A new trading order is on the rise. Economic alliances are crystallising around military and geopolitical ones, redrawing old trade routes. In this new world, resource security is a major preoccupation for governments and the EU believes its bioeconomy could offer solutions.
From environment to security
The EU began to architect its bioeconomy policy around ten years ago with the EU Bioeconomy Strategy, adopted in 2012. At this early stage, the stated goals were to increase usage in renewable resources, reduce fossil dependence, increase food security, strengthen biodiversity, and enhance climate protection.
By 2018, when the updated Bioeconomy Strategy was released, the priorities shifted slightly. The overriding emphasis became using the bioeconomy to substitute for environmentally harmful petrochemical feedstocks and as a pathway to develop regional economies within ecological limits.
During these first eight years, the EU sold the bioeconomy as a means of achieving sustainable economic growth. The emphasis shifted when the pandemic began in 2020 and Europe stood on the brink of energy and raw materials shortfalls. From then on, the security benefits of valorising biomass have gained prominence and added urgency to developing the sector.
The security dimensions of the bioeconomy became more enlarged when the Russia-Ukraine war began two years later. The war made the risks of import dependence even more concrete for the EU. The region drastically reduced its natural gas dependence on Russia but winter energy security has been high on the bloc’s agenda ever since, raising anxious questions about dependencies in other areas.
EU energy and industrial policy responded by foregrounding diversification: a strategy for sourcing goods from multiple suppliers. By widening its sourcing options, an importing nation reduces risks of material shortfalls as well as its exposure to the threat of geopolitically motivated supply restrictions.
This emphasis on security through diversification has filtered through to bioeconomy policy. The climate mitigating benefits of the bioeconomy have not been forgotten but the policy emphasis now differs and environmental concerns more than ever have been tied to strategies for tackling inflation driven by uncertainties in commodity trade flows.
“With Russia’s war in Ukraine, the European Commission is rediscovering the virtues of bioeconomy for the EU’s energy independence and food security,” noted an EU Commission progress report on the bioeconomy related June 2022. It also stated that any future EU Bioeconomy Action Plan will have to respond to the impact of this aggression on food and energy prices and the prices of energy intensive products.
The UK’s Biomass Strategy report of 2023 similarly framed biomass as a useful tool of energy security, especially in harder-to-decarbonise areas. Fossil fuel dependence was identified not just as an ecological risk but an economic one too, with supply disruptions from the pandemic and war in Europe having fed into cost of living pressures on British citizens.
Where the bioeconomy can support security
In Europe, reliance on global supply chains and a lack of diversity in suppliers is bound up in the low diversity of its industrial feedstock and the dominance of oil. Of the 90 million tonnes of oil and gas used by the fossil fuel based industries of Europe, most comes from abroad and often from countries at high risk of political instability. Crude oil production within the EU is low and declining, meaning its import reliance will only grow if action is not taken to find other material bases for the economy.
The European chemicals industry’s natural gas needs mean it is the sector most dependent on energy and feedstock from Russia. Since the Ukraine war broke out, chemical companies have been paying a premium for supply from elsewhere. The result of supply insecurity, cancelled projects, and higher costs are pushing many to cut back production.
For net petrochemical importers like the EU, using biological feedstock and growing its industrial biotechnology has a huge security advantage: biomass feedstock is more evenly distributed around the world, affording greater choice in sourcing and opening up raw materials within its own borders.
Bio-based energy already represents 12% of the overall energy mix in Europe and 60% of its renewable energy consumption. As for bio-based chemicals, the EU has made the biobased product sector to be a priority area with high potential for future growth. The EU has set a target that 20% of carbon used in the chemical and plastics products made there should be from sustainable non-fossil sources by 2030.
Generally, European bioeconomy policy favours the use of waste over cultivated crops for feedstocks, given the carbon emissions and land pressures that come with farming crops. Yet even if the bioeconomy limits itself to waste residue feedstocks, the pool available is substantial. In Europe in 2017, around 86 million tonnes of biowaste was contained in municipal waste alone, according to Eurostat.
Added to this, the total annual agricultural wastes produced across EU countries between 2016 and 2020 was 924 million tonnes, the bulk of which were cereal straws (on average 311 million tonnes per year) followed by residues from oil-bearing crops, then oliver and vineyard residues and sugar or starch crops.
Increasing waste biomass feedstock in industrial applications could strengthen the economic security of European industry. Yet apart from the difficulties in ramping up large-scale biorefineries and feedstock collection, the EU will face a further challenge in ensuring growing volumes of biological feedstock are sourced sustainably.
Europe already suffers from high rates of biodiversity loss, something that will be worsened if cultivated crops or diverse forests are felled for industry. Indiscriminate uses of biomass – such as burning woody biomass for fuel – can undermine carbon emissions targets.
The EU has proposed a bioeconomy land use assessment to give a clearer picture of how much biomass we can draw before exceeding safe operating boundaries. The work of this should guide decisions over what kinds of activities along the bioeconomy supply chain should be developed where, in such as way as to limit pressure on land and biodiversity.
The EU already recognizes that end uses must be carefully optimised and its plan to achieve this is by applying the cascading use principle, which is enshrined in the revised Renewable Energy Directive that came into force in June 2021: the proposal promotes using biomass according to its highest economic and environmental added value first. Only once these uses are exhausted can biomass be burned for energy.
Growing the bioeconomy, shrinking consumption
Biobased feedstock can enhance Europe’s strategic autonomy but cannot replace every single instance where petrochemicals will be used.
First, even if enough volumes could be harvested economically, supplying a growth-oriented market would quickly undermine carbon and biodiversity targets.
Second, according to a study by the European Commission’s DG Research & Innovation 2050, there will be so much demand for biomass that sustainable supply will not be able to keep up. The shortfall is set to be between 40 and 70%. For the biobased economy to deliver on security, overall material demand and consumption growth will have to be lowered in a coordinated, gradual manner.
This means that lowering demand must be part of the pathway to ensuring economic security through the bioeconomy: focusing economic production, consumption, infrastructures, services, and technologies on serving human needs rather than serving arbitrary growth targets. Modelling studies have shown that lowering demand for goods, and therefore resources and energy use, is entirely compatible with high standards of living and wellbeing in the developed world.
There are a growing number of advocates for this two-pronged approach of growing renewable industries and cutting consumption. Luc Bas, director of the Belgium Complex Climate Risk Assessment Center, is one of them. The Intergovernmental Panel on Climate Change for the first time in 2021 included a chapter of its report dedicated to lowering demand as well as examining the social drivers of the climate crisis.
The biobased economy will be one of the key technological underpinnings of a secure, ecological sound economy. However, it must not be built on the same assumption of the fossil economy – that natural resources are infinite. From this perspective, over-consumption is not just a matter of breaching ecological limits – the competition for resources and the scarcity that ensues threatens to jeopardise supply security in the goods essential for life.
A larger biomass sector targeted at priority end uses and rational use of energy and material resources will be key to economic security in a world where long held trade ties are more uncertain and traditional industrial feedstock are pushing the planet beyond liveable bounds.