Source: EURLEX
Language: en
Format: md

*|*

# 52013SC0247

**COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a COUNCIL REGULATION on the Bio-Based Industries Joint Undertaking /\* SWD/2013/0247 final \*/**

  

TABLE OF CONTENTS

1........... Procedural issues and
consultation of interested parties.................................................... 4

1.1........ Background to the development of
the proposal.............................................................. 4

1.2........ Organisation and timing................................................................................................... 5

1.3........ Consultation and expertise.............................................................................................. 5

1.4........ Results of the Impact Assessment
Board consultation...................................................... 6

2........... Problem definition........................................................................................................... 7

2.1........ Bio-based industries in Europe........................................................................................ 7

2.2........ Bio-based industries as a source
of green growth............................................................. 8

2.3........ The national and regional
potential of bio-based industries.............................................. 11

2.4........ International competition............................................................................................... 13

2.5........ Technological and innovation
challenges of bio-based industries in Europe...................... 14

2.6........ Underlying problem drivers........................................................................................... 16

2.7........ Need for EU intervention.............................................................................................. 18

3........... Objectives.................................................................................................................... 23

3.1........ Description of objectives............................................................................................... 23

3.2........ Consistency of objectives with
other EU policies and objectives..................................... 26

4........... Policy Options.............................................................................................................. 27

4.1........ Option 1 – Business as Usual........................................................................................ 27

4.2........ Option 2 – Contractual PPP......................................................................................... 28

4.3........ Option 3 – Institutional PPP.......................................................................................... 28

5........... Assessment of impacts.................................................................................................. 33

5.1........ Input parameters........................................................................................................... 33

5.2........ Output parameters........................................................................................................ 38

6........... Comparing the options and
selecting the preferred option............................................... 46

6.1........ Comparison of the three options.................................................................................... 46

6.2........ Justification of ratings based
upon the assessment of impacts.......................................... 46

6.3........ Preferred option........................................................................................................... 47

7........... Evaluation and Monitoring............................................................................................. 47

7.1........ Operational monitoring.................................................................................................. 47

7.2........ Monitoring progress of technology
and markets............................................................. 49

7.3........ Performance evaluations of the JU
to be conducted from outside the JTI........................ 49

7.4........ Monitoring the financial
commitment by industry............................................................ 50

Annexes..................................................................................................................................... 50

Annex 1 – Glossary.................................................................................................................... 50

Annex 2 – Bio-based industries – Market
players and the "BIC".................................................. 50

Annex 3 – Strategic Innovation and Research
Agenda (SIRA)..................................................... 50

Annex 4 – Report on the European Commission's
on-line public consultation................................ 50

Annex 5 - Current and future potential of
biomass as a source of materials and energy.................. 50

Annex 6 – Definition of Technology Readiness
Levels (TRLs)...................................................... 50

Annex 7– Overview of research and innovation
at regional and national level................................ 50

Annex 8 – Example of a regional bioeconomy
cluster moving up-scaling activities outside the EU.. 50

Annex 9 – Detailed description of the
specific objectives and link to wider policy context............. 50

Annex 10 – Examples illustrating the
potential socio-economic impact of a option i-PPP............... 50

Annex 11 – Bibliography of the Impact
Assessment..................................................................... 50

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

Proposal for a
COUNCIL REGULATION

on the Bio-Based Industries Joint
Undertaking

1.           Procedural
issues and consultation of interested parties

1.1.        Background
to the development of the proposal

The Communication outlining the European
Bioeconomy[1]
Strategy, adopted on 13 February 2012[2]
proposes the creation of a Public-Private Partnership (PPP) for bio-based
industries ("Bio-based PPP") as part of its Action Plan. The
Communication promoting a stronger European industry for growth and economic
recovery adopted on 10 October 2012[3]
reiterates the importance of setting up a Bio-based PPP in the form of a Joint
Technology Initiative (JTI) in the context of the EU's industrial policy. In
addition to defining the Bio-based PPP as a priority action point, both
Communications are committed to ensuring a coherent policy environment and
fostering markets for innovative bio-based products, creating a favourable
environment for the rapid deployment of the results arising from such a PPP.

Bio-based industries can make a significant
contribution to the smart, sustainable and inclusive growth objectives of the
Europe 2020 Strategy, and its flagship initiatives "Innovation
Union", "A Resource Efficient Europe" and "An Industrial
Policy for the Globalisation Era". This has been recognised in several
recent policy initiatives, such as the European Innovation Partnership for
Agricultural Productivity and Sustainability[4]
and the proposal for rural development under the revision of the Common
Agricultural Policy (CAP)[5],
the Smart Specialisation Strategy for Member States and Regions[6] and the proposal for the 7th
Environmental Action Programme[7].
The Committee of the Regions (CoR) has also underlined the important role of
bio-based products and a bio-based society in Europe in its opinion on the
European Bioeconomy Strategy end of November 2012[8].

PPPs have been identified as instruments to
address societal challenges and strengthen European competitiveness in the
Communication on partnering in research and innovation (R&I)[9]. They leverage additional
private investments and have to be seen as a measure to enhance growth and
create jobs. Criteria for the establishment of such PPPs in the area of R&I
have been included under Article 19 of the proposal for Horizon 2020, the
Framework Programme for Research and Innovation for the period 2014-2020[10].

An industry group backing the proposal for
a Bio-based PPP has been active since end of February 2012 and is grouped in
the Biobased Industry Consortium (BIC). The BIC includes representatives from
different industrial sectors (including pulp and paper, biofuels, chemicals,
sugar and starch, biotechnology) as well as several trade associations (e.g.
the association of European Farmers and Farmer associations COPA-COGECA) and
regional or national cluster organisations, a more detailed description of the
BIC is provided under Annex 2. The group delivered a vision document in May
2012[11].
It also prepared the Strategic Innovation and Research Agenda (SIRA) for the
PPP in close interaction with research organisations across Europe that is
included in Annex 3.

The proposed Bio-based PPP has been
included in the Commission Work Programme for 2013[12].

1.2.        Organisation
and timing

This ex-ante Impact Assessment was prepared
by DG RTD. It was supported by the Commission Inter-Service Group (ISG) created
in June 2012, which included DGs AGRI, BUDG, COMP, CNECT, EMPL, ENER, ENTR,
ENV, ESTAT, HR, JRC, MARKT, MOVE, SANCO, SG and the Legal Service. Meetings
have been held for all major steps in the development of the Bio-based PPP initiative
on 28 June 2012, 20 July 2012, 20 September 2012, 22 November 2012 and 12
December 2012.

During the last ISG meeting of 12 December
2012, a range of questions was discussed relating to the leverage of the
proposed Bio-based PPP, the use of structural funds and links to Member States'
and Regional activities, links to Bioeconomy Panel and Observatory, PPP funding
mechanisms and risk awareness and mitigation of external factors. A good
collaboration was established between DGs RTD and REGIO in the context of the
Bioeconomy Strategy implementation, during which bio-based industries were
extensively discussed, at bilateral meetings on 9 December 2012, 19 July 2012
and on 15 March 2013.

1.3.        Consultation
and expertise

A wide range of sources were consulted in
preparation of this Impact Assessment:

·
A public consultation on the proposed Bio-based
PPP took place from 21 September to 14 December 2012[13] and received 638 valid
responses. 64.6% of responses came from the private sector, 24.6% from
academia, 8.8% from the public sector and 2% from NGOs. Responses were received
from 19 out of 27 Member States, with most replies coming from Poland, followed
by the Netherlands, Germany, Spain, France, Belgium, Sweden, Finland, Italy,
Austria, the UK, Romania, the Czech Republic, Portugal, Denmark, Ireland,
Hungary, Greece and Slovakia. Almost all respondents (94.3%) called for EU
intervention and 86.9% viewed a PPP as the most appropriate mechanism to
implement the R&I programme for bio-based industries under Horizon 2020,
and considered that it would have positive socio-economic impacts. Other key
messages were the need to strengthen EU innovation, to improve competitiveness
and to formulate clear intervention objectives for bio-based industries. The
results of the consultation were presented and discussed at a stakeholder event
on 9 January 2013 attended by 162 people and are addressed in the present
Impact Assessment. The full report of the online public consultation is
attached in Annex 4. A printed version is planned for June 2013.

·
The proposed Bio-based PPP implements a part of
the European Bioeconomy Strategy. Thus, the outcome of the public consultation[14] and a preparatory impact
assessment[15]
of the Strategy were also taken into account for this Impact Assessment.

·
Several events organised in the framework of the
Bioeconomy Strategy implementation allowed for regular and broad-based contacts
with stakeholders during the preparation of the Impact Assessment[16]. This included the conference
"Partnering for the Bioeconomy in European Regions" of 12 October
2012, co-organised by DG RTD and the CoR. During the conference, information on
a possible Bio-based PPP was provided and examples of regional activities
highlighted possible benefits of bioeconomy partnerships. During this event, DG
REGIO specifically informed about the Smart Specialisation Strategy, being part
of the rural development policy of the EU. It proposed focusing investments on
the bioeconomy where appropriate.

·
Several studies conducted in connection with the
bioeconomy, bio-based products and biofuels were consulted. These are
referenced throughout this document.

·
A group of ten external reviewers with expertise
relevant to the different parts of the bio-based industries value chain was brought
in to assist DG RTD with collecting and analysing the above data and preparing the
Impact Assessment.

1.4.        Results
of the Impact Assessment Board consultation

Following the opinion of the Impact
Assessment Board, the present Impact Assessment was revised as follows: 1) Section
1 "Procedural issues and consultation of interested parties" was
complemented with information on the interactions with relevant DGs; 2) Section
2 "Problem definition" was re-structured and strengthened
substantially to explain the intervention logic based on Horizon 2020 and the
European Bioeconomy Strategy, underlining how a new Bio-based PPP provides the
logical extension of and builds on lessons learnt from past research and
development (R&D) activities at European, national and regional level; 3) Section
3 "Objectives" was revised to clarify further the objectives of the
Bio-based PPP, in particular in the wider policy context; 4) Section 4 "Policy
options" was revised to include more detailed information on the policy
options; 5) Section 5 "Assessment of impacts" was strengthened with
information linking the impacts better to the technological and innovation
challenges and problem drivers; 6) Section 6 "Comparing the options and selecting
the preferred option" was revised to clarify the weighting of the options
in terms of cost effectiveness and efficiency; 7) Section 7 "Evaluation
and monitoring" was revised to describe in more detail the criteria and
methodology used to monitor the Bio-based PPP implementation.

2.           Problem
definition

2.1.        Bio-based
industries in Europe

Bio-based industries[17] are at the heart of the
European Bioeconomy Strategy and one of the main elements of the Communication
for a stronger European industry for growth and economic recovery in line with
the objective of the Europe 2020 Strategy.

In the past decade, a growing number of established
European processing industries (e.g. chemical, pulp and paper, and sugar and starch
industries) have explored moving partially or entirely towards innovative bio-based
products and biofuels in response to climbing oil prices, increasing global competition
in traditional markets and stricter environmental and energy efficiency targets.
This trend has given rise to the nascent sector of bio-based industries that is
defined by the use of innovative technologies to convert renewable biological
resources into innovative bio-based products and biofuels, which can replace
existing goods or open completely new markets.

Despite an increasing number of different market
players supporting the development of bio-based industries, the sector has been
struggling in setting up its value chains due to the wide range of players to
be involved, many of which have not worked together before, and to several
market failures. Overcoming these issues is all the more important as bio-based
industries are facing several technological and innovation challenges, which
are best addressed as part of a value chain approach.

The value chain can be roughly sub-divided
into three parts, as indicated in Figure 1:

·
Biomass production (upstream) – Raw material has to be sourced in a sustainable manner, for
example by collecting residues from the agriculture and forestry sectors or biodegradable
wastes;

·
Biomass processing/conversion – Two processing steps are usually distinguished, the pre-treatment
of the biomass and its conversion into bio-based intermediates and products or
biofuels. These two steps can be carried out by the same industry or by
different industries. Processing industries include the sugar and starch
industry, the chemical and pulp and paper industry, etc.

·
Bio-based markets (downstream) – The output from the processing industry can be a final product,
e.g. in the case of biofuels, or may have to be further transformed into a
final product by another industry or consumer brand, e.g. bio-based fine and
specialty chemicals for the pharmaceutical or cosmetic industry.

Figure 1: The value chain of
bio-based industries

More detailed information on the market
players required to constitute the value chains of bio-based industries is
provided in Annex 2.

2.2.        Bio-based
industries as a source of green growth

2.2.1.     The environmental potential
of bio-based industries

The European economy is heavily dependent
on fossil resources as source of carbon for energy and products[18]. Reducing this dependence is
paramount in view of the increasing depletion of fossil resources and their
impact on climate change. It is critical for Europe to meet its climate change
and energy efficiency targets by 2020 and to move towards a competitive low
carbon economy in 2050[19].
To achieve this, our industries and our society need to become more resource
efficient and expand the use of renewable biological resources as possible
substitutes for fossil ones. The need to do "more with less" and to
succeed in "living well, within the limits of our planet" is anchored
in recent policy initiatives, such as the European Bioeconomy Strategy, the
Roadmap for a Resource Efficient Europe and the proposal for the 7th
Environmental Action Programme to 2020.

