An investment of one euro in 2010 will generate a return of 10 euro in 2025. An investment of 35,000 euro into research and development over the same time frame will create one full-time job. This is the tremendous growth potential offered by the bioeconomy in the European Union, according to estimates by the European Commission made public in 2012 upon the launch of its strategy \u201cInnovating for Sustainable Growth: A Bioeconomy for Europe.\u201d<\/p>\n
From such perspective, the recipe for economic growth in the next few decades seems obvious: invest in the bioeconomy. But, for a European Union still in the grip of the most severe economic-financial crisis in history and a policy of austerity that leaves little room for manoeuvre, the primary issue is finding the money to invest \u2013 within a defined strategy that is eco-friendly and avoids needless waste, wherever possible.<\/p>\n
So, there\u2019s really only one simple question: Where is the money? The answer, however, is not so simple, because to understand how to finance the bioeconomy one must wade into a sea of programs, funds, and public-private partnerships.<\/p>\n
Let us proceed in order, then. First, there is the European Commission\u2019s Horizon 2020 programme, which puts more than 70 billion euro on the table for research and innovation from 2014-2020. Another 80-100 billion euro will be invested in infrastructure, logistics, and the so-called drivers of innovation through the European Regional Development Fund. Yet another 70 billion euro from the European Social Fund will be devoted to investments in innovation and social integration, employment services, ongoing education, and entrepreneurial development. More than 100 billion euro will be made available for rural areas from the European Agricultural Fund for Rural Development, and for marine and aquatic investment from the European Maritime and Fisheries Fund. Finally, 66 billion will be available for environmental initiatives and the creation of trans-European transportation networks. Overall, approximately 400 billion euro.<\/p>\n
These structural funds are joined by the \u201cBio-Based Industries Joint Undertaking,\u201d a public-private partnership that from 2014-2020 forecasts an investment in the biobased manufacturing sector of roughly 3.7 billion euro. Of these, 975 million will be made available by the EU, out of Horizon 2020 funds, while the BIC (the Bio-Based Industries Consortium of related businesses) will contribute 2.73 million euro.<\/p>\n
Having said that, in this initial phase the partnership is currently funding ten programmes: seven in the research stage, two in demo, and one flagship project. The latter is called First2Run, coordinated by Novamont, the only company so far to have been allocated funds. Last June, the BIC assigned the project, a collaboration with four businesses and one university, some 17 million euro in block grants.<\/p>\n
The project is designed to demonstrate the technological, economic, and environmental sustainability of a highly innovative integrated bio-refinery, in which low-input oilseed cultures (like thistle) cultivated in arid and\/or marginal zones are used for the extraction of vegetable oils to be converted through chemical processes into bio-monomers (principally pelargonic and azelaic acids) and esters for the creation of bioproducts including biolubricants, cosmetics, plasticisers and bioplastics. The by-products of the manufacturing process will be used in the production of animal feed, other value-added chemicals, and energy from scraps to maximize the sustainability of the value chain.<\/p>\n
Standardisation, certification, and dissemination of the results will be key parts of the project, along with a study of the social impact of the products derived from renewable resources. The project supports the redevelopment of existing industrial plants and to date has received investments from private partners totalling more than 300 million euro.<\/p>\n
The Bio-Based Industries Joint Undertaking was formed by its partners to create jobs, particularly in rural areas, offering European citizens new, sustainable and locally-made products. Biobased industries will increase the competitiveness of EU countries through re-industrialization and sustainable growth, with the generation of new value chains through the interconnectivity of various sectors.<\/p>\n
Growth and Sustainability at the Heart of the Juncker Plan<\/p>\n
Economic growth, environmental sustainability, and job creation are precisely the same objectives declared by the President of the European Commission, Jean-Claude Juncker, upon his inauguration. To achieve these ambitious goals the Commission presented its Investment Plan for Europe in Strasbourg on 26 November 2014. The so-called Juncker Plan is articulated in three directions: 1) the establishment of a European Fund for Strategic Investment (EFSI); 2) the creation of a reserve of viable projects and a program to support direct investment of funds where they are most needed; 3) the drafting of a program to make Europe more attractive to investors and remove regulatory bottlenecks.<\/p>\n
The EFSI will be endowed with 21 billion euro: 16 guaranteed by the EU budget and 5 by the European Investment Bank (EIB). Based on conservative estimates drawn from historical experience, it is forecast that the Fund will unlock investments with a leverage effect equal to 15 times its initial endowment: at least 315 billion euro in 2015-2017. The basic concept is that the initial impulse provided by the Fund will mobilize the liquidity that is already present in the financial system but not currently being used for investment because of the uncertain economic climate.<\/p>\n
In addition to the resources created by the EFSI, 20-35 billion euro in investment could be injected into the real economy by maximizing the leverage of structural funds and European investments from 2014-2020.<\/p>\n
Last June, the EU Commission signed an agreement with the European Bank for the investments to establish and govern the Fund, confirming in its guidelines for national contributions that national promotional banks (NPBs) will serve as platforms for investment and co-financing, which will be excluded from deficit calculations as a one-time exception. To date, nine countries have decided to set up an NPB: Italy, France, Germany, Poland, Great Britain, Spain, Luxembourg, Bulgaria, and Slovakia. It was also confirmed that financing through the EFSI will not be considered state aid, while the co-financing activities of member states will undergo assessment, albeit through a fast-track process that aims to complete everything within six weeks. The European Parliament has been entrusted with oversight and supervision, along with the European Court of Auditors (ECA).<\/p>\n
But how will all of this affect the bioeconomy? According to John Bell, the European Commission\u2019s director of the Bioeconomy Directorate, \u201cthe EFSI fund is also available for investments in the bioeconomy, and thus provides for substantial opportunities in addition to the funding available for the Bioeconomy via Horizon 2020.\u201d Bell adds that, \u201cas part of the investment plan also an ambitious roadmap will be implemented to make Europe more attractive for investment and remove regulatory bottlenecks.\u201d<\/p>\n
Brussels\u2019 challenge is to maintain legislative simplicity, not doing more than is strictly necessary to achieve its political objectives, and to avoid superimposing several different levels of regulation.<\/p>\n
To surpass this challenge it has come up with REFIT (the Regulatory Fitness and Performance Programme), which works to define a clear, stable, and predictable regulatory framework for workers, businesses, and citizens. Just as representatives of European industry have repeatedly requested. Under REFIT, the Commission will review its entire legislative corpus on a rolling basis to identify regulatory burdens, conflicts, and inefficiencies, as well as the appropriate corrective measures. Some of the sectors of interest in the bioeconomy that have already undertaken REFIT protocols include waste legislation and food safety.<\/p>\n
A Simpler and More Logical Regulatory Framework is Needed<\/p>\n
The European strategy entails financing for the bioeconomy on one side, and on the other the creation of a simple, stable, and predictable regulatory framework to attract those investments that experts say have recently been flowing toward the United States, India, and China.<\/p>\n
It is in this context that the Bioeconomy Investment Summit convened by the European Commission is set to take place in Brussels from 9-10 November.<\/p>\n
\u201cThis will be an opportunity to set out a high-level agenda for further investment in the bioeconomy,\u201d Bell argues. \u201cThe aim of the event is to create political momentum and consensus in the Commission and where possible in member states for the necessary policy and regulatory decisions that will encourage investment in innovation in the bioeconomy.\u201d Which in turn should help to better realise the potential of the bioeconomy to create new jobs and economic growth, including in rural and coastal areas.<\/p>\n","protected":false},"excerpt":{"rendered":"
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