An interview with Marc Palahi, director of EFI: An ambitious bioeconomy strategy is needed


Marc Palahi, Director of the European Forest Institute

“An ambitious bioeconomy strategy for Europe is needed. A strategy that coordinates the significant policy instruments relevant for it, including research and education, public procurement, infrastructure planning and development, and creates incentives for investors and businesses to lead the change towards a bio-based economy”. Marc Palahi, director of the European Forest Institute (EFI) talks to Il Bioeconomista. In this exclusive interview, he talks about bioeconomy and circular economy, Brexit and Donald Trump, the role of mass media and much more. And he launches also the second edition of the EU Bioeconomy Investment Summit, which will be held on 14 December in Helsinki (Finland).

Interview by Mario Bonaccorso

In what way, from your point of view, the Brexit and the election of Donald Trump in the US will be able to have influence on the development of the European bioeconomy?

Difficult question to answer. But still I would like to reflect a bit more indirectly about it. Sure, there are many reasons to explain why Brexit and the election of Donald Trump happened. But certainly one is the feeling of many citizens in western societies that there is increasing socio-economic inequality resulting from globalization and technology development. And inequality especially affecting the reduction of wealth and economic opportunities of “traditional” industrial and rural areas. The paradox is that we are witnessing the most rapid expansion of the middle class, at a global level, that the world has ever seen. However, this expansion is mainly taking place in Asia, while in the US (and some parts of Europe), spending by the rich already exceeds spending by the middle class, reflecting an increasingly skewed distribution of income towards the top 1 percent of households. This means developed western economies are in need of strategies and plans to enhance inclusive growth while meeting other important global challenges like climate change.

In this context, the bioeconomy can offer potential opportunities. A bioeconomy is based on the sustainable transformation of biological resources like forests or agricultural systems, into bioproducts and services that can replace those generated by the traditional fossil-based economy. Therefore, it uses and transforms biological resources instead of fossil resources. The distribution, ownership (e.g., 16 million forest owners in Europe) and characteristics of biological sources when compared to fossil resources offers high potential for inclusive economic development and jobs in rural areas. For instance, the transportation and infrastructures (e.g., biorefineries) required for the processing and conversion of biomass, even if it presents some challenges, also allows strategic territorial development (transport, energy, communication, high-speed internet) in rural and industrial areas that are currently declining. This is not only due to the establishment of new biorefineries but also due to the potential for attracting SMEs around them. A good example for this is the Metsä Group bioproduct mill in Äänekoski in Finland, which plans to offers space and business cooperation for SMEs to develop an ecosystem that fosters innovation and partnerships between different companies and the biorefinery. Another good example that shows the potential of the bioeconomy in revitalising rural areas comes from Novamont. Their business model is based on the reconversion of industrial sites that are no longer competitive to create innovative biorefineries, which are fully integrated in their local areas.

Today it seems that the bioeconomy paradigm has been surpassed by the circular economy, although the latter is in many ways still fossil-based. As far as you’re concerned, how could we fully integrate these two paradigms? Do you believe the European bioeconomy needs a personality like Ellen McArthur? Do you have any suggestion?

First of all, Europe needs to recognise that addressing the unprecedented global challenges we are facing – increasing demand for food, water, materials, energy while mitigating and adapting to climate change and reversing biodiversity loss – requires a new economic paradigm. A new paradigm that lays the basis for a sustainable economy within the boundaries of our planet. In my view this new paradigm needs to be built bringing two concepts which have so far developed in parallel: the bioeconomy and the circular economy.

A circular economy, as defined by the Ellen MacArthur Foundation, is “one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles”. The bioeconomy, based on the sustainable use of renewable biological resources, offers the possibility to substitute fossil-based and non-renewable materials with renewable bio-based solutions. Bio-based solutions reduce the impact of climate change compared to fossil-based options, can more easily increase resource security aspects and by nature are more easily regenerative and restorative. A bio-based economy, due to its renewable basis, can more easily follow circular principles – while circular principles make a bioeconomy more effective and sustainable, and therefore allow it to unlock its potential to become mainstream. I believe it is time to combine the two concepts strategically in order to create a new European economic paradigm: a circular bio-based economy.