The industrial sector is the third largest
user of fossil oil after transport and households. At present, only about 10%
of chemical products are derived from renewable resources[20][21]. While
it is unlikely that fossil resources can be entirely substituted by renewable
ones in the production of chemicals, fuels and other products, increasing the
percentage of renewable inputs in these industries can have a tremendous impact
on reducing fossil resource dependence. Replacing petro-chemical refineries by
biorefineries can significantly contribute to mitigating climate change. Estimates
show that the conversion of bio-based wastes into bio-based materials alone
could reduce emissions by up to 633 million tonnes of CO2[22]. The EU's total greenhouse
gas (GHG) emissions stood at 4,614.5 million tonnes of CO2-equivalents
in 2009[23].
As easily extractable high-quality fossil oil is increasingly scarce, more
cost-intensive alternatives are becoming competitive. The calculation of the
"energy return on investment" (EROI) for different fuels shows, that
certain conventional biofuels (e.g. bioethanol from sugarcane and biodiesel
from soy) can already compete with some fossil fuels (e.g. tar sands, heavy oil
from California) on the basis of their EROI today due to advances in technology
and innovation in the last twenty years[24].

By focusing on advanced biorefineries that
rely on non-edible biomass as a feedstock, European bio-based industries
respond to the concerns about the sustainable management of Europe's limited
natural resources, indirect land use change (ILUC) and food security, also see Box
1. On-going work to further improve the sustainability of agricultural and
forestry practices, and to develop standards and sustainability criteria for
bio-based products will contribute to meeting the EU’s policy objectives on
biodiversity and ecosystems[25].

Bio-based processes can also make
production processes more resource efficient and environmentally friendly. It
is considered that the use of industrial biotechnology in various production processes
already today avoids the creation of 33 million tonnes of CO2 per
year (excluding bioethanol). The full climate mitigation potential of
industrial biotechnology is estimated to range between 1 billion and 2.5
billion tonnes CO2 equivalent per year by 2030, which is more than Germany’s total reported emissions in 1990[26].

Several bio-based consumer products can
also make a direct contribution to mitigating climate change, such as
detergents with new cold water enzymes, which can reduce washing temperatures
from 40°C to 30°C. By washing laundry at 30°C rather than 40°C or 60°C, 32
million tonnes of CO2 could be saved in the US and Europe alone – this
corresponds to the emissions of 8 million cars[27].

Box 1: "Conventional"
versus "Advanced" biorefineries – How concerns about food security
and indirect land use change (ILUC) are being addressed in Europe

In order to reduce the dependence of their economies on fossil carbon,
the US, Brazil, the EU and other parts of the world have introduced ambitious
biofuel targets in the last decade. The increasing demand for renewable biological
resources (biomass) as carbon sources for industrial and energy purposes has
given rise to concerns about the impact these uses may have on food security,
scarce natural resources and the environment in Europe and third countries, in
particular with regard to ILUC.

In the light of these concerns, the EU has reviewed its strategy
since 2010 by applying approaches based on life-cycle analyses that taken into
account issues, such as food security, environmental protection and
sustainability, when developing bio-based industries. In contrast to many of
its global competitors, who continue to draw heavily on food crops to
kick-start their "conventional" biorefineries, the EU is addressing
these concerns by gradually shifting the feedstock base of these industries to
non-edible biomass between now and 2020 by investing in "advanced"
biorefineries. This is also clearly illustrated by two recent EU policy
initiatives – the European Bioeconomy Strategy and the proposal[28] for a revision of the
Renewable Energy[29]
and Fuel Quality Directives[30].

"Conventional"/"first-generation" biorefineries

The conversion of edible parts of food crops into biofuels or
bio-based products is technologically fairly easy. Sugars and starch from these
crops can be transformed into bioethanol through fermentation processes similar
to those used for the production of beer or wine. Vegetable oils can be
converted into biodiesel through processes similar to those used by the
petro-chemical industry for the production of plastics. Since the technology
used in these processes is already well-established and accessible, the
resulting products and processes are being referred to as
"conventional" or "first-generation".

"Advanced"/"second-generation" biorefineries

Transforming non-edible parts of plants (e.g. wood, agricultural and
forestry residues) and biodegradable wastes is more challenging. This biomass,
also referred to as ligno-cellulosic material, is usually heterogeneous and
contains a mix of different types of complex biomolecules (i.e. cellulose,
hemi-cellulose and lignin). The technology required for the transformation of
ligno-cellulosic material is more advanced and still under development, the
resulting products and processes are therefore called "advanced" or
"second-generation".

In the long-term, the aim will be to replace carbon from renewable
biological resources, as used in first- and second generation biorefineries, by
carbon from atmospheric CO2 using microalgae. The development of
such advanced "third-generation" technology is however still at a
very early stage.

2.2.2.     The socio-economic potential
of bio-based industries

Bio-based industries are a cornerstone of
the bioeconomy in generating growth and jobs. Although bio-based products and
biofuels currently only represent about 3% of the € 2 trillion in annual
turnover and 1% of the 22 million jobs generated by the European bioeconomy
today, bio-based industries are expected to grow more rapidly and substantially
than more traditional bioeconomy sectors[31][32]. The
potential of bio-based industries for generating growth and jobs has also been highlighted
in the updated Industrial Policy, the EIP for Agricultural Productivity and
Sustainability and the proposal for rural development under the revision of the
CAP.

Estimates from different sources consider
that:

·
The global revenue potential of the entire
biomass value chain for biorefineries could exceed € 200 billion by 2020[33];

·
The share of bio-based processes in all chemical
production is likely to increase from less than 2% in 2005 to 25% in 2025[34], and could reach 30% in Europe
by 2030 (>50% for high added value chemicals and polymers, less than 10% of
bulk commodity chemicals)[35];

·
The volume growth of EU bio-based chemical products
(including bio-plastics, bio-lubricants, bio-solvents, bio-surfactants and
chemical feedstock) will be at 5.3% per year up to 2020, resulting in a market
worth € 40 billion and 90,000 jobs within the bio-chemical industry alone[36];

·
Up to 75 billion litres of bioethanol could be
sustainably produced at a competitive cost by 2020, which would represent about
€ 15 billion in additional revenue for the agricultural sector[37];

·
The development for 2nd generation
bioethanol in the EU by 2020 could lead to almost 950 biorefineries generating
more than € 32 billion in annual revenue and 933 000 jobs (total man years from
2010 to 2020)[38].

2.3.        The
national and regional potential of bio-based industries

Given the diversity of Member States and
Regions in terms of geography, natural and technological resources, and
infrastructure, developing bio-based industries and their value chains opens
interesting opportunities for transnational and transregional cooperation
within Europe, especially in bringing together partners from primary production
and processing industries. Biorefineries need to be close to their feedstock
sources to be economically viable.

Figure 2: Indicative spatial biomass
potential for energy crops in Europe[39]

The use of biorefinery processes is
typically most advanced in Member States and Regions that already have a strong
chemical, biofuels, biotechnological or pulp and paper industry, where they
either complement or build on existing activities. Most of these industries are
situated in Austria, Belgium, France, Germany, Italy, the Netherlands, Spain the UK and Scandinavia. While several of these Member States dispose of
sufficient feedstock in the form of agricultural and forestry residues or waste
for demonstration activities and small- to medium-scale flagship biorefinery
plants, large-scale flagship biorefinery plants and deployment will need to rely
strongly on cooperation with new Member States. As indicated in Figure 2, these
have biomass resources that can still be better exploited by further improving
agricultural practices. When considering the setting up of biorefineries, the regional
biomass potential and its existing uses will however need to be carefully
assessed (e.g. through life-cycle assessments (LCAs)), as well as potential
impacts of these activities on biodiversity and ecosystem.

Bio-based industries in Europe will have to
invest in transnational and transregional cooperation in order to reach the
necessary economy of scale to be successful. Although early investments into
the development of bio-based industries are likely to benefit regions that
already have some bio-based industries or similar infrastructures in place
today, investments will increasingly shift to regions with substantial biomass
resources, as the technology reaches sufficient maturity for full deployment as
of 2020, see Figure 3 and Box 2. Bio-based industries thus can offer a win-win
situation for all interested Member States and Regions.

Figure 3: Potential socio-economic
impact of 2nd generation ethanol on EU in 2020[40]

The potential of the bio-based industries,
as part of the bioeconomy, to generate economic growth and jobs and assist with
the compliance with environmental policy objectives at a local and regional
level has also been recognised by the CoR. Regional and local authorities have
been encouraged to include the bioeconomy in their Smart Specialisation
Strategies[41]
from 2014 to 2020 and rural development activities in order to exploit this
potential and provide support to the development of these industries through
Structural Funds, see Section 2.7 for more details.

Box 2: The current
use of biomass for industrial and energy purposes

It is estimated that the total amount of biomass used in the EU for
energy and industrial material uses today lies at about 470 million tonnes,
including imported biomass[42].
The majority of this biomass (400 million tonnes) comes from forestry, of which
230 million tonnes are used for wood working and the pulp and paper industries,
and 170 million tonnes for energy (heat and power)[43]. The amount of biomass from
agriculture transformed into industrial materials and energy is estimated at 70
million tonnes. The majority of agricultural biomass (> 90%) goes to food
and feed.

The availability of additional biomass for uses beyond the current
levels of conversion into bio-based products was confirmed by studies from the
European Environmental Agency, the International Energy Agency and several
research projects funded by the EU. In order to ascertain the long-term
sustainability of EU biomass supply to bio-based industries, due account needs
however to be given to potential environmental considerations, such as the level
of agricultural residues that can be collected without negatively affecting
soil fertility and/or biodiversity, or potential effects on the water retention
of soils concerned. These and other environmental factors need to be assessed
as part of the decision-making process. Annex 5 to this Impact Assessment
provides a more detailed insight into this issue.

2.4.        International
competition

The US, Brazil and China are aggressively advancing the development of commercial-scale biorefineries through policy
targets and incentives, with a strong focus on conventional biofuel. Russia, India, Thailand and Malaysia are following suit. Generous government support schemes for
large scale demonstrators and first-of-a-kind industrial plants have motivated
several European companies to carry out the up-scaling of their technology to
commercial scale in these countries[44].
Some of these countries are also increasingly investing in advanced biofuels: about
$ 1.4 billion of select public funding was allocated to the development of
advanced biofuels in the US in 2011[45].

Compared to the US, which promotes the
commercialisation of bio-based products through its BioPreferred Program[46], the European market also
suffers from a relative absence of incentives at the product level. However,
the product portfolio of a biorefinery needs to be adjusted to the local
economic situation, e.g. in terms of feedstock, local and global demand.

Many European companies move abroad to be
closer to cheaper feedstock, e.g. sugarcane in Brazil, microalgae in Australia,
seaweed in Chile and South Korea, sugarcane and jatropha in India, and a mix of
biomass in South East Asia[47].
The increasing exploitation of shale gas for energy and industrial purposes, in
particular in the US and Canada, may also have an impact on the price and
availability of biomass in these countries

The EU cannot compete with these countries
in terms of biomass volume prices, and is likely to have to rely on imports for
bulk applications. Its technology base do however allow its bio-based
industries to compete if they concentrate on producing high added value
bio-based products and biofuels from Europe's limited resources. It is
therefore important for Europe to establish reliable biomass supply chains and
to optimise the use of this valuable resource to remain competitive.

The EU's focus on advanced biorefineries
gives other countries the first-mover advantage and critical mass in
conventional biorefineries, in particular for biofuel production. This also
provides them with a stepping stone for the development of bio-based products
and advanced biorefineries. In order to remain competitive, the EU will need to
leapfrog its competitors in terms of technology development, and establish
reliable supply chains for biomass.

2.5.        Technological
and innovation challenges of bio-based industries in Europe

In order to fulfil the potential of
bio-based industries and ensure their competitiveness in global markets, a
number of hurdles need to be overcome. These include four technological and
innovation challenges that arise from the strong emphasis of Europe on advanced
biorefineries. Since these complex and inter-connected challenges need to be
addressed in a coherent and integrated way, adopting a value chain approach is
likely to be the most cost-effective and efficient, given the dispersion of
market players.

2.5.1.     Accessing sufficient
sustainable feedstock

The potential for large contributions in
terms of socio-economic benefit and GHG savings from bio-based industries requires
that production infrastructure will be developed in the EU and that a
substantial share of the biomass can be locally obtained. It is therefore
essential that biomass is sourced in Europe in a sustainable way, e.g. by using
LCA approaches that take into account issues, such as the loss of biodiversity,
the damage to ecosystems, ILUC or negative effects on food security. Attention
will also have to be given to other industries that may rely on the use of
biomass.

Actions to be taken include assessing the
sustainability of integrating new solutions for residue removal in current
farming or industrial practices (e.g. preserving soil fertility), developing new
dedicated industrial crops that are optimised in terms of yield and quality, as
well as sustainable farming practices that take into account fertiliser and
water use. At a smaller scale, sustainable solutions to efficiently grow non-edible
crops on polluted or marginal land will be explored with a view to make the
best use of land that does not contribute to food/feed production.

Supply chains for residues from agriculture
and forestry, waste streams and dedicated industrial crops will need to be put
in place to overcome the lack of reliable and cost-competitive feedstock. This
will require the development of logistics and storage solutions to ensure
quality and availability of the feedstock, as well as the reduction of losses
along the supply chain.

Addressing this challenge will require the
establishment of new collaborations between market players from primary
production and processing industries, ideally by building value chains for the
main feedstocks in Europe.

