EUROPEAN COMMISSION Brussels, 11.10.2018 SWD(2018) 431 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A sustainable Bioeconomy for Europe:

Strengthening the connection between economy, society and the environment {COM(2018) 673 final}



Table of Contents 1 Aim of the Staff Working Document 2 State of the EU Bioeconomy 2.1. The European Bioeconomy Strategy 2.2. The EU Bioeconomy 2.2.1. Ecosystems and their services 2.2.2. Primary sectors and biomass flows 2.2.3. Oceans and the Blue Bioeconomy 2.2.4. Bio-based sectors 2.2.5. Food systems 2.2.6. Bioenergy 2.3. The Bioeconomy and Circular Economy: Adding value to bio-waste, by-products and resource flows 3 Action Plan: Leading the way towards a sustainable, circular bioeconomy 3.1. Strengthen and scale-up the bio-based sectors, unlock investments and markets 3.1.1. Mobilise public and private stakeholders, in research, demonstration and deployment of sustainable, inclusive and circular bio-based solutions 3.1.2. Launch of the EUR 100 million Circular Bioeconomy Thematic Investment Platform 3.1.3. Study and analysis of enablers and bottlenecks and provide voluntary guidance to the deployment of bio-based innovations 3.1.4. Promote and/or develop standards and emerging market-based incentives, and improve labels applicable to bio-based products on the basis of reliable and comparable data on environmental and climate performance 3.1.5. Facilitate the development of new sustainable biorefineries and confirm the type and estimated potential

3.1.6. Research and innovation investments for the development of substitutes to fossil based materials that are bio-based, recyclable and marine-biodegradable, and of bio-remediation methods by mobilising the key actors in the relevant value chains including the plastics value chain and to contribute to plastic-free, healthy and productive European seas and oceans 3.2. Deploy local bioeconomies rapidly across Europe 3.2.1. A Strategic Deployment Agenda for sustainable food and farming systems, forestry and bio-based production in a circular bioeconomy 3.2.2. Pilot actions to support local bioeconomy development (rural, coastal, urban) via Commission instruments and programmes 3.2.3. Set up an EU Bioeconomy policy support facility and a European Bioeconomy Forum for Member States 3.2.4. Promote education, training and skills across the bioeconomy 3.3. Understand the ecological boundaries of the bioeconomy 3.3.1. Enhance the knowledge on the bioeconomy, including on biodiversity and ecosystems to deploy it within safe ecological limits, and make it accessible through the Knowledge Centre for Bioeconomy 3.3.2. Increase observation, measurement, monitoring and reporting capabilities and build an EU-wide, internationally coherent monitoring system to track economic, environmental and social progress towards a sustainable bioeconomy 3.3.3. Provide voluntary guidance to operate the bioeconomy within safe ecological limits 3.3.4. Better integrate the benefits of biodiversity-rich ecosystems in primary production through a specific support to agro-ecology, the development of microbiome-based solutions, and new tools to integrate pollinators in supply value chains



1Aim of the Staff Working Document The present Staff Working Document accompanies the Communication from the European Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of Regions on “A sustainable Bioeconomy for Europe: Strengthening the connection between economy, society and the environment” (hereafter, also the “Communication”). The Communication presents an update of the European Bioeconomy Strategy and Action Plan (hereafter, also the “Strategy”), which aim to drive the vision of a full deployment of a sustainable and circular European bioeconomy. In doing so, the Strategy aims to strengthen the connections between economy, society and the environment, thus maximising the contribution of a sustainable bioeconomy to the Commission priorities and to numerous of its policy objectives. These include in particular, the renewed Industrial Policy, the Circular Economy, and the Clean Energy for All Europeans Package, all of which stress the need of a sustainable, circular bioeconomy to achieve their objectives. A sustainable bioeconomy will also underpin the objectives of the renewed Common Agricultural Policy and Common Fisheries Policy, as well as those of the Action Plan on Nature, People and the Economy, the EU Forest Strategy, Biodiversity Strategy, Plastic Strategy, and Soil Thematic Strategy (see 2.1). Delivering on all of the above objectives and policies will further accelerate the contributions of the EU bioeconomy towards the 2030 Agenda and its Sustainable Development Goals, to the EU’s commitments under the Paris Agreement and to the targets of the 2030 Climate and Energy Framework. In Section 2, the Staff Working Document presents the background information, and supporting data, related to the European Bioeconomy Strategy and the current state of the bioeconomy in Europe. Section 3 of the Staff Working Document further details the background to, and expected impact of, the actions proposed in the Communication’s Action Plan. 2State of the EU Bioeconomy 2.1.The European Bioeconomy Strategy The European Bioeconomy Strategy and its Action Plan emerged in 2012 from the Innovation Union and Resource Efficient Europe flagship initiatives of the EU 2020 strategy, recognising that the bioeconomy, currently worth EUR 2.3 trillion in turnover and accounting for 8.2% of the EU's workforce, plays a central role in addressing a number of key interlinked challenges. The importance of this Strategy for Europe and its institutions, for the EU Member States and for their regions has been reiterated in several occasions. The 2012 Strategy aimed to “pave the way to a more innovative, resource efficient and competitive society that reconciles food security with the sustainable use of renewable resources for industrial purposes, while ensuring environmental protection”. The 2012 Strategy highlighted that the bioeconomy's cross-cutting nature offers a unique opportunity to comprehensively address inter-connected societal challenges, and identified five objectives to which the Strategy and its Action Plan were to contribute: (1) ensuring food security, (2) managing natural resources sustainably, (3) reducing dependence on non-renewable resources, (4) mitigating and adapting to climate change, and (5) creating jobs and maintaining EU competitiveness. In 2017, a Review of the Bioeconomy Strategy (hereafter, also the “Review”) was carried out, with the support of independent external experts. The Review concluded that the European Bioeconomy Strategy has substantially delivered during the past years on its objectives, through a wide array of actions ranging from the EU Framework Programmes for Research and Innovation, to the launching of the Bio-Based Industries Joint Undertaking (BBI JU) leading to the creation of new bio-based value chains, to the development of several national bioeconomy strategies, of dedicated regional platforms and of stakeholder panels, all promoting the development of local bioeconomies valuing local resources and adapted to local needs. In particular, the Strategy succeeded in mobilising Research and Innovation funding in bioeconomy by a) doubling the EU Research and Innovation funding dedicated to the bioeconomy under Horizon 2020, b) increasing support to private investment and public-private partnerships through the launch of the BBI JU, and c) encouraging Research and Innovation investments in the Member States. Also, one of the key results of the European Bioeconomy Strategy has been to bring the bioeconomy principles and cross-cutting objectives to the attention of national and regional policy-makers, as demonstrated by the number of countries that have adopted bioeconomy policies since 2012. A substantial number of European regions have also included bioeconomy-related priorities in their Research and Innovation Strategies for Smart Specialisation. The importance of regional bioeconomy strategies, of rural renaissance and of sustainably managing natural resources, is also one of the points of the Bioeconomy Stakeholder Manifesto, which has been another significant achievement of the 2012 Strategy.

