“The bioeconomy can be a catalyst for sustainable systematic change and transition, tackling key economic, societal and environmental challenges”. To say it – in this exclusive interview with Il Bioeconomista – is Nicolò Giacomuzzi-Moore, Executive Director ad interim of CBE JU, Circular Bio-based Europe Joint Undertaking.
Interview by Mario Bonaccorso
Mr Giacomuzzi-Moore, the European Green Deal only briefly mentions the bioeconomy and strongly focuses on circular economy. From your point of view, is there a real awareness in Brussels of the importance of the bioeconomy for the sustainable development of the planet?
The EU has been a pioneer in the bioeconomy and the awareness of the bioeconomy potential is growing in time, and it is showing a promising future for its role in key policy initiatives at European level. The notion of the bioeconomy itself has been mostly driven by the EU, dating as far back as 2005 when the concept of a “Knowledge Based Bio-Economy” first emerged and paved the way for almost two decades of EU bioeconomy research and policy actions.
It is widely recognised that a circular and sustainable bioeconomy has the potential to contribute to all dimensions and objectives of the European Green Deal. For example, in terms of generating carbon savings when it comes to the Climate Pact and Climate Law, greening industrial processes and increasing resource efficiency, reducing fertiliser and pesticide use and risk as outlined in the Farm to Fork Strategy, ensuring a Just Transition through its potential to create new green jobs in rural and coastal areas, enhancing biodiversity, to name but a few aspects.
The illegal invasion of Ukraine by Russia marked another significant turning point in the recognition of the role the bioeconomy in Europe’s energy interdependence and food security. It emphasised the urgency for the EU to reduce its dependency on fossil-based resources and examine our reliance on strategic imports.
In April of this year, EU Agriculture and Fisheries Ministers adopted Council Conclusions on the opportunities of the bioeconomy in light of the current challenges the world is facing. The sector was recognised by Ministers as playing a key role in achieving the environmental and climate goals under the European Green Deal, while also making the EU more competitive and supporting the transition away from fossil-resource dependency.
More recently, in her 2023 State of the Union address, European Commission President von der Leyen announced an EU biotech and biomanufacturing initiative to be published in the first quarter of 2024, under the Commission priority of “An Economy that Works for People”. This is a very promising development and highlights an increasing recognition of the bioeconomy and the bio-based sector.
On the other side of the Atlantic Ocean, the Biden Administration presented the Advanced Biotechnology and Biomanufacturing Executive Order to provide opportunities to grow the US economy and workforce and improve quality of lives and the environment. What lessons can Europe learn from the United States?
It is encouraging to see major global players like the United States recognising the contribution the bioeconomy and the bio-based sector can make to a sustainable low-carbon economy. If we are to achieve the ambitious goals under the European Green Deal and mitigate the effects of climate change, then there needs to be a shift towards a global bioeconomy.
The focus on public-private collaboration within the Executive Order is a key aspect of interest, as we have seen through the CBE JU’s predecessor, the Bio-based Industries Joint Undertaking, and the current partnership the effect this collaboration can have in bringing innovation to the market, leveraging public funding, organising value chains across sectors, and the innovation-driven mobilising effect of key stakeholders.
Another important feature of the Executive Order is that of the “whole-of-government” approach to foster innovative solutions across health, climate change, energy, food security, agriculture, the supply chain and national and economic security. Coordination across different policy areas will aid in providing a coherent regulatory framework, pair that with a $2 billion-dollar financial support, will reinforce the relevance of private investment in the bioeconomy and bio-based activities. This is perceived as a turn in US industrial policy towards the bioeconomy and biobased solutions that should be a source of inspiration for future EU policies.
What are the obstacles still present in the EU on the road to the full realization of a sustainable and circular bioeconomy?
In 2022, we celebrated the 10th anniversary of the first EU Bioeconomy Strategy. A lot has been achieved during this short period of time, and the 2022 Bioeconomy Strategy Progress Report confirms positive trends in key areas.
Despite this progress, challenges and obstacles remain which are hindering the sector in reaching its full potential. Access to finance remains a key challenge. The current geopolitical crises have seen private funding plummet due to investor uncertainty. Bio-based activities continue to be deemed very risky and requiring large investment which means companies face challenges in terms of scaling-up and bringing innovative products and solutions to the market. In addition to the inflationary effects on energy and feedstock prices, the cost of accessing capital has also increased putting many companies under increasing financial pressure or has resulted in companies delaying investment decisions which has an impact on research and innovation activities.
The reliability of feedstock supply is another challenge, especially as we see the effects of climate change on agricultural yields for example (e.g., flooding, drought). The development and deployment of biorefineries will depend heavily on the profit margins of bio-based products and the successful development and commercialisation of new technologies. The availability of local and/or regional feedstock at competitive prices together with suitable infrastructure including logistics will play a key part in realising the full potential of the European bioeconomy.
The 2022 Progress Report also highlighted the large gap between the current cost of bio-based products and the willingness of consumers to pay. A level playing field needs to be established when it comes to bio-based products competing with their fossil-based counterparts. More work still needs to be undertaken on the narrative when it comes to the story of the bioeconomy and bio-based products, in terms of consumer awareness and education. A number of CBE JU funded projects are working on this goal.
What changes are absolutely needed now for the EU bioeconomy, from your point of view?