2.5.2.     Developing efficient
conversion processes for advanced biorefineries

Processes for the conversion of feedstock
derived from edible parts of food crops are already well-established for the
use in conventional biorefineries, as their feedstock is usually homogenous and
composed of single type biomolecules (e.g. sugar, starch or vegetable oils)
that are easy to transform. For the feedstock targeted by advanced
biorefineries, efficient conversion processes are lacking, as they are usually
quite heterogeneous in terms of quality and composition, with a mix of
different types of complex biomolecules (mainly so-called ligno-cellulosic
material[48]).

As a consequence, new processes need to be
developed to separate, pre-treat and convert these feedstocks into bio-based
products and biofuels. A wide range of radically different technological
options (e.g. enzyme-based versus thermo-chemical processes) will need to be taken
forward simultaneously in a strong and multi-facetted research effort to
enhance process efficiency and optimise yields. Only when economic
competitiveness is reached, will new processes be commercially deployed and
start achieving further efficiency gains through economies of scale.

A major contribution to breaking barriers
to economic competitiveness of bio-based processes can come from technologies
enabling smart use of biomass. This implies that biomass is being used to make
multiple products in a process cascade that combines high added value
applications (e.g. high value ingredients) with production of lower added value
products (e.g. biofuels), but also opportunities for re-using and recycling
products. Smart use solutions require reinforcing research cooperation along
the value chain and across sectors. With sustainability as a guiding principle,
they can substantially optimise the use of biomass as a resource and maximise
the derived value.

Addressing this challenge will require
better interaction between market players from the processing industries with
other players along the value chains, in particular with biomass producers to
fine-tune the feedstocks and end-users to identify market demand for different
bio-based goods.

2.5.3.     Demonstrating and deploying
advanced biorefineries

It took more than 100 years to develop the
current (petro-)chemical industry, with its system of family trees of platform
chemicals. In order to compete with these industries, innovation efforts of
bio-based industries need to be bundled and biorefinery development needs to be
accelerated by promoting the rapid up-scaling from lab-scale research to pilot
and demonstration scale. To achieve this, fragmentation needs to be overcome
and cross-sectorial industrial synergies need to be identified and exploited.

Technological breakthroughs are required to
upgrade existing bio-based industries (e.g. pulp and paper mills, biofuels,
starch, chemical, etc.) into integrated biorefineries (i.e. multi-feedstock,
multi-product) and to develop new and scalable integrated biorefinery models
(e.g. ligno-cellulosic material, green grass). Significant investments in up-scaling
technology and infrastructure are needed to assess the relative merits of
radically different technology options and to identify winning option(s).

Addressing this challenge will require
better interaction between market players from the processing industries, as
well as end-users.

2.5.4.     Supporting demand-side
actions for the uptake of bio-based products

R&I efforts will play an important role
in removing obstacles to and promoting the uptake of bio-based products in
consumer markets and green procurement. The successful uptake of new bio-based
products and biofuels depends on customer acceptance. Sustainability criteria,
LCA approaches, standards, labelling and certification systems have to be
developed to allow product prices to appropriately reflect externalities and
assist consumers in making informed product choices, e.g. based on data on the
benefits of these products over the full product life-cycle from cradle to
grave.

Several demand-side actions are supported
by recent policy initiatives, such as the European Bioeconomy Strategy, the
updated Industrial Policy that builds on the Lead Market Initiative for Bio-based
Products[49],
the EIP for Agricultural Productivity and Sustainability and the proposal for
rural development under the revision of the CAP, and the Smart Specialisation
Strategy. R&I efforts involving actors along the whole chain (including
end-users, consumer organisations, NGOs, policy-makers, etc) will play an
important role in implementing these policies and designing effective new
policies.

Addressing this challenge will interaction
between market players along the entire value chain, i.e. biomass producers,
processing industries and end-users, as the success of bio-based industries
will strongly depend on the environmental performance of their outputs.

2.6.        Underlying
problem drivers

A number of market failures are causing
lack of investment in R&I activities necessary to overcome the four
technological and innovation challenges and the creation of new value chains
for bio-based industries.

2.6.1.     High risk and cost of
demonstration and deployment

"The development of the bio-based
economy is at an early and high risk stage, and no single industry or company
is capable of managing this phase of its development independently"[50].

By gradually shifting the emphasis from
conventional to advanced biorefineries due to sustainability and food security considerations,
the EU makes it difficult for its companies to build critical mass and
"first mover advantage" based on massive deployment of conventional
technologies. They face an additional challenge in breaking the technological
and economic barriers related to the development of advanced biorefineries
compared to their international competitors.

The need to move directly to the
development of advanced biorefineries also further exacerbates the lack of
significant levels of public support for demonstration and first-of-a-kind
investments in Europe. Companies considering expanding their activities in
bio-based industries in Europe therefore face a very high degree of risk when
investing in these technologies, especially SMEs.

Demonstration and flagship plants for
biorefineries come at an elevated cost, in particular in terms of
infrastructure (between € 5-100 million and € 50-1000 million respectively[51]). Essential parameters, such
as market development, evolution of the price of fossil resources, policy (e.g.
public support levels for biofuels and biomaterials), can have a significant
impact on the return on investment and present a substantial degree of
uncertainty. As a consequence, it is difficult to attract large private
investors before proof of concept at demonstration scale.

2.6.2.     Knowledge spill-overs

Many successful biorefinery technologies
will eventually be deployed at a large scale and in multiple locations. While
certain technologies can be protected and commercially exploited on a broad
scale (e.g. patenting of novel enzymes), many innovations (e.g. organisation of
an effective biomass supply chain) are inherently difficult to protect. The
benefit of the results will thus flow to society at large
("spill-overs").

With many key players in the bio-based
industries being relatively small, few companies can expect to fully
"internalise" the benefits of their research, i.e. convert the
results in income streams to the exclusive benefit of their company. As a
consequence, the private sector is likely to allocate fewer resources to this
type of R&I activities, resulting in lower than optimal research spending
levels.

2.6.3.     Nascent and fragmented
industrial sector

Mobilising the necessary R&I resources
is difficult for a nascent and fragmented industrial sector, such as bio-based
industries, because it is difficult for it to get the necessary visibility.
Although many industrial sectors have a stake in activities contributing to
their development, there are currently hardly any major players that have a
large and fully dedicated R&I budget for the development of bio-based
processes and products.

A comparison of R&I budgets of leading
companies in industrial biotechnology, pharmaceutical biotechnology and plant
biotechnology shows that the company with the highest research and development
(R&D) budget in industrial biotechnology spends about five times less than
the largest player in agricultural biotechnology and almost two orders of
magnitude less than the largest pharma player[52].
R&D budgets for industrial biotechnology are also significantly smaller
than those of large international players in the (petro-)chemical industry[53].

Furthermore, the sourcing of sufficient
quality biomass on the supply side and the need to support demand-side
activities through the development of standards, labels and sustainability criteria,
requires collaboration beyond the processing industries. Key players along the
value chain are often located in different Member States.

2.6.4.     Transaction cost

The development of successful value chains
for bio-based industries requires the involvement of different players, ranging
from primary producers, biorefineries to industrial users and consumer brands.
However, working together in complex multi-party R&I collaboration models
implies many research interfaces and high transactions costs for the companies
involved. The issue is aggravated by the strong need for non-traditional
R&I collaborations, i.e. bringing together parties that have not worked
together closely in the past or involving parties with no tradition of
conducting in-house R&I, e.g. when determining sustainability criteria for
production processes and products.

A partial and frequent response to this
issue is the use of joint-venture models, even by larger companies. A growing
number of European bio-based companies are involved in joint-venture type
collaborations. However, there seems to be a trend to establish these
joint-ventures with non-EU companies and to transfer the construction of new
production plants outside of Europe mainly due to easier access to finance
(subsidies and loans) for demonstration and first-of-a-kind production
facilities.

2.6.5.     Policy framework

Bio-based industries and their value chains
are subject to a wide range of established and emerging policy areas at EU,
national and regional level, leading to a complex and sometimes fragmented
policy environment. Although most of these policies are favourable to the
development of these new industries, the targets and incentives they formulate
are often not as strong as those of comparable policies in other countries
(e.g. the US has introduced clear target volume for bioethanol by 2022, while
the EU speaks of a 10% target for renewable energies in transport), also see
Section 2.4. Furthermore, there has been an increasing sense of uncertainty due
to a strong public opinion on the food versus fuel debate and ILUC.

2.6.1.     Uncertainty around resource
availability

Lack of reliable data on the availability
of and demand for sustainable biomass in Europe for industrial and energy
purposes is hampering solid forecasting of a realistic scope and scale for
bio-based industries. This makes it difficult to fully assess the return on
investment in terms of environmental, economic and social impact.

2.7.        Need
for EU intervention

Horizon 2020 foresees activities supporting
the development of bio-based industries under two pillars "Societal
Challenges" and "Leadership in Enabling and Industrial
Technologies", see Section 5 for more details. It thus ensures the
continuance of the activities carried out under the Seventh Framework Programme
for Research and Technological Development (FP7) which started in 2007 and is
ending in 2013. Horizon 2020 provides the right framework to facilitate the
kind of cross-border, cross-sector, interdisciplinary research and innovation
effort required to address the technological and innovation challenges and
mitigate the market failures bio-based industries are facing.

In particular, Horizon 2020 will provide
increased funding for innovation activities in order to achieve higher
Technology Readiness Levels (TRLs) than FP7, see Annex 6. However, this will
not be sufficient to overcome important weaknesses, such as lack of access to
state-of-the-art demonstration plants and of collaboration between stakeholders
along value and supply chains. The programme does not offer the tools to create
the critical mass, see Box 3, and to address the risk involved in moving to
higher TRLs. These require costly demonstration, flagship and first-of-its-kind
biorefinery plants. The implementation of innovation activities at high TRL
levels (4 to 8) requires strong involvement levels of industry which are
typically not achievable under Collaborative Research as experience under FP7
has shown, even with increased investment in innovation activities under
Horizon 2020. This is why the European Bioeconomy Strategy and the updated
Industry Policy have been calling for a PPP on Bio-based Industries.

A large majority of participants in the
online public consultation on the Bio-based PPP proposal (94.3%) were
favourable to an EU level intervention and confirmed that there are four major
areas requiring immediate action in terms of R&I: a) Achieving the required
level of investment into R&I activities; b) Ensuring EU wide cooperation
between all stakeholders along value chains; c) Providing improved policy
coherence; and d) Promoting non-traditional partnerships (e.g. transnational,
cross-sectorial). It also found that a value chain approach, e.g. in a PPP,
would allow to address these challenges in the most cost-effective and efficient
way given the current dispersion of the market players required to tackle them.

Box 3: Critical mass for the creation of bio-based value chains Bio-based industries are a very promising nascent sector, which will however have to overcome several technological and innovation challenges and market failures to be successful. Addressing these in the most efficient and effective manner requires bringing together all the key market players, many of which have not worked together in the past, which has the added benefit of creating ownership and ensuring better harmonisation and standardisation in the setting up of the sector. Critical mass in this context is defined by a combination of framework conditions that allow for: · Bringing together all industry players along the value chain; · Formulating a long-term, industry-driven, consensus-based strategic innovation and research agenda (SIRA); · Raising private and public resources commensurate with the ambition or the SIRA (leverage effect); · Implementing this SIRA through cross-border, cross-sector, interdisciplinary research; and · Going beyond R&D into standard setting. Consultation of stakeholders suggests the critical mass for achieving this implies the: · Securing of sufficient and reliable feedstock supply that is sustainably sourced, e.g. by involving: · At least 50% of the biggest forest-based industry companies; · A significant part of the agro-food industry (since 99% of these are SMEs, a 50:50 balance between big industry and SMEs should be targeted); · Leveraging private investment into research activities from bio-based processing industries to a similar level than that from the pharmaceutical industry. · Ensuring access to and investment into infrastructure for up-scaling. · Representation of all Member States as appropriate based on their bioeconomy potential. · Developing five value chains based on the key feedstocks available in Europe. The BIC already includes many of the key players in this area, see Annex 2, and is reaching out to those who are not yet involved.

2.7.1.     European added value

Several Member States and associated
countries have developed bioeconomy strategies and initiatives that support the
development of bio-based industries, see Annex 7. However, while some Member
States have mature national bioeconomy strategies (e.g. Germany, the Netherlands, Sweden and Denmark), others are still developing their strategies (e.g. France and Italy) or only have regional initiatives (e.g. Belgium). The strategies and initiatives
typically reflect the geography, natural and technological resources, and
infrastructure of a Member State or Region.

Many bioeconomy initiatives build on close
cooperation between the public and the private sector and support the
development of bio-based industries at a national or regional level. In
particular bioeconomy clusters are often set up in the form of PPPs, such as
the clusters IAR in France, Wagralim in Belgium, CLIB 2021 in Germany and BE-BASIC in the Netherlands. Several of these initiatives have also recognised the
importance of cross-border collaboration, as illustrated by the partnering
between IAR and Wagralim, or CLIB 2021 and BE-BASIC.

Although these collaborations between
clusters look promising at first sight, they are often affected by differences
in funding levels and financing rules in and a notion of competition between
the Member States and Regions. It is therefore challenging for such transnational
collaboration to achieve the necessary economy of scales to establish
competitive bio-based industries value chains. Many national/regional clusters
are more likely to be involved in collaborations with partners in third
countries with more favourable framework conditions and incentives, such as Brazil, Malaysia, US and Canada. An example of a bioeconomy cluster deploying its technology abroad
is provided in Annex 8.