Notwithstanding its positive outcome, the Review also identified several areas for further improvement of the Strategy and Action Plan, namely the need for: a)further mobilisation of investments, including from the private sector; b)increased predictability of the regulatory environment to facilitate further investments; c)increased coherence among relevant EU policies; d)increased involvement of Member States, regions and cities; e)inclusion of fewer, focused actions to deliver on a circular bioeconomy; f)better monitoring of progress of the bioeconomy as a whole and of the Strategy itself, including appropriate indicators; g)updated alignment to recent EU and global policy developments. In terms of the latter point, the Review concluded that “…The current policy context highlights the need for a sustainable, circular bioeconomy. The policy context in which the bioeconomy operates has changed significantly since 2012, with EU and global policy developments such as the EU Circular Economy, the EU Energy Union, the Paris Climate Agreement and the 2030 Agenda for Sustainable Development. In consequence, the concept of a sustainable, circular bioeconomy is being proposed by various stakeholders. The scope of the 2012 Strategy and Action Plan and the relevance and focus of its objectives and actions have to be looked at in light of these developments." Achieving sustainability is at the heart of the Commission's political priorities, it depends upon the renewal of our industries, economies and energy systems, and as such it is central to EU policies related to different parts of the bioeconomy, such as the legislative proposals on the common agricultural policy (CAP), the Strategic Approach to EU Agricultural Research and Innovation , the ongoing implementation of the EU Action Plan for the Circular Economy and the new waste legislation, FOOD 2030 Research and Innovation work stream, the renewed EU Industrial Policy Strategy, the Commission Work Programme for 2018-2020, the EU Communication on Accelerating Clean Energy Innovation, the Energy Union Framework Strategy including the Renewable Energy Directive, the Convention on Biological Diversity and the EU Biodiversity Strategy, the Common Fisheries Policy, the EU Forest Strategy, the Blueprint for EU Forest-based Industries , the Blue Growth Strategy, the European Commission Communication on International Ocean Governance and the EU Action Plan for Nature, People and the Economy (Table 1). Strategies relevant to the bioeconomy Bioeconomy specific ØCommission communication ‘Innovating for sustainable growth: a bioeconomy for Europe’ (EC 2012a) Sectors mainly supplying biomass Agriculture ØCommission communications: legislative proposals on the common agricultural policy (CAP) beyond 2020 (COM/2018/392 final; COM/2018/393 final; COM/2018/394 final/2) ØCommission communication ‘Thematic Strategy for Soil Protection’ (SEC(2006)620) Forest-based sector ØCommission communication ‘A new EU forest strategy: for forests and the forest-based sector’ (EC 2013a) ØCommission staff working document ‘Multiannual implementation plan of the new EU forest strategy’ (EC 2015a) ØBlueprint for the EU Forest-based Industries (SWD(2013)343) Fisheries, aquaculture and algae ØThe Common Fisheries Basic Regulation (EU) No 1380/2013 ØCommission communication ‘Blue growth: opportunities for marine and maritime growth’ (EC 2012e) ØReport on the Blue Growth Strategy, Towards more sustainable growth and jobs in the blue economy, SWD (2017) 128 final ØCommission communication ‘Strategic guidelines for the sustainable development of EU aquaculture’ (EC 2013e) ØJoint communication “International ocean governance agenda for the future of our oceans” (EC 2016) Waste ØSee cross-cutting policies (below) Sectors mainly using biomass Food and nutrition security ØCommission communication ‘An EU policy framework to assist developing countries in addressing food security challenges’ (EC 2010e) ØCommission communication ‘ Increasing the impact of EU development policy: an agenda for change’ (EC 2011c) ØCommission communication ‘Enhancing maternal and child nutrition in external assistance: an EU policy framework’ (EC 2013b) ØCommission communication ‘ The EU approach to resilience: learning from food security crises’ (EC 2012c) Energy ØEU Renewable Energy Directive (2009/28/EC) ØCommission communication ‘An energy policy for Europe’ (EC 2007a) ØCommission communication ‘A European strategic energy technology plan (SET-plan) — Towards a low carbon future’ (EC 2007b) ØCommission communication ‘Limiting global climate change to 2 degrees Celsius — The way ahead for 2020 and beyond’ (EC 2007c) ØCommission communication ‘Energy 2020 — A strategy for competitive, sustainable and secure energy’ (EC 2010f) ØCommission communication ‘Energy roadmap 2050’ (EC 2011d) ØCommission communication ‘A policy framework for climate and energy in the period from 2020 to 2030’ (EC 2014a) ØCommission communication: ‘Accelerating Europe’s transition to a low-carbon economy’ (EC 2016k) ØClean Energy Package (2016) ØCommission communication 'The role of waste-to-energy in the circular economy', (EC 2017a) Bio-based industries ØCommission communication ‘A lead market initiative for Europe’ (EC 2007d) ØCommission communication ‘Preparing for our future: developing a common strategy for key enabling technologies in the EU’ (EC 2009) ØCommission communication: ‘A stronger European industry for growth and economic recovery’ (EC 2012d) ØCommission communication ‘For a European industrial renaissance’ (EC 2014f) ØFuture strategy on plastics use, reuse and recycling (EC 2016l) Cross-cutting policies relevant for the bioeconomy Environmental protection and Climate Change ØEU Action Plan for Nature, People and the Environment (COM(2017)0198 final) ØEU Biodiversity Strategy (COM/2011/0244 final) ØEU Strategy on adaptation to climate change (COM/2013/0216 final) Circular economy — Waste ØCommission communication 'Towards a circular economy: a zero waste programme for Europe' (EC 2014e) ØCommission communication ‘Closing the loop — An EU action plan for the circular economy’ (EC 2015b) ØCommission communication 'The role of waste-to-energy in the circular economy' (EC 2017a) ØFuture strategy on plastics use, reuse and recycling (EC 2016l) ØWaste package 2018 ØFertiliser Regulation (Regulation (EC) No 2003/2003) ØA European Strategy for Plastics in a Circular Economy (EC 2018) Regional policies — Smart specialisation ØCommission communication ‘Regional policy contributing to smart growth in Europe 2020’ (EC 2010g) ØCommission communication ‘Strengthening Innovation in Europe's Regions: Strategies for resilient, inclusive and sustainable growth (EC 2017) Research and innovation ØCommission communication ‘Europe 2020 flagship initiative — Innovation union’ (EC 2010a) Industrial policy ØCommission Communication ‘Investing in a smart, innovative and sustainable Industry- A renewed EU Industrial Policy Strategy’ (COM/2017/0479 final) Table 1: EU policies relevant for the bioeconomy The Bioeconomy Strategy provides a coherent framework that cuts across various sectors and policies, allowing to build synergies (i.e. the exploitation of a service leading to the increased provision of another service), addressing trade-offs (i.e. the exploitation of a service to the detriment of another one) and delivering sustainability across various policy and sectoral objectives. In particular, the renewed Industrial Policy Strategy, the Circular Economy Action Plan and Accelerating Clean Energy Innovation refer to the bioeconomy as key for accelerating progress towards a circular, low-carbon economy. The European Commission is therefore updating the European Bioeconomy Strategy in order to respond to the current policy priority needs. In line with the new EU policies, the evolved objectives of the updated European Bioeconomy Strategy are the following: 1.Ensuring food security. Food and farming systems are a fundamental part of the bioeconomy, but they urgently need to be transformed to become more sustainable, nutrition-sensitive, resilient and inclusive in view of a growing world population, climate change and other environmental challenges, including water scarcity and loss of biodiversity and of productive land. 2.Managing natural resources sustainably, as central for a bioeconomy whose parts are increasingly interlinked. More than ever, a circular bioeconomy depends on an efficient and sustainable use of biological resources, against the backdrop of an increasing demand for biomass. The European Bioeconomy Strategy aims to restore and enhance ecosystems, for instance addressing the root causes of the declining health of global oceans and the collapse of biodiversity. 3.Reducing dependence on non-renewable resources, including replacing fossil fuels. Today, bioenergy is the EU’s largest renewable energy source, and it is expected to remain a key component of the energy mix in 2030. Moreover, a scaled-up and strengthened bio-based sector can do more than non-renewable substitution: it can support the renewal of the EU industrial base; it can contribute to the greening of industrial products; and it can help to systematically turn bio-waste and discards into value, thus achieving circularity. 4.Mitigating and adapting to climate change, by combining enhanced ecosystems services with a renewed bio-based industrial base reducing energy demand and lowering emissions, and with the provision of a more resource efficient, sustainable primary production on land and sea. A sustainable bioeconomy has a pivotal role in reducing pressures on major ecosystems such as oceans, forests and soils to a level respecting all planetary boundaries, and support their pivotal role for balanced nutrient cycles and as carbon sinks. 5.Creating jobs and maintaining European competitiveness. In 2015, the bioeconomy sectors employed nearly one in ten EU workers – 18 million people – and generated EUR 2.3 trillion turnover. Deploying a sustainable bioeconomy will support competitiveness by capitalising on advances in life sciences and biotechnologies, as well as innovations merging the physical, digital and biological worlds, in some of the EU’s most significant sectors and industries. A more proportionate sharing of the benefits of a competitive and sustainable bioeconomy among primary producers could benefit job creation at a local level. Through this Strategy and Action Plan the European Commission further demonstrates its commitment to "…mainstream the Sustainable Development Goals into EU policies and initiatives, with sustainable development as an essential guiding principle for all its policies". It also aims to achieve a better integration of Bioeconomy with the Circular Economy, as called by the European Parliament in its report on Cohesion and Circular Economy.