The bioeconomy is a cross sectorial and holistic concept that can contribute to many of the challenges we face today. In this regard, I reiterate the call of EU agricultural and fisheries ministers by saying that if we are committed to realising the full potential of the bioeconomy we need to better integrate the bioeconomy in all policy areas and ensure coherent and effective policies that support the development of the bioeconomy across the whole value chain and enable taking advantage of the solutions it provides. An effective step could be to fully integrate the bioeconomy and the circular economy in a renewed industrial strategy aiming at competitiveness and growth, achieving the green and fair transition.
This would have a positive impact in supporting the scaling up for promising research and innovation. Europe has long been recognised as a leader in the field of research and innovation, but what we see is that the commercialisation of that research and innovation is happening elsewhere. It is therefore crucial to develop a predictive and supportive regulatory framework to encourage and provide the necessary confidence for private investment in new technologies and bring them to the market.
To continue on the aspect of investment, there needs to be more synergies with other sources of funding. Investment gaps remain especially for the funding when it comes to upscaling or commercialising up to TRL 8-9, or it is not targeted for bio-based investments.
The twin green and digital transitions are opening up new opportunities for the workforce and the EU economy. If we are to realise the full potential of the bioeconomy there is a need to further develop accessible bioeconomy related education systems, including vocational training. In view of this need, and to support the European Year of Skills, CBE JU launched a call for project proposals dedicated to supporting activities for the New European Bauhaus Academy. The objective of the call was to support the preparation and establishment of a training network for the reskilling and upskilling of workers and to promote bio-based solutions in the constructions sector.
How is CBE JU impacting the EU bioeconomy?
CBE JU is building on the success of its predecessor, the Bio-based Industries Joint Undertaking, which contributed to positioning Europe as the world’s leader in the bioeconomy.
Projects funded under the BBI JU initiative have successfully shown that that the public-private partnership model has had two major positive impacts: the first being the structuring effect in organising value chains across sectors, while the second is that of the innovation-driven mobilising effect of key stakeholders. These aspects have been essential in maximising new investments and creating jobs which have contributed to making Europe an attractive area to invest in the bioeconomy. CBE JU is taking these achievements to the next level and placing sustainability at the heart of the initiative, while addressing the remaining challenges in the sector.
As mentioned, access to finance remains a challenge and it is in here that we see that the EU public-private partnership model of CBE JU is having a clear impact. The CBE JU funding to projects facilitates their success in obtaining additional private funding, therefore de-risking investment in the sector. This aspect becomes particularly important when start-ups and SMEs are ready to scale up their technologies and seek access to the market.
Another significant aspect is that of the leverage effect the Joint Undertaking is having on the EU bioeconomy. In times of increasing priorities for public funding and plummeting private investment due to current geopolitical crises, the ability of the CBE JU public-private partnership model to attract private investment and multiply the effect of public funding is key. In 2022, the expected leverage effect of the Joint Undertaking initiative climbed to €2.80 euro. What does that mean in concrete terms? By 2024, for each euro of EU funding, industry will have contributed almost three times more in terms of investments and in-kind contributions.
The initiative is also delivering important socio-economic impacts. For example, the first 14 Flagship biorefineries to have received funding will generate more than 3,500 direct and more than 10,000 indirect jobs in predominantly rural and coastal areas. It is supporting primary producers such as European farmers in diversifying their income thus contributing to rural development. Funded projects report a 74% increase in cooperation between academia and industry, as well as across regions and countries, which would not otherwise happen.[1]
CBE JU is organizing a Stakeholder Forum, which will be held in Brussels on December 6-7. What are your expectations for this event?
This will be the first Stakeholder Forum for CBE JU in which we aim to gather 600 bioeconomy stakeholders to discuss the overarching theme of “What next for the European bio-based sector?”.
During the 1 ½ day event, we expect to welcome a diverse stakeholder community ranging from primary producers and industry (from SMEs to multinationals), as well as researchers and policymakers representing the regional, national and EU levels.
The Forum will have a forward looking perspective and will focus on three main questions that are crucial for the successful deployment of the circular bio-based sector across Europe: How to stimulate demand for circular bio-based solutions? How to facilitate access to finance to scale up circular bio-based production in Europe? and What R&I do we need to keep the European leadership in bio-based sector in the medium-long term?.
I would like to emphasise that this is a Stakeholder Forum, so while we have a great line-up of speakers confirmed, we are actively encouraging participants to engage during the discussions. We want to hear the views and opinions of the stakeholders who form the EU bioeconomy community. It is important that we listen to their experiences and perspectives, understand the challenges they are facing, highlight the opportunities for the sector, etc.
The CBE JU Stakeholder Forum comes at an opportune moment, especially in light of the upcoming EU biotech and biomanufacturing initiative recently announced by European Commission President von der Leyen in her 2023 State of the Union address. Furthermore, in 2024 we will have European elections as well as a change in administration within the European Commission, it is therefore important that stakeholders share their opinions on the vision of the bioeconomy in the future Commission mandate.
I therefore encourage your readers to register for this timely event and, together with my team, I look forward to seeing you all in Brussels on 6-7 December next.
The world is grappling with one of the worst crises since the Second World War: the war in Ukraine, that you mentioned before, the war in the Middle East, etc. What role can the circular bioeconomy play in this terrifying scenario?
These turbulent times of conflict and change call for Europe to be even more resilient to increasing instabilities and risks. What role can the bioeconomy play in this period of increasing uncertainty?
The bioeconomy can be a catalyst for sustainable systematic change and transition, tackling key economic, societal and environmental challenges. The bioeconomy can play a fundamental role in ensuring the EU’s open strategic autonomy through the creation of local supply chains, foster resilience of our economies, creation of new high skilled green jobs as well as maintaining technological leadership all while boosting the EU’s competitiveness.
[1] BBI JU impacts publication
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