The success of regional bioeconomy clusters
in mobilising relevant players at regional level shows that PPPs are a good
instrument to promote the development of bio-based industries value chains. The
hurdles they encounter when trying to deploy their potential beyond the
regional level in Europe despite an increasingly favourable policy environment
confirms the need for an initiative at EU level that provides them with the
necessary strategic framework and critical mass to overcome these limitations.

2.7.2.     Lessons learnt – Collaborative
research under FP7

The EU has funded a wide range of projects
contributing to the advancement of bio-based industries under its Framework
Programmes for Research and Technological Development (FPs) in the past
decades, notably under the FP7 Specific Programme on "Cooperation". Theme
2 "Food, Agriculture and Fisheries, Biotechnology" is currently
financing 100 "Collaborative Research Projects" (CPs) and
"Cooperation and Support Action" (CSAs) in the Activity "Biotechnologies"
with an EU contribution of about € 400 million. These have improved the
knowledge- and technology base on a wide range of areas, namely:

·
Novel sources of biomass and bioproducts
and aquaculture – Projects under this
area focus on improving our understanding of the genetics of plants and other
organisms in support of breeding and the development of cell factories, as well
as deliver feedstocks and precursors to bio-based industries, fostering the
optimisation of biomass for industrial purposes;

·
Marine and fresh-water biotechnology (blue
biotechnology) – Projects under this
area aim to exploit the potential of marine and fresh-water resources (e.g. new
enzymes) for use in industrial applications;

·
Industrial biotechnology: novel high
added-value bio-products and bio-processes –
Projects under this area aim to develop and apply industrial biotechnology for
the production of high added value products, and explore novel bio-based fine
and specialty chemicals (e.g. food additives, pharmaceuticals);

·
Biorefinery – Projects under this area use industrial
biotechnology to convert a range of different biomass sources into bulk bio-based
products (e.g. biochemical and biopolymers;

·
Environmental biotechnology – Projects under this area develop biotechnological
solutions for preventing and cleaning pollution, and bioremediation of polluted
land (e.g. near mining sites) and water (e.g. waste water, oil spills);

·
Emerging trends in biotechnology – Projects under this area aim to advance biotechnology as a
tool or Key Enabling Technology by developing systems biology, synthetic
biology, bioinformatics etc.

CPs typically have TRLs from 2 to 5. As a
consequence, only about 8% of the EU contribution under this Activity went to
demonstration activities. High SME participation rates were achieved in certain
targeted calls (up to 30% of the EU contribution in call FP7-KBBE-2012-6), but
large industry participation was rather limited. While total industry
participation (as share of EU contribution) peaked at 35 % in the 2012 call, it
was on average between 15 and 20% during FP7 so far.

Given the multidisciplinary nature of
biorefineries, DG RTD in 2009 organised a Joint Call on biorefineries involving
four Themes of the Cooperation Programme (Theme 2, Theme 4 "Nanosciences,
Nanotechnologies, Materials and New Production Technologies, Theme 5
"Energy", and Theme 6 "Environment"). Three flagship CPs (BIOCORE
EUROBIOREF and SUPRABIO) and one CSA (Star-COLIBRI) were selected with a total EU
contribution of about € 50 million. The Call revealed the existence of a large
research and industrial community committed to taking biorefineries forward.

The three CPs are on-going and developing
multi-product biorefineries. The substantial budget dedicated to demonstration
activities (TRLs 4-8) in all three shows on one hand, that there are a number
of biorefinery technologies and concepts ready to be scaled up from the lab, on
the other hand, that more support is needed for up-scaling activities. This was
confirmed by the results of Star-COLIBRI, which aimed to overcome fragmentation
and promote cross-fertilisation in the area of biorefinery research. The
project ended in 2011. One of the main conclusions from its reports is that
Europe could be a world-leading, competitive bio-based economy by 2030,
provided that European bio-based industries utilise biomass in an efficient and
flexible manner and focus strongly on value added products.

The results from Star-COLIBRI and the experience
of the past years shows that Europe has a strong research base in the area of
bio-based industries, but also that there is a demand for projects with higher
TRLs at EU level. While FP7 projects in the area of biotechnology are contributing
to advancing the knowledge and technology base for bio-based industries in
Europe in many areas, their impact is lessened by the fact that their findings often
only cover small and very different parts of the technological and innovation challenges
the sector is facing (e.g. developing standards for certain bio-based products,
discovering new enzymes for a specific type of feedstock), see Section 2.5.
They are thus difficult to connect and integrate with each other, especially
given the dispersion of the market players, and may thus not always provide the
most cost-effective and efficient solution.

More support is needed to take the results
from this research to higher TRLs in view of bridging the "valley of
death" for innovations. This is why a working group has been put in place
to identify how TRLs can be integrated in Horizon 2020 and how activities
"close to the market" should be defined.

Although SME participation has improved
under FP7, it is considered that this was not sufficient to strengthen
innovation content and that more attention should be given to quality of
participation and constructive engagement[54].
The limited participation of large industry is also seen as a hurdle to be
tackled given their critical role in bringing new technologies and products
closer to the market.

2.7.3.     Lessons learnt – PPPs on
research and innovation under FP7

There is no precedent for a PPP on
Bio-based Industries under FP7. As a new initiative, it will have to base
itself on the lessons learnt from existing PPPs under FP7 (contractual PPPs and
Joint Technology Initiatives (JTIs)).

PPPs are an innovative way of implementing
EU R&I policy. An assessment of PPPs under FP7[55] showed that they can play a
significant role in mitigating market failures that are hindering R&I
activities necessary for the resolution of technological challenges. In
particular the stable and long-term framework of JTIs through the development
of strategic R&I agendas succeeds in bringing together key stakeholders
from relevant industrial sectors (almost 30% of call participants in all JTIs
were SMEs) and to leverage significant private investment (€ 1 EU contribution
was matched by about € 1.5 in private investment for all JTIs taken together).

PPPs under Horizon 2020 will differ from
those created under FP7 by the possible extension of their range of activities
to demonstration and deployment. They will also address several recommendations
formulated for future PPPs:

·
The PPP needs to be open to new participants during
its implementation;

·
The commitment from industry needs to be
stronger;

·
A stronger focus is needed on generating
measurable output and innovation;

·
The structures and instruments used for
implementation need to become simpler and less bureaucratic[56], e.g.:

·
Reduced administrative costs for participants;

·
Faster processes for the selection proposals and
the management of grants;

·
Decreased financial error rate.

A more detailed description of the two PPP
types is provided under Section 4.

2.7.4.     Conclusions

Certain funding mechanisms applied at EU
and regional level – in particular large and integrated biorefinery projects
and regional bioeconomy clusters – are a first step in the right direction in
that they apply a value chain approach to R&I, support demonstration and
deployment activities, and encourage transnational collaboration. However, the
existing initiatives have not succeeded in reaching the critical mass required
to overcome fragmentation and create integrated bio-based industry value chains
in Europe. The impact of these funding mechanisms could have been even better
if they had been part of an integrated long-term strategic vision for bio-based
industries in Europe that gives more support to demonstration and deployment
activities.

A Bio-based PPP Industries will give a
strong political signal at EU level. It provides a stable long-term framework
that allows for strategic programming with industry. This will be critical in
leveraging and securing long-term investments from the private sector, in
particular for demonstration and deployment activities. The prospect of a
possible new Bio-based PPP brought together a group of companies and several regional
initiatives and clusters in the Biobased Industries Consortium (BIC), also see
Annex 2. This demonstrates that many actors "in the field" endorse
the need for decisive EU action beyond the foreseen Collaborative Research
under Horizon 2020. The relevance and timeliness of such an initiative is also
supported by the strong response to the Public Consultation on a Bio-based PPP,
which received 673 replies, and the fact that 94.5% (strongly) agreed with the
need for EU intervention.

In addition to leveraging private
investments from industry, a Bio-based PPP will also provide a unique framework
to facilitate synergies between different financing mechanisms and instruments
at EU level to support converging policy objectives. These synergies will
increase the scope and scale of policy-driven actions, in particular in
combining R&I with demonstration and deployment activities. Funding
mechanisms and instruments include Horizon 2020, Structural Funds[57], European Investment Bank
(EIB)[58].
Contributions from Member States could also be associated to these activities.

In relation to possible contingencies with
EU competition on State Aids[59]
it has to be considered that State Aid rules for risk finance aim at
facilitating public support to fill the "equity gap" for new market
entrant. State Aid modernisation will extend those rules beyond pure equity
instruments, in order to avoid the "valley of death" effect between
the start-up phase and the first revenue streams.

State Aid policy also allows for
R&D&I support. Since 2007 more than 200 schemes for R&D&I have
been approved upon notification and an even larger number authorised on the
basis of the block-exemption regulation. State Aid modernisation aims to direct
public spending towards areas of growth. Today Member States allocate 46% of
public aid towards competitiveness-enhancing objectives (such as innovation,
research and development, environment, energy saving, risk capital, training).
A further 26% corresponds to aid aiming at reducing disparities between regions.

3.           Objectives

3.1.        Description
of objectives

The PPP on Bio-based Industries is
supported by research and innovation activities under two pillars
"Societal Challenges" and "Leadership in Enabling and Industrial
Technologies", see Section 5 for more detailed information. The general
and specific objectives formulated for the PPP below are in line with the
objectives of the respective parts of Horizon 2020.

3.1.1.     General objective

Bio-based industries can significantly
contribute to achieving smart, sustainable and inclusive growth in Europe by
2020 and making the transition towards a low-carbon economy by 2050. Biorefineries
can reduce the dependence of the European economy on fossil resources and
contribute to the EU's climate change and energy targets, as they rely on biomass
and more resource efficient and sustainable processes for the production of
bio-based products and biofuels.

The strong growth potential of bio-based
industries can lead to significant economic growth and job creation by 2020 and
beyond, if Europe succeeds in maintaining and enhancing its competitiveness in
this area. The development of biorefineries and their supply chains offer new
sources of revenue for rural areas.

Based
on the above and Section 2, the general objective of the proposed PPP is to contribute
to a more resource efficient and sustainable low-carbon economy and to increasing
economic growth and employment, in particular in rural areas, by developing
sustainable and competitive bio-based industries in Europe, based on advanced
biorefineries that source their biomass sustainably.

3.1.2.     Specific objectives

In order to achieve the overall objective, the
proposed PPP will assist bio-based industries in addressing the technological
and innovation challenges and overcoming the market failures that are currently
hindering them, as described in Section 2. The specific objectives are to:

·
Demonstrate technologies that enable new
chemical building blocks, new materials, and new consumer products from
European biomass and which replace the need for fossil based inputs;

·
Develop business models that integrate economic
actors along the whole value chain from supply of biomass to biorefinery plants
to consumers of bio-based materials, chemicals and fuels, including through
creating new cross-sector interconnections and supporting cross-industry
clusters; and

·
Set up flagship biorefinery plants that deploy
the technologies and business models for bio-based materials, chemicals and
fuels and demonstrate cost and performance improvements to levels that are
competitive with fossil based alternatives.

The specific objectives, see Figure 4 and
Annex 9 for more detailed information, have been elaborated based on the
technological and innovation challenges and in consultation with the BIC
(>40 companies, several trade associations and ETPs), Research and
Technology Organisations (RTOs), universities and SMEs. Since some aspects of
the proposed activities will also be supported under other parts of Horizon
2020 and PPPs (e.g. SPIRE), docking points for cross-cutting activities will be
defined to avoid duplication.

Figure 4: More detailed discussion of
the specific objectives and their relationship to general and operational
objectives

When implementing the specific objectives,
three types of R&I activities can be distinguished. They fall in the TRL
range of 2 to 8:

·
Type 1 R&I
assists in improving the sourcing of sustainable biomass (TRLs 2-4) and
develops technologies (TRLs 2-4) that make non-edible biomass accessible for
conversion into chemical building blocks, chemicals, materials and fuels, which
either substitute existing fossil-based equivalents or are entirely new (e.g.
new characteristics and functionalities). These technologies are then up-scaled
(TRLs 5-8). Some of the outputs from this R&I could go directly to market
after being brought to commercial scale (e.g. biofuels), others may undergo
further manufacturing step or require Type 2 R&I.

·
Type 2 R&I
develops technologies to make new bio-based chemicals, materials and products
from the outputs of Type 1 R&I, especially from those that are entirely new
(TRLs 2-4). These are then tested for use in consumer products (TRLs 5-8).
Again, these either substitute existing fossil-based equivalents or are
entirely new. While some outputs may go through a further manufacturing step to
become a final product, others may go directly to the market after being
brought to commercial scale. Type 1 and 2 R&I can take place in the same
company.

·
Type 3 R&I
supports the development and testing of sustainability criteria, life cycle
assessment tools, standards, certificates, labels etc., which are crucial to
support the uptake of bio-based products and biofuels in consumer markets and
green procurement. Activities need to span the whole value chain, as the overall
sustainability of a bio-based product or biofuel depends on the sustainability
of the different production steps.

An overview linking the different types of R&I
activities to be carried out under a Bio-based PPP to its objectives is
provided under Figure 5. Another correlation is provided in Table 3 under
Section 5.

Note: The PPP on
Bio-based industries only covers the coloured boxes. TIC = Technological &
Innovation Challenges, SO = Specific objective

Figure 5: Linkage between specific
objectives and technological and innovation challenges

3.2.        Consistency
of objectives with other EU policies and objectives

The general and specific objectives of the
proposed Bio-based PPP make it a driver of smart, sustainable and inclusive
growth, in line with the objectives of the Europe 2020 Strategy and its
flagship initiatives "Innovation Union", "A Resource Efficient
Europe" and "An Industrial Policy for the Globalisation Era".