2.2.The EU Bioeconomy The bioeconomy covers all sectors and systems that rely on biological resources (animals, plants, micro-organisms and derived biomass, including organic waste), their functions and principles. It includes and interlinks: land and marine ecosystems and the services they provide; all primary production sectors that use and produce biological resources, i.e. agriculture, forestry, fisheries and aquaculture; and all economic and industrial sectors that use biological resources and processes to produce food, feed, bio-based products, energy and services. It cuts across these sectors and systems, interlinking them and creating synergies. While biotechnology is at the heart of bio-based processes, health biotechnology and biological medicines are not included in the bioeconomy definition. Sustainable bioeconomy activities are deemed central to meet the Sustainable Development Goals (Figure 1), from food and nutrition security to ensuring energy access and health. What follows is an overview of the economic, social and environmental dimensions of the bioeconomy and its expected impacts towards 2030. According to work from the European Commission’s Joint Research Centre (JRC), in 2015 the bioeconomy in the EU-28 generated approximately EUR 2.3 trillion of turnover, which represents a 5% increase with respect to the previous year. In the same year, the bioeconomy created EUR 621 billion of value added in the EU (Figure 2), representing 4.2% of the EU's Gross Domestic Product and employing over 18 million persons in the EU, mainly in agriculture and the manufacture of food and beverages (together 76% of bioeconomy employment). In 2015, the highest value added annual growth occurred in the manufacture of bio-based chemicals (excl. biofuels) (+26%), the production of bio-electricity (+15%) and the manufacture of rubber and bio-based plastics (+13%), generating altogether an additional EUR 3.5 billion of value added compared to the year before. Figure 2. Turnover (billion EUR), value added (billion EUR) and employment (million people) in the EU-28 in 2015 by bioeconomy sector. Adapted from: European Commission's Knowledge Centre for Bioeconomy (2018), Brief on jobs and growth of the bioeconomy 2009-2015. doi:10.2760/157298, JRC112875. Germany, France, Italy, the United Kingdom and Spain generated 64% of the total EU Bioeconomy value added in 2015. Additionally, specific features of national bioeconomies can be observed. For instance, thet bioeconomy in Finland, Sweden, Estonia and Latvia is oriented towards the forest-based sector (i.e. forestry and the forest-based industries, including the manufacture of wood and paper). In Italy and Portugal, 14% and 16% of the bioeconomy value added, respectively, comes from the manufacture of bio-based textiles. Finland and Sweden generate 25% and 20%, respectively, of their bioeconomy value added from the manufacture of paper. Finally, 36% of Ireland’s and 35% of Denmark’s bioeconomy value added were generated by the manufacture of bio-based chemicals, pharmaceuticals, plastics and rubber. This shows that there is not one single bioeconomy in Europe but several bioeconomies adapted to local contexts. Between 2009 and 2015, employment has increased in bio-based chemicals, bio-based pharmaceuticals, bio-based plastics and bio-based rubber, notwithstanding the overall EU labour force decline in agriculture, which drove down the EU Bioeconomy jobs in a proportional fashion (Figure 3). These employment trends are expected to continue to 2030. Decentralised models, where at least the first transformation of biomass takes place as close as possible to the biomass provisioning areas, being them rural (agriculture, forestry), coastal (aquatic) or urban and peri-urban (biowaste and waste water), offer potential for reinvigorating local economies through the creation of skilled ‘green’ jobs. The use of biomass to produce materials can directly support 5-10 times more employment, and generate 4-9 times more value added, than energy uses, principally due to longer, more complex supply chains for material use. Figure 3. Change in number of jobs in the EU bioeconomy between 2009 and 2015, by sector (log scale). Source: Joint Research Centre, https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMICS. The relative contribution of primary sectors to the EU Bioeconomy is significantly lower in terms of value added (33%) than in terms of the number of persons employed (55%). This is clearly reflected at national level too, where several EU countries have a high share of jobs in the bioeconomy, however with a comparatively low resulting added value (Figure 4), mainly due to a predominance of employment in the less productive sectors. Figure 4 reveals a rather heterogeneous geographical contribution to the EU Bioeconomy at Member State level. In particular, low bioeconomy added value in the Central and Eastern Europan countries is at odds with their high, and, compared to other European regions, yet underutilised biomass potential. To address this gap, the BIOEAST Initiative’s mission is to assist Central and Eastern European countries to implement their bioeconomy vision for 2030, offering opportunities for a sustainable increase of biomass production,, a circular processing of the available biomass and viable rural areas. Figure 4. Left: Geographical distribution of bioeconomy added value across EU Member States (in million EUR, 2015). Right: Geographical distribution of bioeconomy location quotient across EU Member States (2015). The location quotient, or job concentration factor, is the indicator usually used to measure how ‘concentrated’ a sector is in a Member State compared with the EU, i.e. the share of Member State employment in the bioeconomy (or in a given sector of the bioeconomy) divided by the EU employment share in the bioeconomy (or in the same given sector). Source: Joint Research Centre, https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMICS. In terms of its environmental benefits, the bioeconomy can contribute to the defossilisation of major industries, such as the energy and transport sectors, the chemical industry (e.g. plastics) and the construction sector (use of wood and its composites with other materials in the construction industry as a substitute for non-renewable building materials, such as steel and concrete with possibly lower use of energy and greenhouse gas emissions). Even though the production of biological renewable resources is also associated with greenhouse gas emissions, resource consumption and other environmental risks, there is growing understanding that deep defossilisation and remaining under the 2°C limit will not be possible without sustainable bioeconomy activities, given their potential for carbon sequestration, the substitution of fossil resources with sustainable biomass-based resources, and their large greenhouse gas emission reduction potential related to more resource efficient and sustainable production patterns. For example, wood products have significantly lower greenhouse gas emissions than fossil material alternatives over the complete life cycle of the product (including use and disposal), yielding an average saving of 1.5 to 3.5 tons of carbon dioxide emissions per 1 ton of wood products used, instead of construction materials such as concrete. Moreover, the mix of industrial biotechnology with advanced chemistry can increase the efficiency of current production processes. Notwithstanding the wealth of information available, significant data gaps remain, impeding fully assess the different impacts of the bioeconomy. Notably, information is still scarce on how much biomass is available and can be mobilised sustainably, how much is being used and for which purposes, and how the increased pressure on natural resources can be reconciled with environmental, economic and social sustainability in Europe and globally. Examples of potential competing demands for biomass are detailed in the 4th (and latest) foresight exercise of the Standing Committee on Agricultural Research. For instance, while Europe is self-sufficient in terms of food production, at a global level producing enough food for an increasing population is a central question, yet one that implies increasing cropping areas at the expenses of forests, which are indispensable for the future (see 2.2.1). Moreover, food that is produced directly for humans and feed that is produced for animals in order to feed humans are in competition for arable land. In industrial countries, more than 40% of the total land is used for feed production. Also, as fossil resources gradually phase out, crops cultivated for biofuel and bioenergy, and also for the production of materials, could take away land and calories from human nutrition, with the risk of increasing the pricesi of food commodities. To help closing these knowledge gaps, the European Commission’s Joint Research Centre (JRC) has been tasked with providing data, models and analyses of EU and global biomass potential, supply, demand and its sustainability on a long-term basis. This work links in with international efforts, because examining biomass supply and demand without considering the global context, in particularly the rapidly expanding food demand of non-OECD countries, would underestimate future competition for resources, resulting market effects, as well as possible global geopolitical and environmental repercussions that might well reach the local bioeconomies in the EU. Moreover, forecasts of future trends are required in order to steer Research and Innovation investments, to ensure a coherent policy approach that coordinates the demands for biomass from different sectors and to ensure an optimum contribution of the bioeconomy to defossilisation pathways. 2.2.1.Ecosystems and their services

Since 2012, climate change has accelerated, thus becoming a more pressing issue than ever before. At the same time, biodiversity loss and land degradation have emerged as threats as serious as climate change. Biological resources, the vitality of ecosystems they inhabit and biodiversity are at the very heart of the manifold bioeconomy areas. Healthy ecosystems are essential to human wellbeing; they provide services including habitat maintenance, sustaining food and biomass production, pollination, regulation of freshwater quantity and quality, soil formation, balanced nutrient cycling and regulation of floods, not to mention climate regulation services, essential also to the provision of land and marine-based services. Soils are a fundamental factor in the transition towards a sustainable bioeconomy as society depends on fertile lands and their long-term maintenance because of their associated ecosystem services. Biodiversity is at the base of robust ecosystem condition and functioning, which in turn ensures the continuous and dependable flow of services. However, human activities exert increasing pressure on soils, oceans, water, air, biodiversity, climate and other natural resources. Biodiversity has been shown to be a key determinant for productivity, as important as nutrients and climate, and biodiversity loss reduces ecosystems productivity and stability. Nature’s services to humankind are under threat due to the continuing loss of biodiversity, which has had negative consequences for the delivery of many ecosystem services over the last decades: In 2008, the cost of losing terrestrial biodiversity at global scale has been estimated to be just under 1% of Gross Domestic Product for the year 2010. These costs increase and are predicted to be 7% of global consumption by 2050. The degradation of the Earth’s land surface through human activities is negatively affecting the well-being of at least 3.2 billion people, and it costs the equivalent of about 10% of the world’s annual gross product in 2010 through the loss of biodiversity and ecosystem services. Globally, these declines have occurred in part because of the intensive agriculture and forestry practices. Major ecosystems, such as oceans, forests and soils are crucial carbon sinks, without which achieving the balance between emissions and removals of greenhouse gases will not be possible, as pointed out in the Paris Agreement. Oceans absorb up to 30% of the annual emissions of carbon dioxide generated by human activity, helping mitigate the rise in greenhouse gases. However, this benefit comes at a steep ecological cost; the absorbed carbon dioxide alters the carbonate chemistry of the waters, leading to an increase in the acidity of seawater. Studies at open ocean and coastal sites around the world have revealed that current levels of marine acidity have increased on average by about 26% since the start of the Industrial Revolution (pH reduction of 0.1) and that marine life is exposed to conditions falling outside previously experienced natural variability. At a global level, between 2010 and 2015 the natural forest area has decreased by a net 6.5 million hectare per year. Afforestation and natural expansion of forest do not compensate for these losses, and the continued overall loss of forest land contributes to water scarcity, unmitigated spring floods and climate change. However, against this trend, natural forest area in Europe is increasing, through natural regeneration, reforestation and afforestation practices. Moreover, the growing stock increases, as harvesting is lower than the yearly increment. For this reason, European forests act as a considerable carbon sink whose carbon sequestration activity removes, on average, about 9% of total annual greenhouse gas emissions in the EU, and has been doing so for the last decades. Exploitation of certain ecosystem services may lead to unintended environmental consequences throughout the ‘ecosystem services supply chain’. To this end, trade-offs and synergies in service provision must be carefully analysed. 2.2.2.Primary sectors and biomass flows The agriculture, forest-based and marine sectors (mainly aquaculture and fisheries) are the main primary producers/suppliers of biomass. The average EU-28 annual domestic biomass production from the land-based sectors (forestry and agriculture, excluding pastures) is 1466 megatonnes of (above ground) dry matter. The breakdown by commodities and sectors is shown in Figure 5. Figure 5. EU-28 annual biomass production from land-based sectors, excluding pastures (10-year average 2006-2015, in megatonnes dry matter). Adapted from Camia et al. (2018). Joint Research Centre Science for Policy Report, doi:10.2760/181536, JRC109869 In 2015, agriculture occupied about half of the land area of the European Union and it employed 4.2% of the EU-28 working population. Agriculature supplies the European economy with a diversity of essential products and services such as food, feed, material, energy and recreation. According to the medium-term outlook for agriculture towards 2030, the EU's utilised agricultural area is expected to continue to decline. As we approach 2030, EU per capita consumption of meat is expected to drop back to its current level, after increases in the first part of the outlook period 2017-2030. Nevertheless, EU feed use is expected to rise further over the outlook period, in response to more poultry and dairy production and more intensive beef production. Greenhouse gas emissions from agriculture are expected to decrease by 2030. Technological development, innovations and digitisation (e.g. precision farming, nature-based solutions, breeding) are significantly improving the potential for higher resource efficiency, decreased environmental and climate impact, increased resilience and decreased costs. Nevertheless, system redesign is essential to deliver optimum outcomes as ecological and economic conditions change. Although total agricultural income is expected to decrease considerably in real terms over the outlook period, income per worker is expected to increase slightly due to structural change and people leaving agriculture. Forests and other wooded land occupy around 43% of EU land and are a source of wood and non-wood products, providing a wide range of ecosystem services, such as carbon storage and sequestration, habitat provision and water regulation. Increasing the carbon storage in existing forests is a cost-effective mitigation measure, but signs of decreasing carbon storage have been observed in recent years mainly due to the changing age structure of EU forests. There is potential for increasing the carbon storage of European forests through sustainable forest management. About 84% of the EU forest area is considered potentially available for wood supply. In this area 444 megatonnes of wood grow every year (wood net annual increment, i.e. excluding losses due to natural mortality of trees). The EU average wood harvest rate is around 65 % of the wood net annual increment, though such rates vary widely across the member states. This results in many cases in an increase of forest-based woody biomass stock over time (around 100 megatonnes of carbon annually and approximately 9% of Europe’s fossil fuel emissions). However, reported harvesting is likely to be consistently underestimated by up to 20%, meaning that biomass availability is actually higher than statistically recorded. According to the Forest-Based Industries Blueprint, over 95 % of roundwood used by the EU's wood-processing sector comes from EU forests. There is a potential for increasing harvest rates and wood mobilisation to provide additional quantities of woody biomass (as advocated by some stakeholders) without exceeding the total annual increments, in order to maintain a domestic EU wood supply to the existing wood-processing industries, and also to service the growing demands from bio-based materials and products within the bioeconomy. Yet, trade-offs with other forest ecosystem services - e.g. carbon sink, nature conservation, recreation, soil and flood protection – need to be carefully assessed. The implementation of sustainable forest management principles, as enshrined in the EU Forest Strategy, must ensure sustainable wood mobilisation in the EU. Another crucial source of biomass, which is increasing in importance as land ecosystems come under increasing pressure, is biomass from fisheries, aquaculture and from farming the seas and oceans for other types of biomass (e.g. algae). Fisheries and aquaculture are important sources of food and nutrition and have the potential to make a significant contribution to food security and adequate nutrition levels for a global population expected to reach 9.7 billion by 2050. Moreover, they are an important source of income and support the livelihoods of hundreds of millions of people around the world. Aquaculture is the fastest growing animal food producing sector in the world and is an increasingly important contributor to global food supply and economic growth. The sector has increased production by 76% since 2004 and more than four times since 1990. However, in global terms the EU is still a relatively small player (Figure 6). Sustainable aquaculture faces particular challenges in the EU, due to competition for space and markets and administrative constraints. Figure 6. World and EU-28 seafood production (capture and aquaculture) from 1990 to 2014 in megatonnes. Source: Food and Agriculture Organization of the United Nations, 2016 A further source of biomass with increasing importance are the biological residues coming from the agricultural, forest-based and fishery sectors, and also the waste and sidestreams from other sources such as households, food production, and other biomass manufacturing (see 2.3).

