Time is running out to reduce greenhouse gas emissions globally. The IPCC recommends that to avoid overshooting the 1.5ºC warming target, greenhouse gas emissions need to be approximately halved from 2019 levels between 2030 and 2035 before approaching net zero by 2050. 1 Yet between 2010 and 2020, global annual emissions increased by nearly 5 per cent. 2 The next decade is therefore critical in addressing climate action.
Meanwhile, demand for materials, food and energy is set to rise across the world, driven by larger and more wealthy populations. Under current trends, the demand for land – for climate and environmental regulation, and for food and for energy crops in particular – is set to grow substantially by 2050. 3 The International Resource Panel estimates that annual global resource extraction has already grown more than three-fold between 1970 and 2017 and would more than double between 2015 and 2060 based on current trends. 4
Attention is growing around the potentially transformational role of sustainable circular bioeconomies to address these multiple environmental challenges. Shifting towards sustainable and circular bioeconomies involves the replacement of fossil inputs by renewable biological sources in a broad range of industries, as well as increased resource efficiency and the reuse and recycling of materials. The bioeconomy also has potential to create new economic opportunities, such as new business formation in rural areas, and to strengthen knowledge-based sectors.5
Exploring the role of the bioeconomy in the materials sector is a growing area of focus given it is one of the hardest areas to decarbonise and is off track for net zero. Producing materials emits lots of greenhouse gases, both from burning fossil fuels, and as a result of chemical processes involved in their creation. Greenhouse gas emissions from material production increased by 120% between 1995 and 2015, reaching 23% of global emissions. 6 The most recent IEA progress assessments conclude that the chemicals, paper, steel, cement, and aluminium sectors are ‘not on track’ to reach net zero emissions by 2050. 7
Bio-based materials and processes could provide low-carbon alternatives for hard-to-abate sectors, including construction, plastics and chemicals. Materials production includes iron and steel, aluminium, other metals, cement, glass, other minerals, wood products and plastic and rubber. Alongside a continued push to drive down the emissions intensity of conventional construction materials such as steel and concrete, pursuing material innovation can speed up the development of low-carbon alternatives. Bio-based construction materials – those made from organic resources such as timber – offer one solution. Bio-based plastics have also seen recent growth in capabilities and performance. For both of these, there are potential unintended consequences, such as land degradation, that need to be closely managed.
Harnessing innovation for sustainable circular bioeconomies
The transition to a sustainable and circular bioeconomy model needs to accelerate. There is very little time for the research, development and scale-up required to bring new materials and technologies to market, build new processing facilities that are integrated into supply chains, and reorganize the ways in which we manage resources.
Encouragingly, technological advances are happening at pace across biological sciences, engineering, digital technologies and more. 8 Bioeconomy-related innovations include new products, such as biopolymers and advanced construction materials, as well as new processes such as optimising bioconversions of feedstocks or digital records to aid material re-use and recovery. 9 10
But many of these emerging innovations remain untested or lack a clear path to market roll-out. It remains to be seen which technologies or sustainable practices, in what locations, will make up the backbone of the bioeconomy. And an important process of analysis needs to take place to provide clarity on how these technologies either help or hinder progress towards wider environmental and social goals.
Addressing social and environmental challenges together
Bioeconomies must be developed in a way that achieves measurable benefits for biodiversity and for communities that live and work on the land, as well as the climate. Accelerating the uptake of bio-based products to meet the urgency of climate action must not be done at the risk of causing adverse outcomes.
Achieving a balance between demands on land for nature, materials, food production and energy will require increasingly ambitious action as pressures on land intensify. Determining the optimal balance is not a simple matter, and careful assessment of potential trade-offs is needed. Without careful policy guardrails, this could lead to unintended disruptions to ecosystem health and biodiversity and could harm the livelihoods of farmers and agricultural workers.
The implementation of nature-based solutions is an important way to tackle social and environmental challenges together. To date, a lack of financial or policy incentives has meant that investment in nature-based solutions has been significantly lower than is needed to really start addressing the global scale of the biodiversity and climate crises. The bioeconomy could help to address this by providing greater cashflow certainty for nature-based solutions and improving the investment prospects for projects.
The need for regional approaches
There is no one approach to scaling and managing bioeconomies – instead, bioeconomy strategies must differ depending on local political, economic and environmental contexts.
Strategies vary between countries, but three broad areas of focus have emerged globally: bioresource, biotechnology and bioecology. 11 Bioeconomy strategies may seek to implement policies or support innovation and investment across each of these areas. And pursuing policy development within one area does not preclude countries also supporting other areas at the same time. For example, a country could announce R&D on biotechnology while also supporting the creation of markets for biodiversity credits.
Bioeconomy focus areas
The development of the bioeconomy must be regionally appropriate. It must reflect the needs of local communities, the environment and workers, as well as working with existing resources such as land and industrial processing capabilities. Even within geographically confined areas, multiple approaches to the bioeconomy can co-exist. For example, the Amazon Concertation, a network of leaders formed in 2020 to create solutions for the conservation and sustainable development of the Amazon region, has highlighted three different bioeconomy approaches at play within the Amazon rainforest basin: socially-focused, to forest stewardship-based and commodity-based. 12
While locally adapted approaches should be encouraged, policymakers also need to consider the international ramifications of restructuring inputs into global supply chains. There are potentially large trade and resource security implications of switching to a bioeconomy model, especially when material extraction is currently concentrated in a small number of countries. The International Resource Panel estimate that 68 per cent of global extraction takes place in only 10 countries. 13
Navigating complexity in the bioeconomy
There is growing momentum around bioeconomy strategies and policy development, but to date, many bioeconomy strategies are missing key elements. The perceived environmental or resource security benefits of switching to bio-based resources as they become economically competitive with fossil-fuel based goods has meant that decision-makers in both business and policy have embedded the bioeconomy into their strategic decisions. Over 50 countries across all continents have developed bioeconomy or bioeconomy-relevant strategies, while regional blocs in the EU, Nordic region and East Africa are promoting an international approach to bioeconomy development. 14 But most of these initiatives currently lack detail on how actions are integrated with new circular business models or their potential impacts on international trade.
Careful navigation will be needed to steer the bioeconomy transformation. Tensions are present around how to maximize the environmental, economic and social benefits and minimize any potential negative outcomes or trade-offs. For example, bioplastics production could increase competition for different land uses and potentially have a negative effect on biodiversity.15
Clarity is now needed over the types of policy and investment pathways that are consistent with the development of bioeconomies that address a complex array of environmental, economic or social risks. The scale of the transition works both to amplify the potential benefits and to compound the possible risks. All the more care is needed because business-as-usual trends in resource consumption currently point upwards. This underlines the importance of calls to embed circular practices into bioeconomy business models – removing the need to meet demand for resources with more extraction.
A systemic approach needs to be taken when developing bioeconomy policies. Supply-side and demand-side measures need to be balanced across different sectors, including food, energy and materials. There are multiple interconnections between these sectors, for example new innovations in the bioeconomy may require new material inputs, may be energy intensive, or may increase competition for land, resulting in land degradation and dispossession. But there are also many potential positive synergies, such as use of by-products and also opportunities to align regulatory and market incentives to enable uptake across multiple sectors at once. 16
To help manage these complexities, trusted platforms are needed for multi-stakeholder coordination among policymakers, the private sector and civil society. These are especially needed within and between those countries that are most likely to be at the forefront of the bioeconomy transition, including major consumers and producers of bio-based products.
Above all, policymakers must remember that the bioeconomy is not an end in itself, but a means to address some of largest environmental and social issues of our time.