Through the implementation of its
objectives, the Bio-based PPP can significantly contribute to meeting the EU's
targets on climate change and energy efficiency. Its objectives are also in
line with those of several recent policy initiatives, such as the European
Bioeconomy Strategy, the updated Industry Policy, the EIP for Agricultural
Productivity and Sustainability and the proposal for rural development under
the revision of the CAP, the Smart Specialisation Strategy and the proposal for
the 7th Environmental Action Programme, as well as the proposal to amend the
Renewable Energy and Fuel Quality Directives with regard to ILUC[60]. See Annex 9 for more detailed
information.

Several of these policies and their evolution
will strongly influence the eventual impact of the PPP. At the same time, the
PPP will provide research- and innovation-based inputs that can help shaping
the regulatory environment.

4.           Policy
Options

The Commission proposal on Horizon 2020,
which is currently under discussion, envisages activities supporting bio-based
industries under two pillars "Societal Challenges" and
"Leadership in Enabling and Industrial Technologies". The Horizon
2020 proposal was subject to an earlier impact assessment[61].

Since R&I activities supporting
bio-based industries are foreseen under Horizon 2020, the present impact
assessment will use Horizon 2020 as a baseline or “zero option”, against which
the two different forms of PPPs that can be created in accordance with Horizon 2020
will be analysed. The aim is to identify the most cost effective and efficient
option to support the development of sustainable and competitive bio-based
industries in Europe in view of the problems identified under Section 2. A
schematic comparison of three options on several parameters is included in
Table 1.

The three options will be compared assuming
the allocation of an EU contribution of € 1 000 million to bio-based industries
under Horizon 2020, which will be drawn from the Societal Challenge "Food
Security, sustainable agriculture, marine and maritime research and the
bio-economy" and the Key Enabling Technology (KET)
"Biotechnology". Cross-cutting activities with other parts of Horizon
2020 are foreseen, such as the Societal Challenge "Secure clean and
efficient energy" or the KET on "Advanced Materials", as well as
with other potential PPP initiatives, such as SPIRE.

Alternative scenarios with a reduced EU
contribution will not be taken into consideration as they would imply that
raising the necessary resources for demonstrating technologies and supporting
deployment at the relevant scale and across the five value chains, as described
under Section 3, will not be possible.

4.1.        Option
1 – Business as Usual

The "Business as Usual" option
(BAU) is based on Horizon 2020 only ("zero option"). This implies a
continuation of the Collaborative Research model applicable under FP7,
integrating Horizon 2020 improvements (e.g. more emphasis on demonstration). Projects
will be carried out jointly by several partners in accordance with the
conditions and rules for participation set out by Horizon 2020. The FP will:

·
Implement (bi)annual work programmes prepared by
the European Commission in consultation with Member States and stakeholders.
The work programmes are subject to approval by the Member States in the
Programme Committee and will be carried out by the Commission or by an
Executive Agency. Based on the experience from previous FPs, the BAU option
will: Cover a broad range of topics, depending on Member State policies and
stakeholders' interests in the area of bio-based industries;

·
Formulate specific objectives at the project
level, rather than supporting cross-project execution of an elaborated
long-term strategic vision;

·
Finance projects with a modest demonstration
component, typically covering TRLs from 2 to 5 rather than TRLs from 4 to 8;

Result in limited industrial participation (e.g. less
than 10% of large industries and up to 30% of SMEs in FP7), compared with at
least 60% share of participation of RTOs and academia.

4.2.        Option
2 – Contractual PPP

The "Contractual PPP" option
(c-PPP) implies a contractual agreement between the European Commission and the
private partners, who are organised in a dedicated industry group. This option gives
a stronger advisory role to the industry group, which proposes a SIRA. As under
BAU, standard Horizon 2020 rules and procedures fully apply, also with regard
to the preparation of the (bi-)annual work programmes, which are subject to
approval by the Member States in the Programme Committee. Therefore, c-PPP
option will:

·
Follow a similar programming approach as the BAU,
see above, that does not foresee the adoption of a long-term strategic research
agenda or of a large-scale multi-annual funding commitment from the EU;

·
Have a limited leverage effect in terms of
additional industrial investment in R&D&I.

4.3.        Option
3 – Institutional PPP

The "Institutional PPP" option (i-PPP)
involves the creation of a Joint Technology Initiative (JTI) established as a
Community body under Article 187 of the Treaty on the Functioning of the EU
(TFEU). It is foreseen under Article 19 of Horizon 2020 when justified by the
scope of the objectives pursued and the scale of the resources required.

As a Community body, the JTI has a
dedicated administrative structure with a governance system of its own, the so-called
Joint Undertaking (JU). The JU is constituted by the European Commission and
the private partners, who are organised in a dedicated industry group. It is in
charge of programming and implementing the JTI's activities. Funding rules
derogating from the general Horizon 2020 rules can be defined where necessary.
As a consequence, the i-PPP option will:

·
Allow for a long term EU and industrial budget
commitment, providing industrial partners with a stable long-term perspective
and an opportunity to adopt a long-term strategic innovation and research
agenda (SIRA);

·
Offer industry with a stable framework and the
opportunity to adopt a long-term strategic vision.

·
Provide greater scope for financial
contributions by the industry as funding rules derogating from the general
Horizon 2020 rules can be defined where necessary;

·
Fund projects that contribute to a strategic
long-term objective;

·
Put more emphasis on demonstration activities (TRLs
4 to 8), paving the way for industry to deploy and commercialise the results;

·
Attract substantial industrial participation
(typically at least 25% in research projects; more than 75% for demonstration
projects).

i-PPP is the only of the three options to include a
legally binding financial industry commitment. It builds upon the past
experience and the lessons learnt from JTIs operating under FP7 in other areas,
see Section 2.7. A JTI on Bio-based Industries will thus immediately benefit
from the improvements in design and suitability of the JTI instrument under
Horizon 2020, including simplified administration, lighter financial
procedures, possible use of common services/functions, and increased
stakeholder commitments to the JTI. The governance structure is described in
more detail in Box 4.

The principles of openness and transparency
applicable in Horizon 2020 will be fully respected in i-PPP. New stakeholders
interested in participating directly in the JTI will be able to join the JU.
This will ensure that actors in the bio-based industry that are not fully
involved in the initiative are not excluded. Non-EU organisations may also join
the JTI, provided that they fully adhere to its regulations and obligations.
The co-funding principle will be assessed for new stakeholders, also in
relation to the technical and financial risks to be assumed at each moment.

Member States have been involved as
additional public partners funding R&I activities in some JTIs under FP7.
This is not the case in the case in i-PPP, as it was considered that they could
have a much more significant impact on its success by facilitating the
deployment of the value chains developed in the JTI. As in all JTIs they will
participate in a Member States Representatives Group.

While the JTI would be established from
2014 to 2020, in line with the duration of Horizon 2020, the JU would need to
remain in place until 2024, in order to follow through projects selected in the
final years of the JTI until the end. A similar mechanism also exists for FPs.

Box 4: Governance of a JTI under Horizon 2020 In line with the Court of Auditors's (CoA) positive report on JTIs[62], the implementation of a JTI foresees: · Clear commitment of the stakeholders; · Visible legal, contractual and organisational framework to structure the specific joint commitments to which stakeholders are ready to sign up; · Firm governance structure, including shared decision-making powers and management by the public and private partners, visible to all stakeholders; · Budgetary certainty via the budget ceiling for EU contribution to cost of the operations and the private partners' financial commitment; · Efficient use of public resources as the Commission passes operational roles to the JU while retaining focus on regulation and supervision. · Even with the current small-sized bodies, JTIs are already approximately cost neutral for the Commission in comparison to Collaborative Research initiatives and contractual PPPs in terms of administrative, supervision, establishment and winding up costs, as shown by an in-house cost-benefit analysis by DG RTD[63]. The private partners pay 50% of the running costs of the JTI. Increasing the size of operations of JTIs and simplifying their functioning on the basis of the common participation rules for Horizon 2020 will make the JTI a cost-effective means of implementation. The following simplification measures are being considered to ensure a good balance between cost-neutrality of the JTI under Horizon 2020 and increase in cost-effectiveness: – Foreseeing a single set of Rules for Participation and Dissemination that will, subject to derogations where appropriate, render participation easier and ensure a single and sufficiently flexible regulatory framework, will create a more coherent set of instruments covering both research and innovation, enhance programme accessibility and attractiveness, and increase the scientific and economic impact while avoiding duplication and fragmentation. – Introducing lighter financial procedures, which reduce the staff needed for such functions, and thus lower administrative costs. Specifically, the new general Financial Regulation foresees a new category of body under centralised indirect management: the special EU body entrusted with the implementation of a PPP. This body is entitled to adopt financial rules based on a new, tailor-made, simplified "model" Financial Regulation proposed by the Commission. The draft proposal for a simplified "model" Financial Regulation includes the JTI/JUs in the general discharge procedure of the Commission. Such indirect discharge will lead to simplification, due to a relatively light procedure for the establishment of the budget and for financial reporting. – Using common IT systems, including the proposal evaluation system for Horizon 2020 which increases harmonisation, reduces the costs for such services and allows JU staff members to better adapt to the common software management programme. Moreover, by using the "commons" of the programme, the JUs coordinate better their internal processes regarding portfolio management, as well as monitoring and reporting towards the legislator and the Commission regarding management of programmes and projects. – Exploring different options regarding establishing common services/functions (IT, Audit, Legal issues) for PPP/JTIs. These options are: 1) Commission provides common services to JTIs/JUs and requests from them the payment of a proportional contribution; 2) JTIs JUs set up their own common functions, which are specific and shared among them; 3) Each JTI JU organises itself individually. – Sharing functions in the context of the internal audit or for the accounting officer (the latter case being explicitly provided for by the Rules of Application (RAP), Service Level Agreements, common service and supply contracts and exchange of information among JU colleagues. · At the same time, the above simplifications envisaged for the new JTI/JUs to be set up under Horizon 2020 will also allow them to become more effective by: – Increasing stakeholder commitment to the JTI through a definition of in-kind contributions of their private partners, which are their essential contribution to the PPP, rendering their financial involvement more transparent, improved representation of the public and private partners in governing bodies, a balance influence between the Commission and Industry in the appointment of the Executive Director, etc.) – Introducing more flexible budgetary and procurement procedures through adjusted legislative framework building on the new Financial Regulation. Increasing the accessibility and attractiveness of the programmes. The Horizon 2020 JTI/JUs shall apply the common set of rules of the Horizon 2020 Rules for Participation, thus providing a coherent legal framework. Any derogation requested by the JU would have to be duly justified for specific needs and should be cost-effective for the implementation of Horizon 2020.

Table 1:
Schematic comparison of the three options

Option || BAU || c-PPP || i-PPP

Multiannual EU budget commitment || No || Indicative budget (not legally binding) || Yes

Implementing body || Commission / Executive Agency || Commission / Executive Agency || Joint Undertaking Programme Office set up by Commission and industry group.

Governance || Commission || Commission || Joint Undertaking Programme Office set up by Commission and industry group.

Critical mass || Stand-alone projects || Stand-alone projects with increased industry commitment || Projects addressing whole value chains, including capital investment

Multi-annual Strategic Research Agenda || Commission, consulting with stakeholders || Commission, strong advisory role for industry group || Industry group, but subject to joint decision with the Commission.

Work Programme || Commission, (bi-)annual || Commission, (bi-)annual || Joint Undertaking, multi-annual on the basis of the SIRA

Role of Member States || Programme Committee approval required || Programme Committee approval required || State Representatives Group in the JTI structure, in principle advisory role. Additional competencies / responsibilities could be considered.

Financing level / source || € 1 000 million from Horizon 2020, Horizon 2020 general rules apply || · € 1 000 million from Horizon 2020 · Undefined industry contribution Horizon 2020 general rules apply || · € 1 000 million from Horizon 2020 · € 2 800 million from industry (€ 202.5 million in cash; € 2 597.5 million in kind) Derogations to Horizon 2020 general rules possible, allowing for greater contribution by private stakeholders

Applicable when? || Default option || Use following criteria[64]: (a) Added value of the action at Union level (b) Scale of impact on industrial competitiveness, sustainable growth and socio-economic issues (c) Long-term commitment from all partners based on a shared vision and clearly defined objectives (d) Scale of resources involved and ability to leverage additional investments in research and innovation (e) Clear definition of roles for each of the partners and agreed key performance indicators over the period chosen || As for c-PPP plus: (a) R&I cannot be optimally implemented through BAU and Horizon 2020 Rules for Participation and Dissemination may need to be adapted to reach the objectives. (b) Objectives are particularly long term and/or complex and/or expensive. (c) Market failures (resource constraints, risks and 'spill-overs') large, justifying large-scale EU level public intervention. (d) Long term commitment based on (i) industry driven research and innovation agenda with corresponding public and private financial contributions, and on (ii) specific implementation modalities, is required. (e) Private partners are prepared to co-share responsibilities (including costs) and decision-making with public partners within a dedicated legal entity with a specific governance structure.

5.           Assessment
of impacts

The assessment of the impacts of the three
policy options was carried out on the basis of a number of input and output
parameters. The criteria used for the current Impact Assessment were defined in
line with the criteria for PPPs established in the Horizon 2020 proposal, see
Table 2.