When analysing biomass demand, currently ca. 50% of the biomass in the EU is used for feed and bedding, a significant fraction of which is needed for livestock production (Figure 7). Figure 7: Biomass uses in the EU-28 in 2015. Adapted from Camia et al. (2018), Joint Research Centre Science for Policy Report, doi:10.2760/181536, JRC109869. According to the Standing Committee of Agricultural Research Foresight on Sustainable Agriculture, Forestry and Fisheries in the Bioeconomy, the BIO-BOOM scenario foresees that the amount of biomass used globally for bio-based materials and chemicals could grow from 1.24 billion tons in 2012 to 5.7 in 2050, while the BIO-MODESTY scenario assumes that the growth in demand for biomass for materials and energy will be relatively low. In line with Sustainable Development Goal 12, a sustainable supply and demand system of biomass requires that consumption patterns are also sustainable. Yet, this is not always the case today. , For example, global livestock production currently accounts for one-third of the global cropland use and seven percent of the total greenhouse gas emissions, besides consuming an important fraction of water both at global and at EU level. Driven by an expected increase in world population, the demand for animal products is expected to increase by 70% by 2050, which is likely to aggravate environmental pressure and to negatively impact climate mitigation measures. 2.2.3.Oceans and the Blue Bioeconomy Oceans cover more than two-thirds of the earth’s surface and contain 97% of the planet’s water. The global ocean economy contributes significantly to economic output and employment. The Organisation for Economic Co-operation and Development (OECD) has estimated it at USD 1.5 trillion in value added in 2010, or approximately 2.5% of world gross value added. Moreover, it identified emerging ocean-based industries as having a particularly high potential in terms of growth, innovation and contribution to addressing global challenges such as energy security, environment, climate change and food security. Traditional activities may also contribute to a sustainable growth of the Blue Economy, provided that they are put on a sustainable pathway. Marine and freshwater realms will be crucial to meet the demand for food caused by a rapidly growing world population. Marine resources already constitute an important source of protein worldwide, but they are not optimally used in the EU, where human consumption focuses on a small number of top predator species and other uses are not very widespread. That translates into an untapped potential both for lower trophic levels and the various waste products. For the latter it has been estimated that for each tonne of fish eaten, an equal volume of fish material is discarded either as waste or as a low value by-product. That is why farming the sea and harvesting its resources efficiently is a clear objective of the .European Bioeconomy Strategy Due to conservation efforts and scientifically informed management plans, in some areas, such as the North East Atlantic, over time conservation levels are increasing and exploitation levels are improving towards sustainability. Still, many stocks remain overfished (40% in 2016) and/or in biological risk (35% in 2016). Progress to achieve sustainable optimal exploitation to ensure that all stocks will meet EU policy objectives by 2020 seems too slow. The situation is much worse in the Mediterranean Sea, where 93% of fish stocks are overfished. Under the remit of the Common Fisheries Policy, the Scientific Technical Economic Committee for Fisheries, together with the European Commission Joint Research Centre, is monitoring the status of the fish stocks, and also the performance of the Common Fisheries Policy (Art. 50 of (EU) 1380/2013), in order to provide the necessary scientific advice to ensure sustainable fisheries, thus contributing to reverse trends and restore ocean health. Next to fish, the extraction of algae biomass is becoming increasingly important, since this source is expected to represent an efficient alternative to increase the European biomass production potential, especially for protein generation. Algae are currently used mainly by the food and chemical industry as raw material for the extraction of hydrocolloids and for human nutritional products. Increased investment in sustainable farming of algae has become crucial, especially for commercially important species with identified susceptibility to ongoing stressors. In the EU, farming of algae is still at an early phase, however the production has increased by 66% between 2005 and 2014 (source: FAO fishstat). It requires further developments at the technological, operational, biological knowledge and economic levels. Importantly, all Blue Bioeconomy activities depend on the broader macroeconomic environment and the complex and uncertain interactions with the rest of the marine and maritime activities. According to the World Wide Fund for Nature, up to 70% of the annual value of global ocean's activity depends on the health of the ocean, and existing pressures would decimate the ocean’s resources in a business as usual scenario. A critical uncertainty is linked to the observed declining health of the ocean which appears to be accelerated due to climate change. The United Nations Framework Convention on Climate Change, 21st Conference of the Parties highlighted that climate and the ocean are inseparable, and in ways still to be explored and understood. The ocean absorbed around 93% of the excess heat trapped by greenhouse gas during the period 1971-2010 and 26% of anthropogenic carbon dioxide since the beginning of the Industrial Revolution. Increase of sea temperatures, rise of sea levels and ocean acidification (the so called "other carbon dioxide problem"), may all bring an unbearable burden on the marine capital. However, just 4.1% of the ocean is classified as protected, but only part of this is effectively managed. The Ellen McArthur Foundation and the World Economic Forum suggested that, current trend continuing, by 2050, seas and oceans might well contain more plastics than fish, by weight. Experts at the Alfred Wegener Institute, Helmholtz Centre for Polar and Marine Research have recently found higher amounts of microplastic in arctic sea ice than ever before. The Blue Bioeconomy can only flourish if managed sustainably. Yet, our knowledge about features below the sea surface remains limited, particularly when compared to what we know about the land. Therefore, efforts are needed, including scientific research, to better understand the impacts of maritime activities on marine ecosystems. A better understanding of ocean resources and the marine environment is necessary to underpin sound policies and will allow to better assess and weigh opportunities and potential risks inherent to marine bioeconomic activities. The prevailing lack of knowledge about the marine realm impedes to tap into its value to tackle current global challenges. The EU is stimulating action to provide better knowledge, ecosystem-based, cross-border and integrated spatial planning, management and surveillance. The Blue Growth Strategy and the circular economy offer opportunities to rethink growth models and extract more value out of our limited resources. Research and Innovation are progressing towards exploring the best possible ways that the ocean can continue to be both a healthy and productive life support system. Many scientific initiatives in place will enhance knowledge and help to push oceans and seas into sight as to improve governance and policymaking and to make the most of marine resources. With respect to the management of marine living renewable resources, the insistence on "best available scientific advice" stipulated in the Common Fisheries Policy basic regulation, could serve as a paradigm for other areas, to ensure the integration of scientific knowledge in policy and decision-making. 2.2.4.Bio-based sectors The bio-based sector produces and uses renewable biological resources and/or applies innovative biological processes and principles to deliver bio-based products, processes and services. There are conventional bio-based products made traditionally from biomass (such as wood, cork, natural rubber, paper, textiles, wooden construction materials) and more recently developed products such as bio-based chemicals, bio-based plastics, etc. Biofuels are also bio-based products, however as they are energy applications, they are discussed in section 2.2.6. Bio-based products can substitute fossil-based ones. They can be identical to their fossil alternative (“drop-in”) or novel products with entirely new functionalities and potential for new markets (e.g. cellulose-based ones, bio-based plastics that are fit for industrial composting and biodegradable in the natural environment or “green” chemicals). Bio-based products go far beyond biomass processing. They capitalise on the unprecedented advances in life sciences and biotechnology (including microbiology, microbiomes and enzyme technologies) that, coupled with the digital revolution, allow to use nature’s “biological assets” (its biochemicals and biomaterials) and its “biomimetic assets” (its functions and processes) to generate significant new sources of economic value and future revenue. Bio-based processes are characterised by presenting high selectivity and operate under milder and more environmentally friendly conditions, compared with traditional processes. A typical example is the microbial-based production of vitamin B2 (one step process as compared to a six-step chemical production), which reduces the use of non-renewable raw materials by 75%, the emissions of volatile organic compounds to air and water decreases by 50% and operating costs to by 50%. The transformation of biomass into a bio-based product takes place in biomass processing facilities. When a facility converts biomass into a spectrum of products, it is called a biorefinery. The bio-based sector has taken big strides in recent years. The interest in the transition from fossil to bio-based products has revitalised traditional sectors by bringing opportunities to diversify their product's portfolio. Innovation capitalises on the skills of making use of various biomass for the bio-based production, in traditional sectors such as pulp, woodworking, textiles and wood-based construction. The pulp, paper and board developed new cellulose-based applications that can replace fossil-based textiles and plastics, boost the use of nanofibril applications in bio-based adhesives, laminates, 3D printing and flexible electronics, as well as use foldable corrugated cardboard for the large scale packaging business for Internet products. The revitalisation of pulp, paper and board has also brought solutions for the better utilisation of their side streams for the biofuel production and is also now seen increasingly in markets including fine and commodity chemicals, healthcare, automotive, consumer goods, construction, etc. Some low-tech products, such as composites, packaging materials, etc., have lower added value but also lower cost and risk, hence are interesting for their large potential for replication in a diversity of regions and contexts. Another example of novel bio-based product comes from textile fibres made of microfibrillated cellulose from wood by mechanical processing and without harmful chemicals. For the textile sector, a gap of 180 million tons of textile ﬁbres is expected by 2050, which could mainly be ﬁlled by man-made cellulose ﬁbres, bio-based polymer ﬁbres or petrochemical ﬁbres — depending on the political and economic framework.

