The concept of a bio-based economy is gaining traction in Europe.
Last month, EU Innovation Commissioner Máire Geoghegan-Quinn announced that the European Commission would present a bio-economy strategy in autumn 2011.
At the centre of the concept are bio-refineries. These are industrial plants which use renewable raw materials to produce biofuels and bio-based products used in chemicals, plastics, pharmaceuticals, cosmetics and paints.
Biorefineries aim to maximise the use of all components of biomass and in the process also produce heat and electricity through combined heat and power (CHP) technology.
Biorefineries are set to compete with traditional oil refineries, which process crude oil into fuels and petrochemicals that can be used to manufacture products ranging from plastics, fibres and detergents to drugs and fertilisers.
In France, for instance, around 7% of raw materials used by the chemicals industry are renewable. But the industry has pledged to increase this to 15% by 2017.
The arguments for biorefineries are compelling: they will help Europe cut greenhouse gas emissions while decreasing its dependence on imported fuels, and foster rural development by creating more jobs at local level. But until they start using non-food feedstocks like agricultural and forest residues, municipal solid waste and industrial wastes, they will compete for raw materials with the food industry.
Fully-fledged biorefineries are yet to be realised as the vast majority of the facilities currently in operation use first-generation technologies to produce either biofuels or chemicals from food crops like corn, wheat, sugar beet and sugar cane.
Production of biofuels from lignocellulosic biomass, which is inedible plant material, is only at the pilot stage, and biorefineries are unlikely to be fully demonstrated by 2015, according to the European Commission.
Growing gap between EU and US
The industry is gearing up to deploy second-generation biotechnology, but concerns are being voiced that Europe will end up playing second fiddle to the US, which is putting in place more aggressive policies to support bioindustries.
"We will eventually get to a situation where we use stems, leaves, agricultural residues and maybe even non-food crops to produce bioethanol. That's the real promise for the future," said Volkert Claassen, vice-president of White Biotechnology at DSM, a Dutch chemical firm.
Claassen said that cellulosic bioethanol will become available in one or two years but not in the commercially required quantities yet: that will take a few more years. "But it's no longer the case that the technology is the limiting factor," he said.
The issue is rather a lack of political support in Europe for commercialising biotechnologies, the industry says. While a lot of research is done in Europe, the lack of incentives leads to a perverse situation where many technologies paid for by Europe are in fact deployed in the US.
"At the European level, we find it sometimes hard to see the consistency and commitments that we see in the US, where it is mandatory for all petrol producers to blend advanced biofuels into petrochemically-derived petrol and where there are heavy subsidies for biofuel made from 2nd generation feedstocks," said Claassen.
Similarly, Nathalie Moll, secretary-general of EuropaBio, which represents European bioindustries, pointed out that demonstration plants are needed to transform research into products. But the US is doing a better job in creating a much more appetising business environment for biorefineries, she warned.
"There's no public financing for demonstration projects at the same level that there is in the US," said Moll. Although some member states occasionally put in some money, Europe's lack of a dedicated programme contrasts with significant capital at state-level in the US for demonstration plants, she said.
"The companies exist in the EU. A lot of innovation, technology is in the EU, but when it comes to the business part, to the marketing part, the products part, they migrate to the US because they get demonstration plants and earn incentives over there," Moll argued.
France in the running
As an example of an effort to commercialise bio-based products, DSM and French starch company Roquette Frères last summer announced a joint venture to develop bio-succinic acid, a chemical building block used to manufacture polymers, resins and other products.
The two companies hope to produce a more sustainable product that will soon become economically attractive as oil prices keep rising.
The product is currently manufactured in tonne quantities at a demonstration plant in Lestrem, Northern France. The companies are preparing to take a decision on large-scale manufacturing by the end of the year, pending regulatory approvals.