Table 2: List of criteria for the
assessment of impact based on input or output

Input parameters || Output parameters

Critical mass of resources and leverage effect on R&I || Environmental impacts

Critical mass of participants and overcoming fragmentation || Economic impacts

Innovation impacts || Social impacts

Efficiency of the governance structure || Addressing the technological and innovation challenges

Coherence with Member State programmes ||

Input parameters influence the framework
conditions under which the R&I activities dedicated to bio-based industries
will take place in the three options. The effectiveness and efficiency of these
R&I activities will then influence the impact on a set of output
parameters, for example in environmental, economic and social terms.

5.1.        Input
parameters

5.1.1.     Critical mass of resources
and leverage effect on R&I

As described in Section 2, the participation of industry
in R&I activities needs to be strengthened under Horizon 2020 in order to
ensure higher impact. At a time where public budgets are under strain, it is
also more relevant than ever to leverage additional R&I investments from
the private sector in the EU. It is therefore important to assess the three
options on their ability to motivate industrial partners to participate in
R&I activities at EU level and to mobilise additional R&I resources
(input additionality).

For BAU and c-PPP general Horizon 2020
rules apply. The participants' financial contributions to R&I projects will
be modest compared to the EU contribution. The total project contribution under
the programme will therefore only marginally exceed the € 1 000 million EU
funding (e.g. as a result of less than 100% funding for demonstration
activities).

Under i-PPP specific derogations from the
general Horizon 2020 funding rules are possible. The industry group will
contribute substantially to the financing of research, demonstration and
deployment activities. A matching contribution of € 1 000 million consisting of
in-kind and in-cash contributions from industry will effectively double the
available resources for the R&I activities under the i-PPP. This will be
supplemented by an additional € 1 800 million from the industry group for infrastructure-based
activities. These will be invested in demonstration and flagship biorefinery
plants, as needed to support the up-scaling of biorefineries. See Box 5 for
more detailed information on the budget.

The commitment of € 2 800 million by
industry under i-PPP is motivated by the stable long-term budgetary framework
and the enhanced degree of industry impact on the R&I agenda offered by the
option. Whereas c-PPP also allows for a greater industry involvement than BAU, its
programming lacks the long-term stability required to mobilise the same level
of additional private sector resources as i-PPP.

Box 5:
Strategic Research and Innovation Agenda (SIRA) and proposed budget for Bio-based
PPP

The SIRA
provided by the industry group backing the Bio-based PPP proposal outlines the
R&I priorities identified to meaningfully address the challenges listed
under Section 2.5, also see Annex 3. They are complemented by a set of
ambitious objectives presented under Section 3. Fully implementing the SIRA and
meeting these objectives will be vital for maintaining the competitiveness of
European bio-based industries and giving them a strong stand against global
competition.

The SIRA
estimates that a minimum budget of € 3 800 million will be required. Two types
of activities are distinguished: project-based and infrastructure-based
activities:

·
Project-based activities have been allocated a
budget of € 2 000 million, which will be allocated through calls for proposals,
and include three major types of projects:
Value Chain Demonstration Projects, which aim to integrate and deploy technologies
and R&I results into five different value chains, bringing technology close
to commercial scale through up-scaling in demonstration activities and flagship
biorefinery plants. – 65 % of the activities budget (main emphasis of the SIRA)
R&D Projects, which focus on filling the gaps in technological
innovation for the three main parts of the value chains, i.e. biomass supply,
biorefineries and products/markets. Dedicated projects will develop the
specific technologies and concepts needed to realise the value chains and
provide the principles in pilot installations. – 30% of activities budget
Supporting Projects, which address the cross-sectoral challenges and
support the value chains in becoming a reality. – 3.2 % of activities budget

·
Infrastructure-based activities have been
allocated a budget of € 1 800 million for the construction of demonstration and
flagship biorefinery plants. This is not eligible for public funding under
Horizon 2020 but is part of the overall commitment taken by industry.

The BIC
is willing to commit at least € 2 800 million of investment (€ 202.5 million in
cash; € 2 597.5 million in kind) based on a European Union commitment of an
additional € 1 000 million. A more detailed explanation of the budget is
included in Annex 3.

In summary, the legally binding financial
commitment of a wide range of industry partners under i-PPP make the
participation of industry and the leverage of additional resources for R&I
activities more certain than under the other options. This is further
complemented by a significant additional investment in infrastructure-based
activities While the stronger involvement of industry in the programming of
c-PPP is likely to have a positive effect on their participation, the
mobilisation of significant additional R&I resources is likely to be
marginal. Although the stronger focus on innovation aspects is likely to
attract interest from the private sector, the industrial participation and
leverage of private investment under BAU is considered to remain within the
range of previous programmes.

BAU = || c-PPP + || i-PPP ++[65]

5.1.2.     Critical mass of
participants and overcoming fragmentation

As described in Section 2, the dispersion
of stakeholders across various sectors, disciplines and Member States is one of
the main hurdles to the development of successful bio-based industries. In view
of the complex technological and innovation challenges bio-based industries are
facing, the ability of the three options to motivate these stakeholders to work
together in an integrated way along value chains to resolve them in a
cost-effective and efficient manner should be assessed.

BAU could build on the experience of FP7
(e.g. Joint Biorefinery Call) by increasing the emphasis on large projects that
aim to bring together participants along the value chain. While this is likely
to attract relevant participants from academia and RTOs and further mobilise
SMEs, it does not offer a realistic possibility to involve large industry to
the extent required. However, the latter are key to successfully implement
costly demonstration and flagship biorefinery plant activities and bridging the
"valley of death" between research and deployment.

c-PPP is expected to be similar to BAU,
although the involvement of an industry group in programming is likely to further
encourage and facilitate collaboration between stakeholders along the value. Indeed,
the positive impact on industry participation in R&I activities is likely
to be limited by the fundamental mechanisms for managing the calls, which is
the same as under BAU and will not achieve the necessary leverage of private
investments.

The stable long-term perspective and the
strong financial leverage of i-PPP create incentives for bringing together and
promoting collaboration between market players along value and supply chains. This
will contribute to overcoming fragmentation and reducing duplication of private
sector R&I, by diminishing the significant transaction costs and addressing
the lack of necessary “social capital” that often prevent companies to engage
in the desired level of collaboration. In this context, i-PPP will also bring
together many players who have no tradition of working together and will aim to
create connections between value chains of seemingly entirely separate sectors
that have a potential for synergies, for example through the conversion of each
other’s side streams or wastes into new products (e.g. food and chemical
industry).

The multidisciplinary setting and the
common development of the SIRA by industry and the research community will also
ensure intense collaboration between stakeholders in the innovation chains. Based
on the experience of JTIs under FP7, i-PPP is likely to achieve high industry
participation rates due to the requirement for a matching contribution from
industry and a high level commitment to the projects based on industry's
involvement in programming. This particularly applies to large industry, while
the picture for SMEs may be a bit more mixed. The benefits from integrating
emerging value chains, which will provide them with up- and down-stream
partners, as well as with better support for demonstration activities (e.g.
access to infrastructure), should however represent strong incentives for SMEs
to participate in i-PPP. This is supported by the interim evaluation of existing
JTIs[66],
which signals mainly positive elements for SMEs, and the current membership of
the industry group that aims to have an important and well-balanced
participation of SMEs. While the participation of academia and RTOs may be a
bit lower in demonstration activities, it should be comparable to the BAU in
research activities. Specific targets and Key Performance Indicators (KPIs)
related to involvement of research institutes, universities and SMEs will be
defined.

In summary, the stable long-term framework
provided under i-PPP allows for more integrated strategic programming than
c-PPP and BAU. It thus is expected to achieve a better balance between the private
and public partners required to address the technological and innovation
challenges in a value chain approach. While academia and RTOs may be a bit less
involved in demonstration than in research activities under i-PPP, this
imbalance is not likely to be as significant as the one caused by limited
industry participation under the two other options and by lack of integration
of the projects in the wider economic context. Moreover, c-PPP is likely to
fare better than BAU due to the stronger involvement of industry.

BAU = || c-PPP + || i-PPP ++

5.1.3.     Innovation impacts

Horizon 2020 will provide more support for
innovation and for activities closer to market compared to previous FPs with
the aim of providing seamless and coherent funding from idea to market. W

While BAU will support pilot scale and
demonstration activities, it will not be able to attract the necessary large
industries to finance the construction of demonstration and flagship
biorefinery plants, which are essential for the deployment of bio-based industries.

Greater industry involvement under c-PPP
will enhance the chances for technology deployment, as industry will tend to
participate in projects for which they see good deployment opportunities. However,
like BAU, c-PPP does not provide any mechanism to mobilise the necessary
industry resources for developing demonstration and flagship biorefinery
plants.

i-PPP takes industry commitment to another
level. The strong financial commitment from industry – possible only in a
setting with long term stability – guarantees that the necessary resources will
be available for work on demonstration and flagship biorefinery plants. This
commitment also shows industry's confidence that the technologies developed in
the JTI setting will truly provide a competitive edge and that there will be
significant opportunities for subsequent commercial deployment.

The fact that research, demonstration and
flagship activities are operated under a common roof, with industry
participants involved along the entire chain of events and with substantial
commitment of private financial resources, will help ensuring a smooth transition
between different phases in technology development. This will result in a
reduction of the time required to move from one TRL to another, or more simply
put, in a reduction of "time to market".

Beyond TRL 8, funding is no longer within
the mandate of Horizon 2020. Nevertheless public funding still has a role to
play in stimulating commercial deployment of technologies with major
sustainability benefits. In contrast to both other options, option i-PPP leads
to the creation of a legal entity, the JU, with an identity of its own. Due to
its broad-based support from the public and private sector and its long-term
character, it has an opportunity to build strong visibility and credibility. It
can therefore act as an interlocutor with other institutions (e.g. EIB,
national or regional authorities, private investors) and help leverage
additional private and public funds for setting up flagship biorefinery plants
and for the commercial deployment of technologies developed and demonstrated
with Horizon 2020 support.

In summary, the integrated long-term
strategic programme under i-PPP leverages significant resources for
demonstration activities and infrastructure, and the building of flagship
biorefinery plants, which will allow activities under i-PPP to reach higher
TRLs than under c-PPP and BAU and to facilitate the financing of the commercial
deployment by other public and private sources. c-PPP is expected to fare bit
better than BAU due to stronger industry involvement, which is likely to push
for higher TRLs within the available resources.

BAU = || c-PPP + || i-PPP ++

5.1.4.     Efficiency of the
governance structure

In times of austerity it is more important
than ever to assess the three options on the basis of the cost-effectiveness
and efficiency with which they implement their activities.

The governance structure of Horizon 2020,
as applicable under BAU, is in the process of being established, it can however
be assumed that it will follow the standard means of implementation of an FP,
which is done "in house" by the Commission and possibly Executive
Agencies.

c-PPP will be implemented in the same way
as BAU with the addition of an industry consultation process. Since the cost
for this will be borne by the Commission, the costs under c-PPP will be
marginally higher than under BAU.

The efficiency of i-PPP has to be assessed
against BAU and c-PPP, on the basis of experiences with JTIs under FP7. These
show that JTIs constitute a highly effective means of implementing the FP.

The use of a small-sized JU to implement the
JTI, as proposed under i-PPP, is already at least cost neutral and probably
even more cost-effective for the Commission, than implementing the FP in terms
of administrative, supervision, setting-up and winding down costs. This is
mainly owed to the fact that 50% of the administrative costs of the JU's
operation are covered by the private partners. It can also be expected that the
costs of and time for setting up a new JU for bio-based industries will be
significantly lower than for the ones set up under FP7; the experience gained
from the latter favours a short setting-up phase, which tends to reduce costs.

Benefits of a JU, compared to the standards
means of implementing an FP, can be non-monetary, such as shared decision-making
with private partners, or monetary by leveraging significant additional
financial resources from the private sector (e.g. € 2 800 million from the
private sector matching € 1 000 million public funding from Horizon 2020). Some
of the costs and benefits of the public intervention to set up the JU will only
become apparent over long periods of time. Thus, the more efficient use of
public resources in a JU allows the Commission to transfer operational tasks to
the JU while retaining activities focused on regulation and supervision.

In summary, i-PPP is expected to fare
better than BAU and c-PPP in terms of the cost-effectiveness of the governance
structure, as administrative costs are shared between the public and private
partners. It will also give rise to additional monetary and non-monetary benefits.

BAU = || c-PPP = || i-PPP +

5.1.5.     Coherence with Member State
and regional programmes

EU funding of R&I only represents about
5% of the total funding for these type of activities in the EU. The remaining
95% are mostly managed at Member States and regional level. It is therefore
important to avoid duplication between the different funding scheme as far as
possible.

In the case of BAU and c-PPP, the Programme
Committee serves as a relay to exchange information between EU, Member State
and regional programmes.

Under i-PPP, Member States will contribute
through a Member States Representatives Group (MSRG), which serves as a relay
for information exchange and aligning national and European programmes. i-PPP
is expected to achieve more coherence and synergies between the EU and Member
States than BAU and c-PPP, because:

·
Companies as well as national and regional
clusters, i.e. "users of national programmes" are shaping the mandate
of the JTI. They can be expected to actively push for a maximum level of
synergy when shaping the JTI programme and providing "user" feedback
to their national and regional authorities;

·
The long-term character of the SIRA and the
strong industry commitment will send clear signals to Member States and regional
authorities about long-term goals of EU R&I policy, encouraging a better
alignment of national or regional programmes.