The bio-based sector is a highly dynamic part of the bioeconomy in terms of jobs and turnover growth. In the EU, between 2009 and 2015 the overall growth rate of the value added of bio-based sectors ranged between 14% for the manufacture of wood and wooden products and 23% for the manufacture of pulp, paper and cardboard. In the same period, the overall growth rate of EU value added of bio-based chemicals, pharmaceuticals, plastics and rubber has been 17%. Bio-based chemicals resulting from biomass processing are an important segment within the bio-based sector. In 2015, the sector of bio-based chemicals has created the highest number of jobs of all bioeconomy sectors (see 2.2). According to the preliminary results of a forthcoming Joint Research Centre 2018 study, the EU bio-based chemicals market is diverse and large differences can be found between product categories. For example, the bio-based solvents and platform chemicals both have a very small bio-based percentage, while on the other hand, surfactants and cosmetics already enjoy a large bio-based share. Even within the categories with similar bio-based share, the differences are large, where bio-based platform chemicals are expected to grow rapidly in the coming years, bio-based solvents are expected to grow much less. A 1% increase of European wood-based products in the market share of the global construction, textile and plastics markets could generate a revenue for the European wood-based bioeconomy in the scale of EUR 10 to 60 billion (depending on the assumptions made – see Table 2). This would amount to 3% - 20% of the current total turnover of the EU forest industry. The additional industrial roundwood use of this 1% increase would be at least 83 million cubic metres, which would be 23% of the total industrial roundwood production in the EU in 2016 (355 million cubic metres, data FAOSTAT). However, while the annual harvest would still be below the net annual increment, such an increase in the EU roundwood utilisation would reduce the EU's carbon sink, therefore trade-offs across all bioeconomy areas need to be carefully considered. Table 2. Hypothetical example of 1% market share for forest-based products in different sectors. In fact, the bio-based sector does not only contribute to growth and jobs but can also helps to sequestrate carbon through its long-term storage e.g. in wooden and woody biomass-based products. Moreover, the circularity and defossilisation of major economic sectors, including the agriculture and food sector, the chemical industry and the wooden construction sector, offer possibilities for long-term carbon sequestration and implementation of the low carbon economy. At the same time, forests are vulnerable to climate change, and enhancing their resilience and adaptive capacity will be key to ensuring a long-term supply of primary material and ecosystem services. Moreover, the future development and integration of Carbon Capture Storage or Use (CCS/U) technologies into industrial operations using biomass may offer the possibility for negative emissions, but after considerable infrastructure investments. The chemical and petrochemical industries are partly using biomass as raw material. An important driver for using biomass as raw material is the objective to reduce the greenhouse gas emissions of this sector that account for 7% of greenhouse gas emissions of all industry. According to the estimations of the European Chemical Industry Council (CEFIC), the total volume of organic raw materials used by the chemical industry in 2015 amounted to 77.7 megatonnes, of which about 10% (7.8 megatonnes) were renewable. Out of the renewable raw material, carbohydrates (sugar and starch), vegetable oils, natural rubber and bioethanol for ethyl tert-butyl ether account for almost two-thirds of the quantities. Other important materials are animal fats, chemical pulp, tall oil, glycerol and others. In the construction sector, greater use of wood as a substitute for more energy-intensive non-renewable building material can reduce greenhouse gas emissions. According to a report from the Food and Agriculture Organization (FAO) of the United Nations an analysis of 21 studies on mitigation potential of wood use in buildings and furnishing showed that most studies concluded that wood products have lower greenhouse gas emissions than alternatives over the complete life cycle of the product (including use and disposal). Meta-analyses of the average impact of using wood instead of concrete suggest an average reduction of 2.1 tons of carbon dioxide emissions per 1 ton of wood products used. Advances in bio-based innovation forter the circularity of the bio-based sector and the whole bioeconomy by enablinging the processing of current side-streams, residues and wates into products. For instance, side streams of both wood working industries and pulp, paper and board manufacturing can be converted into large number of new bio-based products with new functionalities (e.g. nanocellulose, carbon nanofibres, adhesives, normal and intelligent textiles, flexible electronics, 3D printing applications). The technologies also enable biowaste and residues from farms and forest-based sector, from cities or from the food sector to be transformed into bio-based products such as chemicals, organic fertilizers, biofuels and eventually heat and power, if a more circular use is not possible. The food-processing industries, for instance, are exploring the potential of converting residues into bio-based products such as chemicals and biofuels.New and/or more efficient ways of biomass processing, fractionation and extraction are key to recover complex molecules from biomass (e.g. polymers such as cellulose, hemicellulose and lignin derivatives), for new product value chains and to avoid the loss of value that results from breaking complex biomolecules down. Greater value can also be generated from unavoidable biological wastes and residues by efficient collection, sorting and conversion technologies and systems, as well as via development of upcycling technologies for them. Multi-product biorefineries can improve the efficiency of biomass utilisation by increasingly parallel exploitation of sideflows, reducing and/or recovering waste and residues, thereby boosting resource efficiency and waste prevention as well as recycling and circularity. The transformation of waste and residues into higher added value products will further link various sources of biomass (agri/forest-based sector residues; woodworking and pulp and paper processing sideflows, food production and household "biodegradable waste"; aquatic resources) with the production of an array of products such as food, feed, biotextiles, biopolymers, chemicals, bioplastics and eventually bioenergy/biofuels, thereby increasing the value creation, jobs and competitiveness as well as sustainability of biomass production and use as well as the value creation. As biomass is bulky and hence expensive to transport, these new transformation processes should ideally be located close to the primary production sites, hence bringing new added value generation into rural areas. The development and deployment of biorefineries will depend heavily on the profit margins of bio-based products and the successful development and commercialisation of new technologies; availability of local and/or regional feedstock at competitive prices, suitable infrastructure including logistics, skilled personal, private and public support services, including utility companies facilitating financing and permitting; and fostered by a supportive policy and regulatory enabling environment. The commercialisation and large-scale deployment of the less mature technologies, for instance, the material use of lignin and lignosulphonate currently transformed mostly into energy, represents a huge opportunity for e.g. lightweight materials deployment, phenol-based aromatics chemistry, for adding further value to this second most abundant biological resource beyond the current use as energy source. For the bio-based sector to deliver its benefits across regions and actor groups, and to ensure a balanced distribution of its benefits, different technologies and business models need to be developed, offering a portfolio of options. These range from the large and/or sophisticated biorefineries to smaller and simpler facilities with large replication potential. In addition, solid methods for life-cycle assessments need to be in place to ensure high environmental standards (including resource efficiency) of processes and products in bio-based industries. 2.2.5.Food systems Europe's food and farming system on land and sea, from primary production to consumption and disposal, has evolved over centuries and incorporates highly interlinked national and even local food and farming systems, embedded into a global system. Yet the European dimension is important, because many relevant policies, regulations and public support mechanisms are to a significant extent determined at EU level. Both the European fisheries and agri-food systems are characterised by a high diversity in terms of production, scale, intensity, labour input and supply chains. The European agri-food system, in particular, is based on a large number of small-scale family-based producers, retailers, and food service outlets operating alongside large-scale globalised companies. Agriculture provides the basis for food and other bio-based production under a wide range of conditions. In doing so, farmers also drive development in rural areas, impact on ecological services and deliver wider public goods. These multiple functions are performed in the context of major demographic, economic and environmental challenges, which are changing the landscape of food and other bio-based systems in which land-based primary production is taking place. The food and drink industry is one of the largest manufacturing sectors in the EU in terms of employment, turnover and value added. Wholesalers, transport companies and retailers play a vital role in the EU’s food system, in terms of logistics, handling and distribution. Together with food and beverage consumer service enterprises (restaurants, bars, etc.), they provide about twice the employment of the food and drink industry. The largest proportion of food consumed in the EU is still produced within the EU and the majority of EU trade in food and drink products takes place between EU countries. The EU is a net exporter of food and drinks with a positive trade balance of EUR 30.1 billion. Europe is a net importer of commodities such as tropical fruits, coffee, tea, cocoa, soy products and palm oil, used as food and feed. The EU is also the largest importer of seafood and fish products in the world. Its capacity to meet the demand for fish and aquaculture products from its own waters has been around 45% since 2008. The EU agri-food system generates 60% of all biomass demand in EU. However, it is estimated that around 88 megatonnes of food are wasted annually in the EU – around 20% of all food produced, with associated costs estimated at 143 billion euros. The energy necessary to cultivate, process, pack and bring food to European citizens’ tables, accounts for 17 % of the EU's gross energy consumption, equivalent to about 26 % of the EU's final energy consumption in 2013. Even though the agricultural sector has increased its productivity by nearly 9% since 2005 while cutting greenhouse gas emissions by 21% since 1990 and reducing fertiliser use, it remains the largest source of the greenhouse gases methane and nitrous oxide. This suggests scope for further use of renewables and reduced greenhouse gas and pollution emissions, and for considering agriculture, forestry, environmental protection of natural resources and climate change in an integrated manner. Also, marine and freshwater realms will be crucial to meet the demand for food caused by a rapidly growing world population. The potential for sea and ocean farming to meet this demand has been discussed in 2.2.3.

