From the fossil fuel economy to the bioeconomy

This project examined the success factors, opportunities and risks for bio-based industrial systems in the European Union. These systems form the basis for a broader bioeconomy, which can make a significant contribution to the sustainable development, climate neutrality, autonomy, resilience and competitiveness of EU industries. However, the high level of innovation in bio-based solutions also presents challenges: technologies must be scalable, integrate into the market and develop value chains. Added to this are geographical factors, economic viability, regulatory hurdles and organisational requirements.

In response to these challenges, this study aims to fill existing knowledge gaps and provide strategic support for industrial policy as well as research and innovation programmes.

These are the key findings:

Bio-based industrial systems and business models in the EU

• Bio-based value chains are complex, as companies often operate across multiple chains and serve different markets.
• Despite the challenges, the bio-based industry in the EU offers significant market potential. It competes successfully with fossil-based value chains because it is closely linked to the local economy.
• High investment costs, a shortage of skilled labour and bureaucratic hurdles arising from certification requirements are among the key problems.
• Successful companies rely on technological leadership, local resources and products with high added value.

Biomass availability and utilisation

• In the baseline scenario, agricultural biomass production grows only to a limited extent. However, modern cultivation techniques and regenerative methods increase productivity.
• The availability of forest biomass remains stable. At the same time, the volume of organic waste can be significantly expanded through improved collection and recovery practices.

Import structures for raw materials relevant to the bioeconomy in the EU

• The EU is heavily dependent on imports of bio-based raw materials. This dependence entails risks and requires risk mitigation strategies.
• Successful case studies show that value chains for bio-based products can be established even with reduced dependence on external sources.

Opportunities and challenges of biotechnology and biomanufacturing in the EU

• The sector is growing particularly strongly in innovative areas such as lignin-based biocomposites.
• Challenges relating to scaling up and commercialisation must be overcome in order to fully realise the sector’s potential.
• Sustainability plays a key role, as many biotechnological applications significantly reduce greenhouse gas emissions compared with fossil-based alternatives.

Recommendations for action

• Secure and reliable availability of raw materials
• Promotion of sustainable biomass through modern agriculture
• Accelerating electrification to reduce competition for biomass
• Mobilising waste raw materials to support climate targets
• Enabling the complementary use of plants for high-value organic production
• Strengthening the resilience and diversification of the supply chain
• Supportive market conditions for bio-based industrial systems
• Creating lead markets and demand for bio-based products
• Ensuring regulatory coherence and a level playing field for bio-based products
• Innovation ecosystem and scaling
• Removing scaling bottlenecks and funding gaps (the so-called double valley of tears)
• Strengthening the EU’s core biotechnological capabilities in new platforms
• Promoting and funding R&D initiatives for domestic bio-based materials

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This study was commissioned under a framework contract with the European Commission on Research and Innovation.