Biotechnology has become an integral part of various industrial sectors. This dossier introduces the concept of bioeconomy and gives insight into the economic potential of bio-based industries in Europe and Germany.

1. Bioeconomy as a sustainability and innovation strategy

If you want to take a closer look at the topic of bio-based industry, one has to deal with the term bioeconomy. In short, the bioeconomy refers to those parts of the economy that produce and use biogenic resources and are based on biological knowledge. Biogenic resources include plants, animals and microorganisms, but also organic residues.

Fossil resources such as oil or natural gas, on which industry is still predominantly based, are finite, and their use continues to drive global warming. To meet current global challenges such as climate change, the increasing world population and loss of biodiversity, the raw material base of industry and also the way we do business must change. One contribution to structural change of the economic system towards sustainability can be offered by the bioeconomy.

Since the concept of the Knowledge Based Bio-Economy (KBBE) was first published in Europe in 2005, the vision of the bioeconomy has found its way into the economic and innovation strategies of numerous countries worldwide. According to the Global Bioeconomy Policy Report of 2020, 19 countries worldwide have adopted a dedicated bioeconomy strategy, and 13 or so other countries had signaled that they wanted to create a dedicated bioeconomy strategy. More recent strategies are increasingly aligned with the United Nations' 17 Sustainable Development Goals (SDGs) of 2015.

In Europe, both the EU member states and the European Commission have made far-reaching commitments toward a sustainable bioeconomy. In the EU, the first European bioeconomy strategy was published in 2012. An updated strategy was published in October 2018.

In the definition of the European Commission 2018,  

“the bioeconomy covers all sectors and systems that rely on biological resources (animals, plants, micro-organisms and derived biomass, including organic waste), their functions and principles. It includes and interlinks: land and marine ecosystems and the services they provide; all primary production sectors that use and produce biological resources (agriculture, forestry, fisheries and aquaculture); and all economic and industrial sectors that use biological resources and processes to produce food, feed, bio-based products, energy and services (except biomedicines and health biotechnology)”.

Bio-based resources and processes not only provide solutions that help reduce the use of fossil raw materials. At the same time, they enable scientific and technological advances to be translated into innovative applications that go far beyond replacing petroleum and create added value.

Bioeconomy therefore now plays an essential role in various EU strategies and implementation guidelines and is an integral part of European research funding. It also has a driving role in the development of a circular economy. With the "European Green Deal" adopted in December 2019 as a sustainable growth strategy, Europe aims to become the first greenhouse gas-neutral continent by 2050 - not least through contributions from the bioeconomy.

2. Bioeconomy and bio-based industry in the EU

How big is the bioeconomy in Europe today? Which sectors are particularly relevant? On behalf of the Bio-based Industries Consortium (BIC), the nova-Institut publishes economic data on the macroeconomic effects of the bioeconomy in the European Union. The Eurostat databases serve as a resource. The analysis is based on the industry classification NACE.

Currently, the most recent published figures on the bioeconomy in the EU are for 2018. If the fully bio-based primary sectors of agriculture, forestry and fisheries, and the food and beverage sector are included, turnover in the bioeconomy in the EU member states including the UK amounted to €2.43tn (€2430bn). The primary sector is responsible for 20% of the turnover, while the food and beverage sector is responsible for 50%.

The biobased industries in the narrower sense in the nova study include the biomass-processing sectors of the wood processing industry, bioenergy and biofuels, textile industry, paper industry, chemicals and pastics, and the pharmaceutical industry. Some of these sectors are only partially biobased (such as textiles, chemicals, and pharmaceuticals), so their proportional contribution to sales is based on estimates. According to these estimates, the bio-based industries generated sales of €780bn in 2018. This is about 30% of the total turnover in the EU bioeconomy. The paper industry and the wood processing industry accounted for the largest share of turnover.

The number of employees in the bioeconomy amounted to 18.4 million in 2018. The primary sector - especially agriculture - recorded the largest share here with 54% of the employees in the EU bioeconomy (10 million employees). 4.9 million people were employed in the food and beverage sector. Among the biobased industries in the narrower sense, the wood processing industry is the most important employer, followed by the textile and paper industries.

The European Commission is also strongly committed to partnerships with companies from the bio-based economy. To this end, the public-private partnership "Bio-based Industries Joint Undertaking" (BBI JU) was launched in 2014 with a budget of €3.7bn. Here, public research institutions, small and medium-sized enterprises and industrial groups cooperate along the entire value chain to bring sustainable innovations to market quickly. The initiative will be continued in the future in the Circular Bio-based Europe Joint Undertaking, for which an initial budget of €2bn is available.

3. Bioeconomy in Germany

In Germany, the bioeconomy concept was anchored in the Federal Government's research policy at an early stage. Under the leadership of the Federal Ministry of Education and Research (BMBF), the National Research Strategy Bioeconomy 2030 was launched in 2010. €2.4 bn were invested in bioeconomy research within this framework. It was followed by the National Policy Strategy on the Bioeconomy in 2013, which was prepared under the leadership of the Federal Ministry of Food and Agriculture (BMEL).

As a further milestone, the German Federal Government published the new National Bioeconomy Strategy in January 2020. With this overall strategy, the German government is setting the framework for sustainable development and use of biological resources and for environmentally and nature-friendly production processes in all sectors of the economy. At the same time, the German government is aligning its bioeconomy policy even more closely with the overarching goal of sustainable and climate-neutral development.