In the EU today, the proportion of the population that is overweight and obese is increasing in all European countries and among all age groups, including pre-school and primary school-aged children. As a consequence related public health costs are likely to rise. Dietary recommendations have been developed to support healthy eating habits in most European countries. Research and Innovation investments by public and private actors are supporting the shift from a conventional consumption and mass production model to food system supporting sustainable food and nutrition security for all. For the agri-food system, this includes giving increased emphasis on principles of agroecology and the support to farming systems that make efficient use of ecosystems services (e.g. organic farming, mixed farming, agroforestry). It also calls for a more personalised and customised food consumption model, while simultaneously improving sustainability, safety, resilience and resource efficiency of food production on land and sea. These investments drive solutions in the area of personalised nutrition, smart packaging, precision agriculture or smart local food systems to name just a few. At the same time, actors within the food system increasingly acknowledge that they need to engage more with citizens to design new solutions and to rebuild trust in the food systems. The EU agri-food sector is the main job and income source in many rural and remote areas, and relies on an agricultural sector capable of ensuring a steady supply of raw materials. European farming systems are characterised by fragmented structures and producer income levels, which remain significantly below income levels in the rest of the economy, and are facing significant structural adjustment. Hence, economic viability of farming and attractiveness to the younger generation are a prerequisite for food security. New food and bio-based value chains offer additional opportunities for agricultural and forestry production and activities in the rural economy. Avoiding additional pressure on resources will be necessary to seize these opportunities sustainably. The territorial dimension of agri-food systems is also important. Rural areas, which still account as a whole for 55% of EU jobs and 46% of gross value added, are going through a period of profound economic, demographic and institutional transformation. Globalisation, decentralisation, urbanisation, migration trends and the emergence of new product and service markets present new challenges and opportunities. Despite sustained growth in rural areas, there is still a gap with urban and intermediate areas. Recent research has however highlighted positive trends in rural growth and significant variations between rural areas. Encouraging cohesion and convergence among different regions is one of the EU’s core objectives. Sustainable growth and a balanced territorial development are needed to achieve the objective of “jobs, growth and investments” of the European Commission. Working conditions on farms and forest holdings are evolving constantly and social conditions in the farming sector deserve appropriate attention. 2.2.6.Bioenergy The European Commission's “Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy” aims to bring about the transition to a low-carbon, secure and competitive economy. The key objective of the Energy Union Strategy is to promote a transition to a low-carbon economy, based on lower greenhouse gas emissions, increased energy efficiency and renewable energies, including bioenergy. Bioenergy is by far the largest of the EU's renewable energy sources (followed by hydropower, wind, solar and geothermal), supplying 12% of the EU final energy demand, and having a significant role for the achievement of the 2020 and 2030 energy and climate targets. Bioenergy can have multiple benefits in terms of energy security, growth and jobs creation, particularly in rural development. For instance, it provides the highest number of direct and indirect jobs in the EU of all renewable energies (489,000 in 2015). Bioenergy production is expected to play a major role in defossilisationdefossilisation in all scenarios of the Energy Roadmap 2050, with a potential contribution between 10.1 EJ and 12.6 EJ. Bioenergy can make a significant contribution to greenhouse gas emission reductions when produced sustainably and used efficiently (see 2.3 for a discussion on energy recovery from waste and residues) . However, bioenergy production and use can also be associated to unintended environmental impacts, which need to be effectively mitigated by regulation and good practices at global and corporate level. These impacts were thoroughly analysed in the Impact Assessment on the Bioenergy sustainability, accompanying the revised Renewable Energy Directive for the period after 2020. Against this background, the EU bioenergy sustainability framework has been significantly reinforced under the updated Renewable Energy Directive, which final text was agreed at a political level between the Council and the European Parliament on 14 June 2018. For the period after 2020, the EU sustainability criteria will apply not only to biofuels and bioliquids but also to solid biomass and biogas for heat and power. The sustainability criteria applying to agriculture biomass have been further strengthened to protect highly biodiverse forest and soil quality and soil carbon. Specific new sustainability criteria have been set for forest-based biomass, with the view to prevent unsustainable harvesting and to protect forest carbon stocks. In addition, post-2020 large bioelectricity installations will need to apply stringent electrical efficiency standards. Furthermore, national renewable energy policies will need to take due regard of the waste hierarchy principles. Finally, Member States will not be able to support anymore incineration of organic waste for bioenergy generation in case they are not meeting the waste separation requirements set out in the Waste Framework Directive 2008/98/EC. 2.3.The Bioeconomy and Circular Economy: Adding value to bio-waste, by-products and resource flows Circularity is a quintessential element of the European Commission's vision for an EU Bioeconomy. The Circular Economy is an economic system in which "…the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimised". The scopes of the Circular Economy and the Bioeconomy intersect in their common aim to add value to biological waste and residues. The Circular Economy aims to retain the value of different kinds of resources (not only biological) in the economic cycle as long as possible, including, but not limited to, renewable biological resources, focussing on the way products and materials are designed, produced, used and disposed of. The bioeconomy encompasses additional activities other than those adding value to biological waste and residue streams, such as the transformation of non-residual biological resources into higher value products and the efficient production of renewable biological resources. The contribution of the bioeconomy to the circular economy has been assessed and recognised as very significant. Biodegradable waste (or biowaste) can be an important source of biomass, whose potential economic value is starting to be recognised by several sectors (e.g. the agricultural, forest-based, chemical and energy sectors). With the development of the bioeconomy, the demand for these secondary products is likely to increase, changing the economic conditions of production. The lack of standardised definitions makes it difficult to truly assess the volumes of different waste and residue streams that are not currently used but could be reasonably mobilised. Globally, more than 3300 megatonnes of residual biomass are estimated to be generated annually out of the six most important crops: barley, maize, rice, soybean, sugar cane and wheat. In Europe alone, 900 megatonnes of waste paper, food, and plant material are generated every year. In the fisheries sector, as much as 40 megatonnes of fish may be discarded each year during commercial fishing. Other estimates of the waste produced in fisheries and aquaculture include volumes as high as 130 megatonnes and up to USD 50 billion yearly losses as a result of poor management of seafood resources., In forestry, woody biomass residues, such as branches and tree tops, have been estimated to account for 5100 megatonnes per year globally, of which logging residues, branches and tree tops in EU-28 account for 87 megatonnes. Every year, almost 300 megatonnes of biodegradable household and household-like wastes, industrial wastes and other wastes are generated in the EU and remain largely unexploited. Among this waste, 140 megatonnes (90 megatonnes in dry matter) are municipal waste. About 82% of municipal solid waste is generated by households, the rest coming from commerce and trade, small businesses, yard and garden waste etc. (Eurostat, 2003). The legal obligations included in the Circular Economy package aim at increasing the availability of secondary materials (feed materials, biowaste) for further exploitation through conventional technologies (e.g. composting and anaerobic digestion), and very importantly, for innovative ways of extracting valuable substances or molecules before ultimately discarding the left-overs, if possible by using its inherent energy. With this view, innovation is expected to support the development of markets for bio-based products by creating industrial symbiosis for feed materials (one industry’s waste becomes the starting material for another). An example is the use of plant residues such as wheat straw or maize stover for bio-based materials, or the treatment of waste and residues for energy production, including the production of biogas through anaerobic digestion of biowaste and waste waters, as well as the integrated production of chemical products and bioenergy in biorefineries. The food processing industries are exploring the potential of recovering the energy contained in food residues on site, through biogas production or in dedicated combined heat and power plants. For biodegradable waste, the implementation of the requirements laid down in the Landfill Directive, in combination with the proposed new rules to ensure separate collection of bio-waste, should result in greater use of this resource for the production of waste-derived products and energy. Proposed changes to the EU Fertiliser Regulation should support this trend by opening up the single market for waste-derived fertilisers. According to FAO, one-third of food produced for human consumption is wasted or lost, which amounts to about 1300 megatonnes per year, and adds 3300 megatonnes of CO2 equivalent GHGs emitted to the planet atmosphere (third top emitter after the United States and China). Food waste is generated along the entire food system, although there is considerable uncertainty about estimates related to different stages, including production and processing. Nevertheless, the further use of food by-products and conversion of food waste is still limited. This is due to current limitation in its quantification along food supply chain, limited data on its quality and level of homogeneity, and to differences in national implementations of the waste legislation. Human waste, such as waste recoverable through wastewater treatment, is also a potentially very valuable and large-scale source of energy, fertilisers and chemicals. The EU Circular Economy Action Plan and the EU waste hierarchy consider important to keep the value of products, materials and resources in the economy for as long as possible, and the generation of waste minimised. The waste hierarchy is the cornerstone of EU policy and legislation on waste and a key to the transition to the circular economy. Its primary purpose is to establish an order of priority that minimises adverse environmental effects and optimises resource efficiency in waste prevention and management. These processes have different environmental impacts and rank differently in the waste hierarchy. Where waste-to-energy processes are opted for, such as the common use of wood waste as a feedstock for incineration, there is a need to ensure that the most efficient techniques are used: this maximises their contribution to the EU’s climate and energy objectives. In fact, waste-to-energy processes encompass very different waste treatment operations, ranging from ‘disposal’ and ‘recovery’ to ‘recycling'. For example, processes such as anaerobic digestion which result in the production of a biogas and of a digestate are regarded by EU waste legislation as a recycling operation. On the other hand, waste incineration with limited energy recovery is regarded as disposal. It is important to stress that the waste hierarchy also broadly reflects the preferred environmental option: disposal, in landfills or through incineration with little or no energy recovery, is usually the least favourable option for reducing greenhouse gas emissions; conversely, waste prevention, reuse and recycling have the highest potential to reduce greenhouse gas emissions. The 2012 European Bioeconomy Strategy and its accompanying Staff Working Document already emphasised the importance of the principle of cascading use of biomass. If it is applied as indicated in the Directive 2015/1513, all while taking into consideration the regional and local economic and technological circumstances, the maintenance of the necessary carbon stock in the soil and the quality of the soil and the ecosystems, the cascading principle may contribute to foster resource efficiency. The Circular Economy encourages a cascading use of renewable resources, with several reuse and recycling cycles, where appropriate. Generally, appropriate management of biomass should ensure its exploitation towards measures to stimulate industrial symbiosis. While the conversion pathways towards added value products may exist, especially using homogenous by-products and waste coming from agriculture, forestry-based, marine and agri-food industry sectors, ensuring their profitability requires both a techno-economic analysis and that trade-offs are minimised, such as minimising environmental impacts and externalities due to logistics.

