The Bioeconomy, the Clean Industrial Deal’s 5th strategic sector

The Bioeconomy is identified in the Clean Industrial Deal Communication strategy as one of five key sectors poised to drive investment and mobilise capital towards a clean and competitive industry. This positions us alongside more established sectors, better known for their impact in the EU economy. 

The bioeconomy rivals these sectors’ impact in terms of employment, with recent Joint Research Centre (JRC) data showing it now represents 8% of all EU jobs, on par with the automotive sector. The forest-based sector alone, which includes the paper industry represented in Brussels by Cepi, comprises one in five factories in Europe and supports 4 million jobs. 

By increasingly providing bio-based materials and wood-fibre to other industries, such as chemicals or apparel, in support of their decarbonisation strategies, one could say that the forest-based bioeconomy (green bioeconomy) is as strategic as steal or transport in its role in the broader EU economy. 

Made in Europe

The Clean Industrial Deal specifically tasks our sectors with “tapping the significant growth potential of bio-based materials in substituting fossil-based materials” and “further reducing dependencies on imported raw materials.” The green bioeconomy is uniquely positioned to meet these interconnected goals. With 85% of our raw materials sourced from within the European Union, our industries are committed to remaining in Europe, utilizing technology developed on the continent.

Meanwhile, forests cover more than 40% of the EU land surface and, over the past 15 years, the forest area in Europe has expanded by 59,000 km², positively impacting biodiversity. This growth enables us to sustainably address Europe’s overreliance on imported fossil materials. While energy dependency often garners attention, many products consumed in the EU are still derived from fossil sources extracted and manufactured far from our shores.

Rural Jobs

Compared to fossil-based industries, the forest-based sector has a more diverse ownership structure and its operating costs are consequently higher, with approximately 400,000 small and medium-sized enterprises contributing to its ecosystem.

It offers the possibility of a more inclusive distribution of income and jobs across the EU territory. In many of our companies, even the largest ones, over 90 percent of our employees live in rural communities. 

Forest Management

This includes not only ‘good industrial jobs’, but also the very people who care for the forests. Europe is counting some 16 million forest owners. These owners adhere to an extensive set of regulations aimed at sustainable forest management, including over 100 pieces of EU legislation, national rules, and voluntary wood certification schemes. 

Which is why many in our industries are calling for the EU Commission to evaluate the existing sustainability framework before introducing new legislation. The current framework as it exists has already yielded positive results, such as reducing the frequency of forest fires and enhancing carbon capture. Foresters, particularly those in private companies, are committed to ensuring that the forest economy operates in harmony with the natural balance and biodiversity of these vital ecosystems.

Recycling champions

The story of our sustainability does not end with forest management. The European paper sector exemplifies the best practices of circularity, boasting a remarkable recycling rate of 79.3%. This achievement not only benefits the environment but also strengthens the strategic and industrial position of EU-based companies, ensuring raw material self-sufficiency. 

The global impact of our sector’s self-regulation is evident in initiatives like 4evergreen, which unites some of the world best known and largest companies to ensure that wood fibre is the most recyclable and most recycled material for packaging.

To build on this success, it is essential that biogenic materials are prioritised in the future Circular Economy Act, for which the upcoming Bioeconomy Strategy should lay a solid foundation.

Demande pull

The substitution of fossil products with forest-based alternatives already prevents 410 million tons of CO2 emissions annually in Europe. Scaling up this substitution presents a significant opportunity for our climate. However, the competition between bio-based and fossil products is currently unbalanced, with $705 billion invested in fossil fuels in 2023 by the world’s 60 largest private lenders. 

To address this, we advocate for measures that create market demand for bio-based products, including recognising their fossil substitution potential in product policy legislation, prioritising bio-based solutions in public procurement and removing permitting barriers for industrial symbioses, which will further enhance our efforts to supply biogenic carbon to industries which now rely on fossil sources. 

Engine of future growth

According the World Business Council for Sustainable Development, the global bioeconomy is projected to present a business opportunity of $7.7 trillion USD by 2030. A figure now cited in reports and policies aiming to develop the sector in other parts of the world. Yet, many publications also point to early signs that Europe can be leading the ‘bio revolution’, and that biomanufacturing innovation could be a crucial driver of the EU’s future growth. 

A recent study commissioned by Cepi identifies 143 biorefineries across the continent, with biorefinery products currently accounting for approximately 6% of the total turnover of Europe’s pulp and paper sector. This figure is set to rise significantly. Based on identified investment plans, projections indicate an annual sector growth rate of up to 5% through 2050.

While it is essential to support industries that form the backbone of the EU economy, it is equally important to invest in sectors that will foster our future growth and cultivate new industrial champions. Other global regions have not hesitated to do so in the past, the United States in ICT or China in renewable energy. Now is the time for Europe to follow suit.