Nova-Institute: “It’s time for a change and a new start” for the EU bioeconomy

Michael Carus, managing director of the nova-Institut

The European Union will need a new political framework for rolling out its bio-based economy by 2020 at the latest. The existing framework does not create sufficient market pull for implementing innovative, bio-based technologies. To say it are Michael Carus, Lara Dammer and Roland Essel in the latest policy paper of nova-Institute “Options for Designing a New Political Framework of the European Bio-based Economy – nova-Institute’s contribution to the current debate”.

According to the three authors “the best framework would allow for the highest resource efficiency, the most innovation capacity, the highest value added, the most employment and the greatest protection of ecosystems. The current framework creates a non-level playing field between bio-based materials and energy, triggers never-ending discussions about a variety of issues such as land-use change and multiple counting of different biomass sources in quotas, and ultimately hinders Europe’s bio-based economy from tapping into its full potential of innovation, investment and jobs. There are several ways to change this framework”.

With this position paper, nova-Institute’s policy experts contribute to the current debate by assessing and evaluating different options for framework reform. The bioenergy and biofuels sector finds itself in troubled waters; many member states of the EU are not on track to meet the targets set out in the “Renewable Energy Directive (RED)” and investments are stagnating.
Political and public debates focus more on the effects on global food prices, pressure on ecosystems, and direct as well as indirect land-use change, rather than previous growth and future opportunities and investments. This is partly due to the fact that the whole sector (with some exceptions in the wood heating market) is strongly dependent on incentives. If those are reduced, many companies might face bankruptcy and new investments will stop – as can already be witnessed in many member states.

The material use of biomass presents an alternative to energy use. It can create much more added value per tonnes of biomass, innovation, employment and investment and – if done right – can contribute to the economically and ecologically viable future of the European Union. The current framework, however, focuses only on the energy sector in terms of market instruments; bio-based materials and chemicals are only considered in research policies without any widespread application of novel bio-based materials so far.

This is also confirmed by the “Organisation for Economic Co-operation and Development” (OECD 2013): “Generally, biofuels policy support is much greater than it is for either bio-based plastics or bio-based chemicals. This is likely to make the development of the bioeconomy uneven, and may disfavour the use of biomass for bioplastics and bio-based chemicals. It may also constrain the development and operation of integrated biorefineries.”

“It is Time for a Change and a New Start”, Carus, Dammer and Essel say. The number of ways to reform of the existing political framework is limited: “Following Joseph Schumpeter’s theories of technology push and market pull factors, a technology push implies that a new invention is pushed onto the market through research and development (R&D), production and sales functions without proper consideration of whether or not it satisfies a user need. In contrast, an innovation based upon market pull has been developed by the R&D function in response to an identified market need”.

With this position paper (, nova-Institute’s policy experts contribute to the current debate by assessing and evaluating different options for framework reform.

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