In addition, the MSRG will contribute to
identifying, at an early stage, opportunities for deployment and local
investment of the i-PPP results with a view to matching these with the interest
of various public institutions and private investors. Mobilisation of funds
from the EIB, Structural Funds and private investors, including venture capital,
can thus be facilitated.

This approach will be particularly advantageous
from the perspective of EU Cohesion Policy. Several Member States have
difficulties in identifying a sufficient number of economically viable projects
for meaningfully investing the resources available to them for rural
development or "Smart Specialisation". The development of a network
of biorefineries provides an excellent opportunity to leverage Structural Funds,
creating new sources of employment and sustainable economic growth. The JTI as
an institutional actor will thus play an active role in matching investment
plans of industry with deployment of Cohesion Policy instruments.

In summary, while Member States have less
direct influence on the programming of i-PPP than under BAU and c-PPP, coherence
and synergies with their activities will be ensured through the MSRG, as well
as through some of the partners involved in local and regional bioeconomy
initiatives. Furthermore, Member States will be actively consulted and involved
in the deployment of the JTI results. i-PPP thus gives them the opportunity to
benefit much more directly from its outputs than c-PPP or BAU.

BAU = || c-PPP = || i-PPP +

5.2.        Output
parameters

5.2.1.     Environmental impacts

Bio-based industries can contribute
significantly towards reaching EU objectives on climate change, renewable
energies, a low-carbon economy and sustainability, see Section 2.2.1. Environmental
benefits of the bio-based industries will mainly depend on the scale and speed
of deployment, see Section 5.1.3. The main boundary conditions are however related
to the sustainable sourcing of biomass, which needs to take into account
biodiversity and ecosystems.

Strong emphasis on environmental aspects
can be put in the work programmes under BAU. However, the difficulty to take
activities to higher TRLs and to effectively involve all stakeholders will
hinder the optimal deployment of bio-based industries. BAU can therefore not be
expected to deliver a strong environmental impact.

Under c-PPP, there will be more interaction
between the industry group and the European Commission than under BAU, creating
an additional channel to convey the importance of environmental boundary
conditions to industry. As under BAU, the Commission and Member States have the
final say on programming, they can thus decide to put strong emphasis on
environmental aspects in the research actions. Since c-PPP will not
significantly improve commercial deployment over BAU, its environmental impact
will however also be limited.

The successful deployment of bio-based
industries under i-PPP could have a very favourable impact on a number of
environmental issues. Industry's strong impact on decision making and focus on
deployment could raise concerns as to the strict application of environmental boundary
conditions under i-PPP. However, the equal number of representatives of
Commission and industry representatives in the Governing Board (GB), the main
decision body of the JTI, should ensure that they are respected. The GB creates
a discussion forum between the public and private partners in which the
Commission can raise awareness on and push for taking on board important policy
objectives, such as biodiversity and ecosystem protection. If necessary, the
Commission can use its voting rights to make sure that the JTI will act in line
with these policy objectives.

i-PPP will ensure a positive environmental
impact of bio-based industries in a number of other ways:

·
Reducing GHG emissions by replacing products and fuels produced from fossil resources by
bio-based products and biofuels. The production of "advanced
bioethanol" is estimated to deliver emission savings of 101 million tonnes
CO2 equivalent, i.e. more than 2% of the total EU emissions in 2010,
see Annex 10 for examples. In the chemical industry, moving from 10% to 30%
bio-based chemicals overall (the industry group's target for 2030) will have an
even larger emission reduction impact[67].
Bio-based industries will play a key role in moving towards a low-carbon
economy by 2050;

·
Improving resource efficiency of industrial processes and value chains. The use of innovative
technologies, such as industrial biotechnology, can make production processes
more environmentally friendly by improving their resource efficiency (e.g. lower
temperature, water and energy consumption, and CO2 and waste
production). Grouping different industrial sectors in a JTI with the aim of
setting up new value chains will help identify and prioritise the smart use of
feedstock from the outset, for example when the by-products or wastes from one
industry become the feedstock of another one. Bio-based industries will have an
important role in making the transition to a circular, resource-efficient and
resilient economy in Europe[68];

·
Reducing waste in
line with the waste hierarchy and the aim to reduce landfilling of
biodegradable waste. Bio-based industries can contribute directly to reducing biodegradable
waste streams by preventing their generation through more resource efficient
industrial processes, see above, and by developing new technologies for re-using
them to produce value added products. For example, 138 million tonnes of food
are wasted in the EU every year. Disposing it costs European taxpayers up to €
90 per tonne and produces 170 million tonnes of CO2 per year.
Converting this waste into value added products would thus save taxpayers
money, generate economic revenue and mitigate climate change. Significant
advances in processing technologies may also allow bio-based industries to make
use of biodegradable wastes that are currently classified as hazardous, such as
discarded construction wood. Another concrete example for the environmental
impact from bio-based industries on waste reduction is provided in Box 6;

·
Ensuring sustainable biomass sourcing taking into account environmental boundary conditions. Key lines of
action for the Commission in the governance of i-PPP will be to insist on the
use of life cycle analysis (LCA) and the consistent application of
sustainability criteria (including biodiversity) with regard to sourcing of
biomass. In this regard, use of biomass fractions from industrial and municipal
waste will be encouraged. Removal rates for the use of residues from agricultural
land and forests will be controlled to avoid harming soil fertility, ecosystem and
biodiversity. This subject will also require further research. The production
of dedicated industrial crops needs to be well considered in terms of total area
and type of land allocated as well as in terms of developing sustainable
agricultural practices. The focus on non-edible biomass produced in the EU should
assist in mitigating the competition between different uses of biomass (e.g.
food versus industrial and energy purposes) and a potential increase in commodity
prices.

Box 6:
Assessment of the environmental impact of the substitution of all single-use
carrier bags with biodegradable bags in Europe[69]

An
average plastic carrier bag weighs 12g. With a European market of about 100
billion bags, a total of 1.2 million tonnes of plastic are used every year to
produce these bags. Assuming that this plastic is substituted by biodegradable
bioplastic made exclusively from maize starch, it can be estimated that 280 000
hectares (ha) will be required to grow this maize. The calculation is based on
the assumption that 1.2 million tonnes of starch (dry matter) have to be
extracted from about 1.82 million tonnes of grain (dry matter) with a starch
content of 66%. European maize productivity is estimated at 6.6 tonnes
grain/ha. 280 000 ha represents about 0.06% of the EU's agricultural land.

The
successful development of advanced biorefinery processes that use residues and
waste as a raw material would reduce the use of agricultural land for this type
of activity to almost nothing.

In summary, i-PPP is likely to have a
higher environmental impact than c-PPP and BAU. While the three options do not
differ strongly in the Commission's ability to impose environmental boundary
conditions if necessary, they do on several other accounts. Activities taking
place under i-PPP will be part of a integrated long-term strategic vision for
the development of bio-based industries that is largely owned by industry. By ensuring
that industry takes environmental boundary conditions into account from the
outset when developing new value chains will encourage the adoption of a
harmonised approach for the sustainable sourcing of biomass, which may become a
standard for future value chains in Europe and possibly even world-wide. While
industry will also be more strongly involved in the programming of c-PPP, the
lack of a strong strategic vision is likely to dilute the impact, although it
is still expected to be better than under BAU. Finally, the much more efficient
deployment of i-PPP results compared to c-PPP and BAU is further going to
enhance any positive environmental impact.

BAU = || c-PPP + || i-PPP ++

5.2.2.     Economic impacts[70]

Bio-based industries can significantly
contribute to increasing the competitiveness of European industries and
generating growth and jobs, as described under Section 2.2.2. However, like the
environmental benefits, these economic benefits depend on the scale and speed
of deployment of bio-based industries in Europe, which in turn depends on the
participation of SMEs and large industries, as described under Section 5.1.3.

BAU will not achieve the necessary
reduction in time to market and deliver the required technology deployment
boost in Europe, due to its inability to attract sufficient industry
participation, in particular from large industries. It will thus not assist critical
industries for the EU, such as the chemical or pulp and paper industries, to
gain competitiveness in the major future-oriented and rapidly growing bio-based
segment of the market, which is projected to grow from currently approximately
10% on average to up to 25% in 2025[71].
BAU will also not deliver a meaningful boost to achieve important EU policy
targets such as the required production level of advanced biofuels to fulfil
the 10 % biofuel target by 2020 in the Renewable Energy Directive.

Under c-PPP, stronger and more structured
input from the industrial group in programming will achieve greater success in
applied research and promote industrial participation in the programme. Since c-PPP
is subject to standard Horizon 2020 rules, it does however not offer industry a
guaranteed long-term stability and is not equipped to generate the financial
leverage with large private sector contributions as required to realise the
required progress towards high TRL levels (especially TRL levels 7 and 8).
Although c-PPP will succeed in achieving better industry participation and thus
provide greater economic benefits than BAU, it will nonetheless not be able to
deliver the necessary substantial improvements to assist bio-based industries
to overcome the technological and innovation challenges they are facing.

i-PPP is best suited to complement the
existing research strengths in Europe with a strong focus on activities with
high TRLs (in particular, for demonstration and flagship biorefinery plants).
The stable long-term framework of the JTI allows for integrated strategic
programming with industry and will thus succeed in mobilising relevant market
players around selected value chains and leveraging the private investment
required to address the technological and innovation challenges bio-based
industries are facing. In particular, it will allow:

·
Biomass producers to connect with a wide range of processing industries, opening new
markets for agricultural and forestry residues, bio-wastes and industrial
crops. It will also support the development of new technological and logistical
solutions for cost-effective and efficient collection, storage and transport of
the feedstocks. In order to take into account environmental policy objectives
relating to sustainability and the protection of biodiversity and ecosystems,
biomass producers will work with other players along the value chain in
developing sustainability criteria for the sourcing of biomass;

·
Processing industries to access reliable and sustainably sourced feedstock by connecting
them to biomass producers across Europe. It will assist them in developing new processes
to separate, pre-treat and convert different feedstocks into intermediates, and
to transform these into bio-based products and biofuels.

The grouping of key market players around five
value chains concentrating on different feedstocks will allow for improved
technology and knowledge transfer and sharing of infrastructure for
demonstration activities, which will contribute to higher cost-effectiveness
and efficiency. This integration into a value chain will particularly benefit
SMEs.

Given the relatively high price of feedstock in
Europe, processing industries will explore integrated biorefinery processes
that allow for the co-production of bio-based products and bioenergy in order
to maximise the valorisation of the resource and reducing production costs,
following the example of petro-chemical refineries. A biorefinery co-producing
cellulosic ethanol and biochemicals could thus reduce the sales prices for
biofuels by 30%, compared to a biorefinery only producing biofuel.

The significant resources allocated for
demonstration activities and infrastructure to support the techno-economic
assessment of new processes and products, as well as for the development of a
number of flagship biorefinery plants. These will assist in decreasing the per
unit costs of production by 2020, and provide a knowledge base for decreasing
the investment costs as of 2020[72].

Finally, processing industries will work
together with biomass producers and end users to develop sustainability
criteria for the sourcing of biomass and the environmental efficiency of
production processes to be used for life cycle assessments, as well as for the
development of standards and labels for bio-based products;

·
End users or
consumer brands to have access to more environmentally-friendly alternatives to
petro-chemical products and fuels, as well as to entirely new products (e.g.
materials) with new characteristics and functionalities, which can be used to
develop and test new consumer products. End users will work together with
biomass producers and processing industries to develop standards and labels for
bio-based products taking into account the sustainability of biomass production
and conversion processes.

By bringing together the relevant market
players using a value chain approach i-PPP will accelerate the development of
sustainable and competitive bio-based industries in Europe, see Annex 2 for a
more detailed description of the market players. In particular demonstration
and flagship biorefinery plants will have a multiplier effect, which will pave
the way to the construction of a greater number of commercial scale
biorefineries in the EU. The number and scale of commercial biorefineries and
the extent to which these rely on EU biomass sources will determine economic
impact: creation of revenue and added value, competitiveness of bio-based
industries, less dependence on fossil resource imports and improved security of
supply. This will boost the EU's biofuel sector and chemical industry[73], see Annex 10 for examples. In
particular, it will help the latter in maintaining a position of global
leadership with a strong EU manufacturing base as the global trend towards a
rapidly increasing share of bio-based chemicals materialises.

In summary, i-PPP is expected to have the
most significant economic impact as it mobilises market players along the
entire value chain, as well as the significant private investment, in order to
address the technological and innovation challenges that are hampering the
development and deployment of bio-based industries in Europe in a
cost-effective and efficient manner. While c-PPP is likely to mobilise industry
better than BAU, it fails to provide the integrated strategic vision needed to
leverage the scale of resources necessary to tackle the technological and
innovation challenges.

BAU = || c-PPP + || i-PPP ++

5.2.3.     Social impacts

Like the environmental and economic impact,
one part of the social impact of bio-based industries as a powerful engine for
job creation and for rural development will depend on their level of deployment,
see Section 5.1.3. The other part is linked to the introduction of bio-based
products and biofuels into mature consumer markets, where they will either
replace existing less sustainable goods or try to establish themselves as
entirely new ones. Their success will depend on pricing and environmental
performance, and most importantly public acceptance.