3 Action Plan: Leading the way towards a sustainable, circular bioeconomy In February-March 2018, the European Commission published a Roadmap for the Communication updating the 2012 European Bioeconomy Strategy. An important objective of the public consultation of the Roadmap was to get feedback on the scope of the update and the proposed indicative lines of actions. The number of public responses received was 92, both from the public and private sectors, as associations as well as individuals. Overall, the responses indicated that the stakeholders and civil society at large would welcome the update of the European Bioeconomy Strategy. Many respondents stated that the European Bioeconomy Strategy and the Action Plan should further support strategic Research and Innovation. This latter is crucial for providing solutions to the challenges of our time. It delivers on citizens' priorities, as embodied in the Sustainable Development Goals and in the Paris Agreement on fighting climate change, on growth and jobs, and to solve the global challenges we face today and will face tomorrow. Moreover, Research and Innovation determines the productivity and competitiveness of our economy: about two-thirds of Europe's economic growth over the last decades was driven by innovation. The 2017 Review concludes that "a direct result of the 2012 Action Plan is the over two-fold increase in dedicated EU funding for the bioeconomy under the Horizon 2020 programme […] compared to Framework Programme 7 […]. This financial envelope could exceed EUR 7 billion when also considering other actions under Horizon 2020 which are not labelled "bioeconomy" per se and which support - in an indirect manner – the development of the bioeconomy." Even though given the long-term nature of Research and Innovation only preliminary assessments of the funding's impact can currently be made, the 2017 Review states that "there is already early indication that projects funded under the EU Framework Programmes are generating relevant excellent and multi-disciplinary research […]. Evidence from projects also shows that these are developing useful innovations aiming at for example reducing the environmental impact of food processing, generating food crops which are resource-efficient and high in protein, generating land-based and aquatic biomass for biobased use, improving underwater observation to monitor the marine environment, fish stocks and pollution." Europe’s doubling of Research and Innovation investment in the bioeconomy (from EUR 1.9 billion in the 7th Framework Programme, 2007-2013, to EUR 3.85 billion in Horizon 2020, 2014-2020) has opened new pathways and solutions for sustainability. However, further mobilisation of EU and Member State Research and Innovation investments are needed to deal with the coming challenges of a sustainable bioeconomy, and they could benefit from increased synergies, partnership and leverage. Horizon 2020 is now entering its crucial last years, when the results it produced will be harnessed and their impact on European societies and economies maximised. Furthermore, the EU Budget for the Future 2021-27 foresees that EUR 10 billion is invested for research and innovation in food, agriculture, rural development and the bioeconomy, as compared to the current EUR 3.85 billion in Horizon 2020 Societal Challenge 2 (Food, sustainable agriculture and forestry, marine, maritime and inland waters research, and the bioeconomy). This unprecedented level of commitment needs an equivalent level of responsibility in ensuring that these investments deliver a sustainable bioeconomy across the EU. These EU investments will be closely co-ordinated with and ideally complemented by the European Regional Development Fund and similar efforts at national and regional level, as well as with the public and private sectors. Importantly, the Action Plan will promote the involvement of stakeholders across the entire value chain in Research and Innovation to ensure that research and innovation are co-designed with the future users of its results. Many stakeholders stated that the European Bioeconomy Strategy and the Action Plan should further support training for a skilled workforce for all areas of the bioeconomy. Mobilising investments was considered to be a crucial step. Many respondents called for better data and more knowledge of the environmental, social and economic impacts of the bioeconomy, as a basis for dealing with possible trade-offs. In view of the development of regional bioeconomy strategies, the potential of interregional cooperation was highlighted. Largely emphasised was the need for coherence of the European Bioeconomy Strategy with other EU policies, especially in the field of Circular Economy, agriculture, forestry, energy and climate. There was consensus that raising public awareness and broadly engaging stakeholders is of utmost importance for the future development of the bioeconomy. Also, there was a clear indication of a need for a space where regular and strategic international cooperation at multi-partner level can take place with a focus on building policy coherence and on exploiting synergies between countries and regions taking into account existing mechanisms. In this respect, the European Commission has set up the International Bioeconomy Forum in 2017. The International Bioeconomy Forum is expected to develop a global policy dialogue on selected aspects of the bioeconomy through international co-operation for coherent, joint and impactful delivery of the world bioeconomies on Sustainable Development Goals, align research funding programmes and increase Research and Innovation cooperation and international awareness of the central role of bioeconomy. The 2017 Review also emphasised the complementarity between the circular economy and the bioeconomy. However it also pointed out that the links, synergies and coherence between the two were not fully developed (see 2.1). The purpose of this update to the 2012 Bioeconomy Strategy is to address these challenges through a set of 14 concrete actions which will be launched in 2019 at the latest. These actions reflect the conclusions of the 2017 Review. 3.1.Strengthen and scale-up the bio-based sectors, unlock investments and markets The 2017 Review concluded that “…Further mobilisation of investments is still needed, which requires a stable regulatory environment” and that “…Funding of high risk investments is not well supported by current EU instruments”. Matching the financing needs of the EU sustainable bioeconomy relies heavily on private investment which should be extensively further mobilised. As an illustration, according to some estimates approximately 300 biorefineries will need to be deployed in Europe by 2030 in order to meet the growing EU market demand in this sector. There are on-going efforts to map the number and location of existing biorefineries in the EU. An initial study identified 224 biorefineries operating in the EU at the end of 2017 and reports several dozens more biorefineries currently under construction. The raw material and main end product differs according to location and market focus. On the other hand, work by the Joint Research Centre (Figure 8) mapped more than 800 facilities producing bio-based products of which more than 500 are dedicated to the production of bio-based chemicals. Discrepancies are due to different definitions of biorefineries being used in the respective studies.



