Market Creation is Key to the Success of the Bioeconomy

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Following the updated Bioeconomy Strategy from end of last year, Europe has taken active steps to create a supportive system for industrial scaling of the bioeconomy. A critical component of this effort is establishing viable markets for bio-based products, particularly as long as direct competition with established fossil-based alternatives remains highly challenging. This article provides on the effectiveness of quotas, or content-targets, to facilitate systemic build-up of the bioeconomy.

While the development of cultivated area for energy crops shows a strong increase in the two decades between 1998-2018 before entering a stagnation level, the use of agricultural biomass for chemicals and materials is significantly lower today than in the peak year of 1999. Between 1999 and 2025, there were only some fluctuations, partly due to time-limited funding programmes, e.g. for insulation materials – despite several attempts to foster the use of biomass in chemicals and materials within the frame of bioeconomy strategies and initiatives.

What is the reason for the very different developments, that energy crops increased fivefold between 1994 and 2025, while industrial crops remained at the same level as in 1994? The key driver appears to be market demand creation via quotas.

The ongoing discussion in Brussels on introducing a bio-based content target for plastics in packaging under the PPWR (DG ENV) is particularly noteworthy. If adopted, it would represent the first demand-side measure of its kind for bio-based plastics in Europe and could provide an important signal for market development. By creating predictable demand, such a measure could encourage e.g. packaging companies and other value-chain players to identify and adopt suitable bio-based solutions, thereby supporting investment, production scale-up and innovation across the value chain. Similar demand-side instruments may also be considered for additional sectors in the context of the forthcoming Biotech Act II.

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