approach is by far less critical.

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Source: Il Bioeconomista, 2021-04-12.