Figure 8. Biorefineries distribution in the EU as of March 2018. Purple dots indicate all biorefineries (803 in total) Blue dots indicate the 507 biorefineries producing bio-based chemicals, yellow dots indicate the 363 biorefineries producing liquid biofuels and the green dots indicate the 141 biorefineries producing bio-based composites and fibres. It has to be noted that some biorefineries produce more than one product category and are thus shown in more than one map. Dots in lighter colour in the three last figures indicate facilities that are currently inactive (but not necessarily as permanent status). Most biorefineries correspond with location of chemical industry clusters and location of ports. Highest density of facilities is in Belgium, Netherlands and some highly industrialised regions of Germany, France and Italy. Source: Parisi, C. 2018. Research Brief on biorefineries distribution in the EU. Joint Research Centre. However, private investors are often reluctant to invest in Research and Innovation bioeconomy projects because of uncertainties and risks in terms of regulation and policy, technology, market demand as well as feedstock supply issues amongst others. For instance, a major bottleneck is the large capital expenditure required for certain bioeconomy projects, such as new biorefineries. To address these issues, a financial instrument dedicated to the bioeconomy - the Circular Bioeconomy Thematic Investment Platform - will be established by the European Commission, and implemented in the context of enhancing synergies and complementarities between the various EU funding schemes available for supporting innovation in the bioeconomy, such as the Common Agricultural Policy (post-reform), the InvestEU Programme, the future European Innovation Council and the ETS Innovation Fund. Large, sophisticated biorefineries are only viable under certain circumstances and in certain locations and the number of actors capable of promoting and running them is limited. To achieve a wide deployment of sustainable bio-based value chains, it is necessary to develop in parallel business models that can be replicated and adapted to a variety of locations and contexts, with lower levels of investment, risk and technical sophistication, which can be plugged into established food and bio-based value chains or to stimulate new alternatives, taking advantage of the benefits of the particular location (resource availability, socio-economic factors, etc.). A wider range of actors need to get involved, including farmers and forest owners (alone or in association), small businesses, etc. By operating at local / regional level, these models will also facilitate circular approaches between exploitations and across sectors. To achieve these objectives, small-to-medium scale solutions seem to be most appropriate. Innovative organisational models should also be developed, to promote cooperation within and outside the primary sector. The EU bio-based sector needs to be reinforced to capitalise on its potential to contribute to greenhouse gas savings, the Circular Economy, reindustrialisation and decentralised manufacturing. The latter is particularly important for the European wood working, pulp, paper and board and bio-based chemical industry to stay competitive on an international level by modernising their business models and partners, their technological basis, reducing greenhouse gas emissions and generating more sustainable products through the exploration of alternative sustainable feedstock, industrial symbiosis and clean technologies. In this context, EU regions constitute key actors that help combining industrial modernisation and sustainability in a decentralised manner, and providing rural jobs. They play a pivotal role in keeping the woodworking, pulp, paper and board and chemicals industry in Europe and boosting their growth, as they can support the establishment of (regional and local) innovative value chains and are best situated to deploy locally available feedstocks (from agriculture, agri-food, the forest-based sector, residual and side streams, etc.) that can trigger the bio-based economy. Further, regions are very well placed to attract investments through local demonstration or flagship projects by benefitting from the cohesion policy funds, thus creating jobs, economic growth and new opportunities for the primary sector.

For realising the existing opportunities and scale up, the bio-based sector should have equal footing on market and regulatory conditions vis-à-vis the fossil-based industries. Some important messages from OECD on the bioeconomy policy challenges are as follows: 1) Bioeconomy policies have to be stable and long-term so that the private sector has the confidence to invest. 2) Removing fossil fuel subsidies and pricing in the environmental damage caused by those industries, would put a completely different complexion on their economics, and would create a level playing field for bio-based industries. The Communication “Accelerating Clean Energy Innovation (Nov 2016)" indicates that in 2012 annual direct fossil-fuel subsidies stood at around EUR 41.9 billion, rising to EUR 300 billion when including environmental externalities. 3) Support measures for renewable energy are reported as a problem for some industries seeking to process some forms of biomass for material and chemical use. Value added, employment, innovation and, in many cases, the environmental footprint do speak in favour of supporting industrial use of biomass-based materials, products, and chemicals in the majority of economic sectors. Standards, certification schemes, labels and public procurement can serve as further powerful instruments to support emerging markets for innovative products. According to market studies, products that included declarations on the sustainability of the product grew by 7%, as opposed to non-declaration products which only grew by 1%. Despite the launch of a number of initiatives in standardisation, certification, labelling and public procurement, progress on the issue of the voluntary uptake and on the regulatory framework for the development of new markets for the bioeconomy has remained limited in the European Union. A wider application of available standards for bio-based products, e.g., Life Cycle Analysis including carbon accounting tools, sustainability criteria, business-to-business and business-to-consumer communication will facilitate certification and labelling. This can improve the visibility of bio-based products and help with public perception and acceptance. Additionally and building upon the availability of guidance and training materials for bio-based products in procurement for different product groups, specific requirements promoting bio-based materials and products could be included during the development of EU Ecolabel and Green Public Procurement (GPP) criteria for new or other existing product groups not yet addressed and further innovative procurement activities. The bioeconomy can contribute solving the problem of plastic litter in seas and oceans via the support to research and innovation for the development of alternatives to fossil-based plastics and bioremediation methods. Plastic substitutes could include bio based, recyclable and/or biodegradable alternatives. In addition, the development and promotion of standards (including through research and innovation actions addressing marine biodegradability of bio-based products) and related labelling is crucial. This set of actions aims to strengthen and scale-up the bio-based sector to deliver more environmental benefits, value-added and job creation, by mobilising stakeholders and investments, and by supporting the creation of markets for novel and sustainable bio-based products and processes, including through existing and emerging regulatory frameworks. It responds to the Strategy’s objectives of reducing the dependence on non-renewable resources, as well as creating jobs and maintaining European competitiveness. 3.1.1.Mobilise public and private stakeholders, in research, demonstration and deployment of sustainable, inclusive and circular bio-based solutions This action will further engage with stakeholders (Member States, regional authorities, biomass primary producers, the private sector and wider public) to align strategies and visions to further strengthen and upscale the bio-based sectors (dealing with bio-based value chains in e.g. agriculture, forestry, marine, bio-waste, food), including innovative solutions that can be deployed in small scale, and which are suitable for direct adoption by primary producers, either individually or through cooperative business models, by exploring the various instruments available, including under the EU Research and Innovation Framework Programme, and also leveraging on private funds. Indicators: Number and financing volume of bioeconomy projects benefitting from financial advisory support; Number of regions having adopted the Self-Assessment tool to support investment readiness of the EU regions; Inventory of most promising technologies and innovations; Roadmap of demonstration activities and outreach activities; Number of demonstration projects and publicity materials and activities; Number of projects matched with potential investors; Number of EC match-making events between projects & investors; Inclusion of the bioeconomy in the existing EC initiatives on Distributed Ledger Technologies (DLTs) / blockchain (H2020; EU Blockchain Observatory and Forum). The bio-based sector has recently experienced accelerated technological development. The Bio-Based Industries JU has been instrumental to kick-start the demonstration and deployment of a number of first of a kind biorefineries and new value chains in the EU. Nevertheless, there is still a need to 1) make investment opportunities in the bio-based economy more appealing, transparent, secure and visible vis-à-vis investors, in the view of mobilising investment in the bioeconomy, and 2) helping EU regions using available tools to evaluate their investment readiness level for the production of more sustainable chemicals, including the usage of alternative raw materials for their production. To this end, this action aims at the development of a toolbox of solutions for biomass processing into bio-based products. It will deliver the following: 1)Further engagement with stakeholders, including Member States, the private sector and the wider public, to further align strategies and visions in scaling up the bio-based sector, exploring the various instruments under Horizon Europe and leveraging on existing EU-funded initiatives and private funds. 2)In respect to rural small-to-medium bio-based solutions, building on results from research and innovation, identification of technologies that are suitable to operate at small scale and easy to replicate and/or to adapt to local conditions, and promote demonstration activities. Successful demonstration projects will then be ready for deployment, which will be supported through action on the Strategic Deployment Agenda for food, farming, forestry and biobased production in a circular bioeconomy. They could also benefit from support from national or regional instruments, EU financial instruments (e.g. action 3.1.2), or feed into EIP-AGRI activities. (e.g. action 3.2.1) 3)Exploration of ways to increase the EU financial advisory support for Research and Innovation bioeconomy projects, as recommended by the European Investment Bank on 'Access-to-finance conditions for Investments in Bio-Based Industries and the Blue Economy'. Such financial advisory support would improve access-to-finance of projects, for instance by helping them to improve their bankability and investment-readiness, structuring their financing and liaising with private investors. 4)Exploration of the main Distributed Ledger Technologies (DLTs/blockchain) opportunities, challenges, barriers, potential applications and use cases in the bioeconomy sector, as well as raising awareness, and stimulating ideas and studies related to the DLTs possible impact in the bioeconomy. DLTs are globally drawing significant attention, resources and investments, and the bioeconomy sector is in a unique position to look into and benefit from the potential of DLTs. Finally, it is expected that investment in the bioeconomy may benefit from the clarification for investors on which economic activities can reliably be considered sustainable for climate change and environmental protection more broadly. It is expected that the outcome of the European Commission’s Action Plan on 'Financing Sustainable Growth' will lead amongst others to a harmonised EU classification system (taxonomy) of environmental activities, which will be integrated into EU legislation and therefore spur investment in the bioeconomy. 3.1.2.Launch of the EUR 100 million Circular Bioeconomy Thematic Investment Platform

This action will support a financial instrument dedicated to the Circular Bioeconomy under the InnovFin scheme (Horizon 2020). Indicators: EUR leveraged from the private sector for projects financed by the Thematic Investment Platform; Number and financing volume of bioeconomy projects benefitting from Thematic Investment Platform Financing. This action aims to tackle the funding gaps faced by innovative bioeconomy projects in the demonstration and commercial development phases through the launching of a new EU thematic financial instrument: the Circular Bioeconomy Thematic Investment Platform. The launching of this new EU thematic financial instrument follows a recommendation made in the InnovFin Advisory study by the European Investment Bank on access-to-finance conditions for investments in two key areas of the EU Bioeconomy – the bio-based industries and the blue economy. The study has identified gaps in private capital funding in these areas for projects seeking to scale up from pilot to demonstration phases, and from demonstration to flagship and industrial-scale phases. This stems from the inherent risks of investing in innovative projects in the bioeconomy and the often large capital expenditure needs of such projects. Insufficient access-to-finance makes it difficult for projects to reach the later development phases and might even push some to deploy outside the EU. The Circular Bioeconomy Thematic Investment Platform will aim to tackle these access-to-finance issues by de-risking innovative projects vis-à-vis private investors, leveraging EU funds to help mobilise private investment in them. In addition to the bio-based industries and the blue economy, it will also cover closely related sectors, such as agriculture and forestry. The deployment of funded projects is expected to contribute to the Sustainable Development Goals, as well as to the EU priorities on climate, the Circular Economy and sustainable finance. It is also expected