According to the definition adopted by the German Federal Government,

bioeconomy refers to the production, exploitation and use of biological resources, processes and systems to provide products, processes and services in all economic sectors within the framework of a sustainable economic system.

Since 2009, an independent expert body – the Bioeconomy Council of the Federal Government of Germany - has been advising the government on the implementation of bioeconomy strategies. Some German federal states have also launched their own bioeconomy strategies and research programs - for example in North Rhine-Westphalia, Baden-Württemberg and Bavaria.

What are the key economic figures for the bioeconomy in Germany? Two different sets of figures provide answers here. The European Commission's Knowledge Centre for Bioeconomy provides figures on the bioeconomy and bio-based sectors for the EU and its member states, compiled by the JRC and the nova-Institute. The latest figures are for 2019 and have been compiled for this dossier.

According to the figures, the sectors relevant to the bioeconomy generated sales of €464bn in 2019. More than half of the turnover was attributable to the food and beverage industry.

A total of 2.17 million people were employed in the bioeconomy in Germany. Three quarters of the employees in the German bioeconomy work in primary production and the food sector.

Further figures on the economic significance have been determined by the German Bioeconomy Monitoring program, which was jointly launched by the three federal ministries of education and research, agriculture and economic affairs. More than a dozen research institutions have developed tools for this purpose that can be used to measure and evaluate a bio-based economy.  According to the "Pilot Report on the monitoring of the German Bioeconomy" published in 2020, about 4.4 million people were employed in the German bioeconomy in 2017, which is about 10% of the total workforce in Germany.

Depending on the delineation of the bioeconomy and the modeling approach, the gross value added in the bioeconomy in 2017 was between €165bn and €265bn. This is just under 6 % of the German gross domestic product. More than two-thirds of the value added is attributable to traditional sectors such as agriculture, forestry, fisheries and aquaculture, wood furniture, paper manufacturing, as well as food, feed and beverage production and the hospitality industry.

4. Spotlight on the chemical industry - bio-based trends

On the way to more sustainable and climate-neutral production processes, biological resources and biotechnological processes are also playing an increasing role in the chemical industry.

The chemical industry currently uses fossil raw materials based on crude oil and natural gas for the vast majority of its production. Biomass as a raw material plays only a minor role (e.g. oleochemicals for surfactants and lubricants, bioplastics, sugar-based surfactants). The total share of biobased raw materials in total raw materials nationwide is estimated at 10 to 15%. According to the German Chemical Industry Association (VCI), 2.6 million tons of renewable raw materials were used in the chemical industry in 2019.

At the same time, in addition to the food industry, the chemical and plastics industries will potentially become the most important consumers of biomass and alternative carbons for the future, for example for the replacement of established raw materials and products (drop-in solutions for existing plants, for example through bionaphtha or biotechnological production) and for new products with their own production routes and properties (bioplastics, organic acids, biosurfactants).

Unlike the energy industry, organic chemistry cannot be "decarbonized" because it relies on carbon for its molecular syntheses. Therefore, it is necessary to develop other renewable carbon sources besides biomass. Here, organic residues and wastes and CO2 from exhaust gases are moving into the focus of research as a resource. One promising approach that can be used biotechnologically is microbial gas fermentation.

Bioplastics on the rise

In the plastics segment, manufacturers are increasingly turning to bio-based alternatives. Currently, around 1% of the plastics produced globally are manufactured on the basis of renewable raw materials. According to figures obtained by European Bioplastics e.V. and nova-Institut, this figure was around 2.4 million tons in 2021. So-called drop-in solutions currently predominate among biobased plastics on the global market. This means that bio-based basic chemicals, which are almost identical in structure to the petroleum-based version, are integrated into the chemical synthesis. However, the resulting plastics, such as bio-polyethylene terephthalate (PET) or bio-polyethylene (PE), are not biodegradable.

In addition to drop-in solutions, novel bio-based plastics are on the rise. One example is polylactic acid (PLA). This bioplastic is created by linking molecules of the microbially produced platform chemical lactic acid. PLA is both biobased and biodegradable and is used in particular in films and packaging.

Biorefineries reach market maturity

The discussion on the establishment of biorefineries also relates primarily to the chemical industry and plastics production. Here, biotechnological and process engineering processes play a central role. Biorefineries are the industrial factories of the bioeconomy. Comparable to a petroleum refinery, here the raw material biomass is broken down into its individual chemical components and utilized. As a rule, the material and energy recovery processes are coupled with each other. This results in a wide range of new materials or biobased chemicals.

Various biorefinery concepts are being researched and commercialized at several locations in Germany, including Leuna (Fraunhofer CBP), Straubing (Clariant demonstration plant) and Aachen (Center for Next Generation Processes and Products (NGP²) at RWTH). The construction of such plants is supported by the EU and the German Federal Ministries of Education and Research, Food and Agriculture, and Economic Affairs and Climate Action.

The Finnish forestry and paper group UPM is building the world's first large-scale industrial biorefinery for the chemical processing of beech wood in Leuna at a cost of €550m. The refinery breaks down waste from sawmills and forestry operations into its constituent sugars and lignin. From the sugars, UPM extracts ethylene glycol, for example, which is used to produce polyester and PET, among other things. In the fall of 2021, Clariant started up a commercial plant in Romania based on the sunliquid process. Up to 250,000 tons of straw will be converted into 50,000 tons of cellulosic ethanol here annually.