EU leaders should see bio-based industries as fuel for recovery

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The contribution of agriculture and the EU’s Horizon 2020 research strategy to green growth and job creation should feature high on the agenda when EU leaders discuss the long-term budget this week, argue Steen Riisgaard and Guido Ghisolfi.

Steen Riisgaard is president and chief executive of Denmark-based biotech company Novozymes, the world's largest producer of industrial enzymes. Guido Ghisolfi, President and CEO of Beta renewables, the leader in making non-food cellulosic biomass practical and cost-competitive for the production of advanced biofuels and biochemical.

Financial recovery is quite rightly Europe’s number one priority at the moment. Yet, as European leaders gather in Brussels this week to discuss the EU budget against the backdrop of the escalating crisis, they would do well to realise that they actually have a golden opportunity to kick-start an innovative and competitive economy by harnessing waste and plant residues.

Known as the bio-based economy, this exciting alternative also has the potential to help resolve another severe crisis facing Europe, the scarcity of vital resources and the stress that our consumption of fossil fuels is putting on our climate. The bio-based economy utilises residues from the agriculture, forestry and waste sectors as resources to produce feed, fuel, materials and products, ranging from advanced biofuels to bioplastics. It blends the use of innovative technologies with an abundant resource that is renewable and home-grown. 

Europe’s leaders will be aware that in the coming years all major policy areas and related public expenditures must give priority to creating jobs, reviving the economy, and stimulating green, sustainable growth. The Common Agricultural Policy (CAP) is a prime example, given that it has long been exposed to the twin challenges of financial and environmental sustainability.

The CAP reform that is currently under way must launch a genuine transformation fromcostly, addictive subsidies to lasting added value.  Equally, Horizon 2020 must bridge the gap between research and the market so that fruits of EU’s R&D funding are harvested in Europe rather than elsewhere. The contribution of the CAP and the EU’s Horizon 2020 research strategy to green growth and job creation should therefore feature high on the agenda when the EU heads of state and governments discuss the budget this week.

The good news is that European agriculture and forestry have enormous potential to deliver growth, jobs, greening and innovation. In addition, a bio-based economy will help create new sources of income for our farmers and foresters as well as revive our rural communities and strengthen our manufacturing base.

In this way, agriculture, far from being a burden on our economy and the environment, provides an opportunity to meet the EU 2020 objectives.

Our farmers have the potential for becoming key drivers of a positive bio-based vision where food production and bio-based products go hand in hand. The farmers can become an integral part of the solution to Europe’s economic and environmental woes. They could take centre-stage as rural entrepreneurs and deliver on the widely endorsed objective of “innovating” and “greening” the CAP by carving out new revenue streams from residues and reduce the unsustainable dependency on tax-payers money.

As for Horizon 2020, its new focus on innovation is key to bringing new technologies to the market.  The possibility to create new partnerships between the private sector and member states to bring together the resources needed for upscaling and deployment can help the EU objective of  becoming a bio-based economy. By involving all actors of the bio-based value chain, a public private partnership on bio-based industries can deliver growth and jobs in Europe by 2020.

Designing a CAP and a Horizon 2020 that incentivise the bio-transformation of the economy takes vision. This would, however, be a vision and an investment that could bring a rapid pay-back for both European farmers and the economy as a whole. As an example, bio-based industries have already committed to invest €2.8 bn in research and innovation by 2020, nearly three times more than what the public contribution would be in the public private partnership. We believe such a leverage effect is what Europe is looking for to kick-start growth.

To harness the potential, however, Europe must ensure policy coherence and connect the relevant  policy dots: the CAP to incentivise supply and processing of agricultural residues and waste; Horizon 2020 to support new value chains and industrial scale biorefineries; renewable energy policy to provide stable and long-term policy frameworks for advanced biofuels; industrial policy to build green markets and support performance standards; and structural funds to invest in rural green infrastructure and innovation. 

One thing is clear: with the ongoing eurozone crisis and difficult budget negotiations, our agricultural and innovation policies cannot continue unchanged. Innovation to optimise land use by unlocking the potential of waste and residues and to launch a sustainable and competitive bio-based economy is one of the keys to ensuring sustainable growth and tackling the challenge of producing more while polluting less. Visionary thinking from EU leaders is needed to make the right choices and to invest today in the solutions of tomorrow. No backsliding!

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