Regarding the need or not for a personality to lead the bioeconomy narrative, leadership is always welcome! But since both you and me come from a football culture, I would challenge you to create a European team of bioeconomy players: you need 11 top players.

At EFI we are lucky to have two former Prime Ministers, Esko Aho and Göran Persson, working with us on the bioeconomy. This year also the former Commissioner Janez Potočnik and the former Spanish Minister of the Environment, Cristina Narbona, will join them to form a steering group for a new EFI report on the future of the bioeconomy.

What is needed to give a definite acceleration to the bioeconomy in the Old Continent?

Unlocking the potential of the bioeconomy requires better connections with existing and emerging policies (in fact, the bioeconomy can act well as a bridge across different policy areas: CAP, climate, research, biodiversity, industry). In particular, a clear strategic linkage with the circular economy, as mentioned above, is key. But to realise this potential, we need political leadership and vision to create the right enabling environment to transform the bioeconomy from a research and technological reality into the main economic reality in Europe.

In this context, an ambitious bioeconomy strategy for Europe is needed. A strategy that coordinates the significant policy instruments relevant for it, including research and education, public procurement, infrastructure planning and development, and creates incentives for investors and businesses to lead the change towards a bio-based economy. And we cannot forget that we need the right narrative to reach the highly urbanised society in which we live. The media has a crucial role to play here, in combination with scientists.

The topic of investments to promote the scale-up of technologies, the growth of startups and new pilots and demonstration plants is essential. It was discussed far in November 2015 at the Bioeconomy Investment Summit in Brussels. What progress has been made from your point of view?

Yes, I believe real progress has been made in recent years. The Bio-Based Industries Joint Undertaking Public-Private Partnership, which started in 2014 and is expected to mobilise €3.7 billion in new industry innovations by 2020, is the best example. However, transforming the bioeconomy from the existing research and technological reality into an economic reality for Europe needs investments at a totally different scale. The scale of investment that has already taken place in the renewable energy sector should also happen in the coming decade within the bioeconomy, in order for it to become a reality. It is also important that investments are not only needed to develop new biorefineries and technological capacities. Investments directed to the sustainable development and improvement of urban infrastructures (buildings, transport, etc) that can help mitigate and adapt to climate change can provide important traction for unlocking the bioeconomy. For instance, the massive use of wood construction instead of steel and concrete will make cities more energy efficient and substantially reduce their carbon footprint, while stimulating smart business which connects to rural areas via sustainable and inclusive paths.

Finally, several significant targeted bioeconomy investments are taking place in Europe: the new Bioproduct Mill by Metsä Fibre in Äänekoski (Finland), the recent cooperation between BASF and Avantium on bio-based PEF bottles plus the financial investments between Italian and French companies (Bio-on, Cristal Union and Eridania Sadam) to create production facilities for bio-based PHAs as a base for bioplastics. So there is hope!

Finland is celebrating the 100th anniversary of its independence. What special events affecting the bio-economy are planned?

The European Forest Institute will organize a Bioeconomy Investment Summit on 14 December in Helsinki. I believe that this event will be a turning point regarding the understanding of the potential of the bioeconomy and on how to mobilize investments to unlock that potential, including the right policy environment. The event will bring together high-level investors, policy-makers, companies and scientists from Europe and globally. The Bioeconomy Investment Summit has broad support as it is organized in cooperation with the European Commission, the City of Joensuu, the European Investment Bank and the Nordic Investment Bank, the Bio-based Industries Joint Undertaking and several Finnish organizations like Luke, Metsä Group, Stora Enso and UPM. I advise those interested to mark the date in their calendars!!

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