“The biobased economy has an unprecedented ability to reconcile growth, jobs, rural development and sustainability. The World Economic Forum estimates that by 2020, biorefining could generate globally over € 225 billion Euro per year across the whole biomass value chain. Policy makers around the globe are waking up to the potential of the biobased economy progressively”. To say it in this exclusive interview with Il Bioeconomista is Sebastian Søderberg, Vice President, Biomass Conversion, of Novozymes, the Danish biotech company with a strong focus on enzyme production and world leader in bioinnovation. With Søderberg we talk about bioeconomy, with a special focus on European policies to encourage the development of the sector: “A comprehensive policy – says the Danish top manager – should therefore stimulate both the demand (tax incentives, production support and feed in tariff) and supply (feedstock collection and supply-chain incentives) for biobased products as well as unlock the necessary investments for demonstration and first-of-its-kind commercial-scale plants (e.g. through the PPP on Biobased Industries)”.
Interview by Mario Bonaccorso
Mister Søderberg, what’s the role of bioeconomy for the future of a reality such as Novozymes? And for the sustainability of the European industry, in particular of the chemical industry?
The biobased economy consists in using various sources of sustainable biomass and waste to produce everyday products such as food, feed, chemicals, and fuels. The use of local biomass and waste within Europe has great potential to generate growth, jobs, and reduce reliance on fossil fuels. This also means the creation of new value chains such as connecting farmers and foresters directly to consumers.
In the biobased economy the use of oil is complemented by using biomass as the most important raw material. Instead of oil refineries the biobased economy will have biorefineries using all kinds of biomass such as household waste, agricultural and forestry residues
The technology is mature for producing advanced biofuels as the Crescentino plant illustrates, but a biorefinery should progressively be able to produce all the products we get from oil today including transportation fuel, chemicals and materials in a cost-competitive manner based on locally sourced and refined sustainable biomass and waste. The need for sustainable alternatives to oil-based chemicals is growing due to concerns about oil scarcity, increasing oil prices, and forecast shortages given shale gas dynamics.
Market trends suggest that bioprocessing may become an increasingly important production route for the chemical industry. Analysts and researchers estimate that the share of biochemicals will be up to 17% of the global chemical market by 2025 depending on future developments. The size of the biochemicals market today is less than 10% of total global chemical sales and this figure excludes biofuels.
Over recent years, Novozymes has leveraged its biotechnology capabilities to build a completely new business area from scratch: Biochemicals. Novozymes’ business model is to deliver enabling technology as opposed to physical products.
Another evidence of the technology, BASF, Cargill and Novozymes recently announced that they have achieved a milestone in producing bio-based acrylic acid process from renewable raw materials.
How much does Novozymes invest in R&D for bioeconomy? What’s your plan on bioeconomy for the next years? Could you give me some examples of new bio-based products?
Novozymes is an innovation-driven company. More than 20% of our global workforce works in R&D, and annually we spend around 14% of revenue on R&D. The focus is to ensure continuous development of our existing product portfolio while expanding the use of our technology by developing new concepts for new applications. Furthermore, we devote a significant part of our resources to long-term radical innovation in order to ensure our long-term growth. Novozymes has a solid track record of delivering new products and concepts to the market with more than 75 product/concept introductions over the last 10 years. We strive to introduce 6-8 new products/concepts a year.
How relevant is your investment in Beta Renewables?
Large-scale commercialization of cellulosic biofuels is taking off, and Beta Renewables is a fantastic opportunity for Novozymes. Beta Renewables is an extremely committed industry front-runner. They are building advanced biofuel facilities all over the world and, by being their preferred enzyme supplier, Novozymes gains access to significant new business opportunities. We expect Beta Renewables to be able to contract 15-25 new facilities within the next three to five years. The sales potential for Novozymes from these plants could be up to $175 million.
As far as Novozymes’ concerned, is the Bioeconomy the right answer to the challenges of the third Millennium?
The biobased economy has an unprecedented ability to reconcile growth, jobs, rural development and sustainability. The World Economic Forum estimates that by 2020, biorefining could generate globally over € 225 billion Euro per year across the whole biomass value chain. Policy makers around the globe are waking up to the potential of the biobased economy progressively.
Various governments are betting on the biobased economy horse, essentially for the same reasons: Boost growth and jobs while industry has started investing heavily in the construction of commercial scale biorefineries. The unknown is which region will actually lead the bioeconomy race.
Europe is technologically well positioned to spearhead the development of a new bioeconomy, with a strong agricultural, agro-food and forestry sector and world leading companies in the plant breeding, biotech and chemical/biochemical industries. It has a significant biomass potential that should be put to good use. The development of a biobased economy in Europe is important because it will play a significant role not only in mitigating climate and reducing our dependence on fossil resources, but also in spurring sustainable growth and boosting Europe’s competitiveness.
What’s your opinion about European policies on bioeconomy? Is Europe competitive against the US, Canada, Brazil and Asian countries?
The bioeconomy is not a silver bullet. It needs decisive action and bold policy moves from the EU and coordinated support from other parties. It needs to be integrated into all policies, regulations, action plans and tools affecting the development of an industrial sector. It needs to be integrated into agricultural, environmental, energy, regional, climate, trade and industrial policies. New but also existing regulations need to be amended to be coherent. This also needs to be done simultaneously and along the entire value chain to allow a full development of bio-based industries. Biorefineries will only be built if access to renewable feedstock in sufficient quantities is secured, if first-of-a-kind demonstrators are supported and demand-side tools are implemented.
A comprehensive policy should therefore stimulate both the demand (tax incentives, production support and feed in tariff) and supply (feedstock collection and supply-chain incentives) for biobased products as well as unlock the necessary investments for demonstration and first-of-its-kind commercial-scale plants (e.g. through the PPP on Biobased Industries). A combination of targeted measures and long term favorable policy frameworks will help to overcome the obstacles inhibiting investment into the biobased economy and bring advanced biobased technologies across the “valley of death” from R&D to commercialization. Finally, let’s not forget the consumers and citizens. Most of them have never heard about the biobased economy and do not know how it will impact their daily lives. Understanding of the biobased economy must be increased across society, to stimulate demand for biobased products, and the European Commission should also support this raising awareness effort.