Industrial Biotechnology in the European Union: Identifying the Best Pathways to Boost Growth of the Bioeconomy

Feedstock-Related Barriers

With feedstock and energy prices frequently higher in Europe than in other parts of the world, biomass-derived products are often costly, especially compared with fossil alternatives. While appreciation of the importance of sustainability is high in Europe, opportunities to use some feedstocks may be offset by concerns over competing uses of those feedstocks. This can result in a preference to use non-food resources for some applications.

However, the necessary infrastructure for waste and agricultural residue collection and storage still needs to be sufficiently developed. Furthermore, technologies to turn lignocellulosic feedstocks into useful products still need to be fine-tuned, particularly in terms of bioconversion yield and downstream processing. There is a need to assess the potential indirect effects associated with using some feedstock streams currently considered “wastes” and “residues.” Moreover, the need remains to identify and adopt best practices to develop or improve their sustainable mobilization.

Policy and Investment Strategies Targeting Development and Commercialization of Innovative Research

While the general perception is that R&D in the EU is competitive in terms of research expertise and technical know-how, EU stakeholders fear competition from other global regions that have more straightforward and pragmatic public funding schemes to support research and innovation. Whether due to clear patenting systems, open knowledge systems that foster collaboration, multiple and diverse funding opportunities, government incentives for ongoing industry development, or easier market access for new technologies, the belief persists that it is often quicker and easier to become economically viable in the IB sector outside the EU than within it.

The differences between EU, Asian, and US R&D policies are especially pronounced in the development phase, where European projects are hampered by—to use the EU jargon—the “innovation valley of death ” issue. The perception is that the EU provides insufficient support for demonstration scale plants. This leads to a situation in which Europe cannot reap the benefits from its strong research base because it lacks expertise and funds for up-scaling towards commercially-relevant production. Efforts to address this issue are underway, as exemplified by the Biobased Industries Public Private Partnership (PPP), a €3.7 billion (USD4.7 billion) partnership between the EU and industry. The PPP's objective is to support industrial research, bridge the innovation “valley of death” gap, and overcome challenges in commercializing technologies for biobased products in order to enable a sustainable European bioeconomy.

European companies and investors are relatively risk averse and this is not helped by the burdensome regulatory environment and the perception of a capricious and unscientific approach to policy making. The development and commercialization of innovative products using IB processes requires extensive and long-term investments. However, venture capitalists generally expect a possible exit in a foreseeable, relatively short period of time; i.e., a return on investment that does not match the timeframe necessary to become commercially viable in the EU IB sector. Government support by means of fiscal incentives could help alleviate this situation and provide temporary assistance to promising technologies. Investor confidence is further hampered by the lack of tangible and quintessential products and undermines their trust in a newcomer's ability to compete with large, established, and addressable markets. To tackle this problematic situation, stakeholders interviewed for the BIO-TIC project argued for a shift from an EU R&D policy towards an EU industrial policy. Coincidentally, decision makers have picked up on the issue by advocating for a European Industrial Renaissance that includes objectives to support biobased products and IB as a key enabling technology (KET), and aims to ensure that industrially-relevant research is carried out to safeguard European competitiveness. ⁵ On entering office, the new European Commission leader Jean-Claude Juncker announced that his political guidelines for the next Commission include a €300 billion (USD378 billion) investment program over the next 3 years to help revive the EU economy. ⁶ While it is as yet unclear how Juncker's industrial policy objectives will be translated into concrete policies and measures, it is crucial that the previous Commissions' promises of support to IB and biobased products remain part of the policy package.

Conclusions

The potential benefits of the deployment of IB products and processes in the EU are enormous. The BIO-TIC project has shined a spotlight on the measures needed to promote the development of a sustainable IB industry in Europe. Throughout the numerous stakeholder workshops and interviews carried out so far, a clear consensus has emerged on the critical priorities to be addressed to realize the full potential of this promising technology. The European Commission has rightly recognized IB's role in enabling and fostering the bioeconomy, but IB processes can do much more and be instrumental in realizing the EU's hopes of an industrial recovery, contribute to the establishment of a circular economy, and help achieve significant carbon reduction targets. Industry is galvanizing itself to maximize the opportunities offered by IB; however, policy makers need to acknowledge the wider benefits of the technology and ensure that a more supportive policy environment for IB processes and products is put in place. By delivering multiple opportunities for job creation, economic regeneration, and positive environmental impacts, IB will act as a key enabling technology for Europe's prosperous and sustainable future.