As discussed under Section 5.2.2, BAU does
not achieve optimal impact on deployment due insufficient industry involvement.
It will hence not deliver the desired impact on job creation and rural
development. While BAU may support the introduction of bio-based products into
consumer markets, e.g. by continuing to develop standards for certain bio-based
products as under FP7 or communicating their benefits to the general public,
the social impact of introducing bio-based products and biofuels is likely to
be limited by the difficulty of research activities reaching high TRLs in view
of developing products that are close to the market.

With a limited enhancement in terms of
deployment over BAU, c-PPP will also provide a limited improvement in job
creation and rural development. The social impact on consumer markets is likely
to be better than under BAU, due to the stronger involvement of industry. The
public perception of bio-based products and biofuels may however be hampered by
the lack of integration between different market players, which may lead to
inconsistencies in the development of sustainability criteria, standards and
communication activities.

The superior performance of i-PPP in terms
of deployment drives its potential to deliver jobs. These jobs relate, on the
one hand, to the construction and operation of biorefineries and on the other
hand, to production, collection and transport of biomass. Both activities
involve plenty of opportunity for low-skilled workers.

Lack of economic activity in many rural
areas currently leads to declining standards of living, a loss of population
and difficulties to maintain the quality and diversity of agro-eco systems.
Contrary to most other industries, the rule that "biorefineries"
follow "biomass production" creates a strong driver for the bio-based
industries to develop first and foremost in rural areas. The most important
cost for the operation of most biorefineries is the feedstock, hence their
potential to contribute significant new income streams to farmers and foresters
and additional jobs in the biomass logistics and supply chain. An example on
the social impact of bio-based chemical products is provided in Annex 10.

i-PPP is also likely to fare better with
regard to the introduction of bio-based products and biofuels into consumer
markets. The integrated strategic vision of the JTI will ensure that only the
most sustainable and cost-effective bio-based products and biofuels in the
different value chains are up-scaled in order to ensure their competitiveness
on consumer markets. The application of a harmonised approach on sustainability
criteria, LCAs, standards and labels will provide consumers with more
transparency as to the benefits of these goods.

The establishment of a JU furthermore
provides bio-based industries with a clear identity and one voice to reach out
to the general public and explain to them how the feedstock for these advanced
bio-based products and biofuels was sourced, why these products are more sustainable
(e.g. replace fossil based products and possibly toxic chemicals by bio-based
alternatives, more resource efficient production processes), what novel
characteristics they offer (e.g. biodegradability).

In summary, the social impact of i-PPP is considered
to be higher than that of c-PPP and BAU. This is largely due to the value chain
approach, which brings on board a wide range of regional market players, but
also allows for the development of more sustainable and cost-effective
bio-based products and biofuels. The creation of a JU under i-PPP also gives a
face to the nascent sector of bio-based industries, which is otherwise hard to
grasp due to the very diverse market players it encompasses, which will allow
for better outreach to the general public. c-PPP is likely to have a slightly
better impact than BAU due to its stronger involvement of industry, which will
improve deployment and develop a larger number of bio-based products and
biofuels to high TRLs.

BAU = || c-PPP + || i-PPP ++

5.2.4.     Addressing the
technological and innovation challenges

A number of specific objectives (and their
operational objectives) have been identified under Section 3 to address the
technological and innovation challenges identified in Section 2.5. Some
objectives will only contribute to one challenge, others to more than one or
all. Based on the discussion of the different input and output parameters
above, the three options have been assessed with regard to their ability to
deliver the specific objectives in Table 3.

While BAU is likely to improve in the
development of bio-based materials compared to FP7, its ability to increase
industry participation, in particular from large industry, and leverage private
investments in R&I will be limited. It can also be expected that it will
not succeed in mobilising additional resources for the development of flagship
biorefinery plants.

c-PPP is expected to fare better than BAU
on all activities in which a stronger industry involvement will be determining
for success. While the consultation of industry in the programming is likely to
also enhance their participation in R&I activities, the lack of additional
leverage and of a strategic long-term perspective will dilute the impact of
c-PPP. Like BAU, it will not succeed in mobilising additional resources for the
development of flagship biorefinery plants.

Under i-PPP, industry's strong involvement
in the development of the SIRA and its important financial commitment, both in
terms of supporting R&I activities and the development of infrastructure,
offer optimal conditions for delivering all the specific objectives. The
ability of i-PPP in mobilising such significant resources relies on the stable
long-term strategic framework it provides, which allows for a value chain
approach that brings together all necessary stakeholders in a cost-effective
and efficient manner.

In summary, the technological and
innovation challenges bio-based industries are facing will be best addressed
under i-PPP, as the framework it provides best succeeds in mitigating the
significant number of market failures this nascent sector is struggling with.
While the impact of c-PPP is better than that of BAU due to the better
involvement of industry, it will not be able to create the coherent and
integrated framework required to motivate industry partners to invest
significant additional resources in the programme. BAU will essentially follow
in the footsteps of previous FPs and support bio-based industries in a more
punctual fashion through its wide range of projects.

BAU = || c-PPP + || i-PPP ++

Table 3: Linking technology and
innovation challenges, specific objectives and the three options

Problems (See Section 2.5 Technology and innovation challenges) || Objectives (See Section 3.1.2 Specific objectives) || Options (See Section 4 Policy options)

BAU || c-PPP || i-PPP

Accessing sufficient sustainable feedstock || Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Developing efficient conversion processes for advanced biorefineries || Develop new bio-based materials || + || + || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Demonstrating and deploying advanced biorefineries || Demonstrate consumer products from bio-based chemicals and materials || = || + || ++

Validate at demo scale new chemical building blocks from European biomass || = || = || ++

Set up flagship biorefinery plants producing cost-competitive bio-based materials, chemicals and fuels from the PPP || − || − || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Supporting demand-side actions for the uptake of bio-based products || Demonstrate consumer products from bio-based chemicals and materials || = || + || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

++ Very good potential for progress || + Good potential for progress || = Neutral progress/status quo || − Negative progress

6.           Comparing
the options and selecting the preferred option

6.1.        Comparison
of the three options

The impact of the three options has been
assessed and compared based on a number of input and output parameters under
Section 5. The outcome of this assessment has been summarised in Table 4.

Table 4: Comparison of the three options

Criteria || BAU || c-PPP || i-PPP

Input parameters || Critical mass of resources and leverage effect on R&I || = || + || ++

Critical mass of participants and addressing fragmentation || = || + || ++

Efficiency of the governance structure || = || = || +

Coherence with member state and regional programmes || = || = || +

Innovation impacts || = || + || ++

Output parameters || Environmental impact || = || + || ++

Economic impact || = || + || ++

Social impact || = || + || ++

Addressing the technological and innovation challenges || = || + || ++

Note: Option BAU
represents the baseline scenario.

6.2.        Justification
of ratings based upon the assessment of impacts

i-PPP's strong position is based on its
capacity to mobilise greater project resources due to the significant
contribution by industry. It would provide a stable framework with long-term
guarantees that is essential to mitigate risk and incite industry commitments,
not only in terms of R&I resources but also for investments in expensive
demonstration activities and infrastructure. The conditions offered by i-PPP
have motivated industry to match the EU contribution of € 1 000 million for
R&I activities and to leverage an additional indicative € 1 800 million for
demonstration and flagship biorefinery plants.

i-PPP incites much higher industry
participation rates than BAU or c-PPP. Its structure would help overcome
fragmentation by facilitating cross-sectorial and pan-European linkages along
whole value chains, which will particularly benefit SMEs. Such linkages are
required to successfully implement new technologies and resolve innovation
problems. The scope for taking technologies to high technology readiness levels
is clearly greater under i-PPP than under the other two options due to strong
industry commitment. i-PPP thus contributes much more effectively to bridging
the innovation gap than BAU or c-PPP.

i-PPP also offers a moderate advantage in
terms of efficiency of the governance structure. It will also have a positive
influence on coherence with Member State and regional programmes by involving
them in its Advisory Committee and consulting them on deployment.

Altogether, the advantages of i-PPP on the
above-mentioned criteria give it a strong advantage in terms of addressing the
technological and innovation challenges bio-based industries face and will
result in a larger expected scale of technology deployment and shorter time to
market. Since the positive environmental, economic and social impacts of
bio-based industries strongly depend on their deployment, i-PPP will most
significantly contribute to achieving the Europe 2020 objectives of smart,
sustainable and inclusive growth. Impacts include the development of new
cost-effective and efficient value chains that transform sustainably sourced
biomass into value added bio-based products and biofuels through resource
efficient and environmental processes, generating benefits for all involved
market players and consumers.

6.3.        Preferred
option

Based on the assessment above, option i-PPP
offers a strong benefit over option c-PPP both on input and output parameters,
which in turn have a certain advantage over option BAU. The establishment of a
JTI on Bio-based Industries is thus the preferred option.

7.           Evaluation
and Monitoring

7.1.        Operational
monitoring

Progress and efficiency of the JTI
operations will be closely monitored at different levels. The JTI will publish
an annual activity report with the results of a monitoring based on a range of
Key Performance Indicators (KPIs).

7.1.1.     KPIs on implementing the
SIRA

The JTI's progress on implementing the
objectives outlined under Section 3 and the SIRA at different points in time
using three levels of quantitative and qualitative Key Performance Indicators:

·
KPIs “Level 1” address the contribution to
accomplishment of the general objectives of the JTI with a vision to 2020 and
2030 (outcome and impact). These objectives will however not be direct results
of the PPP;

·
KPIs “Level 2” aim at monitoring the progress of
JTI, measuring how the specific operational objectives/results are met by 2020
(output and outcome), with milestones end of 2016 and 2018;

·
KPIs “Level 3” allow monitoring the success of
each project to be funded under the JTI. KPI level 3 will be defined by each
project as ad-hoc KPIs attuned to KPI level 2.

Efficiency of the JTI

For the sake of monitoring progress and implementation
of the JTI, the direct quantitative objectives could be used as KPIs Level 2 to
monitor the progress of the programme. A limited selection from these
objectives is made as key specific objectives. These objectives are directly
linked to a set of KPIs, to be measured and monitored during the progress of
the JTI, and to be used to steer the JTI activities accordingly.

The monitoring at this level will be a task
of the programme management. Frequent monitoring gives insight into the
efficiency of the programme. During the execution of the programme these KPIs
will be evaluated on their effectiveness, in order to be able to change and
complete the monitoring of the programme when needed.

These KPI's will be complemented with
operational objectives on the JTI performance to be monitored continuously:

·
Overall percentage % of industry investments
(cash + in-kind) in the total JTI organisation and projects;

·
A well balanced SME involvement in JTI
organisation and projects, in line with Horizon 2020;

·
Involvement of RTOs / Academia (i.e. targeted
amount of finances flowing to RTOs / Academia);

·
Balance between R&D, demonstration and
supporting projects;

·
Addressing the societal challenges (i.e.
including some cross-cutting issues in demonstration projects);

·
Follow-up on R&D results: % of JTI R&D
results brought into demonstration projects;

·
How well do the projects realised address the
variety of topics in the SIRA in a balanced way (e.g. variety in feedstock, in
products, in processes, etc.);

·
A geographically balanced distribution of
projects across member states (in all projects, and especially large demonstrators).

Effectiveness of the JTI

To get insight into the effectiveness of
the programme, i.e. answering the question "are we doing the right things?",
a monitoring for the KPIs at Level 1 has to be set-up. This is a task of the
programme management that might be addressed by a Supporting Project within the
JTI, that will run throughout the execution of the programme.

KPI level 3 will be defined by each project.
This can be done by setting monitoring criteria in the call for proposal and/or
by demanding the determination of KPIs in the Description of Work of the
projects. The KPIs Level 3 have to be attuned to KPI level 2 and 1. Ensuring
the KPIs Level 3 are well attuned is the responsibility of the programme
management of the JTI. The project manager is responsible for monitoring the
progress of the project and has to deliver data for KPIs Level 1 and 2 when
needed.

In addition to the monitoring of the implementation
of the objective, monitoring will be carried out on good governance of the PPP
with regard to:

·
Openness and transparency of procedures;

·
Avoidance of conflicts of interest;

·
Financial auditing.

7.1.2.     KPIs relating to Horizon
2020

As the JTI would be co-funded by Horizon
2020, its achievements will also be measured against the KPIs of the relevant
parts of Horizon 2020, such as a) supply security of bio-based products, b) the
development of competitive and low carbon supply systems, and the c) establishment
of a resource-efficient and environmentally-friendly transport system.

The JTI performance will be quantitatively
assessed against the following Horizon 2020 KPIs:

·
Achievement of an overall investment of 3% of
GDP in R&D activities in the EU;

·
Achievement of, on average, 20 publications in
high impact journals (and two patent applications per € 10 million funding[74]).

Throughout the lifetime of the JTI, the
efficiency, effectiveness and throughput of operations will be monitored as
follows:

·
Efficiency, in terms of relationship
input/output;

·
Effectiveness, in terms of relationship
input/outcome and impact;

·
Throughput, in terms of relationship between
output, outcome and impact.

7.2.        Monitoring
progress of technology and markets

An additional set of quantitative and
qualitative KPIs will be established to follow the progress of the JTI
technologies as well as its impact on market development with a view to assess
progress of the bio-based industries in the EU towards the general objectives.

Such KPIs aim to measure the level and
speed of technology deployment in the EU, the EU's competitiveness in the
bio-based industries and market adoption of bio-based products and biofuels.
These indicators will be assessed against a baseline reflecting the state of
affairs at the start of the JTI. Where possible, the impact of the JTI on these
parameters will be assessed.

A number of suitable KPIs have already been
proposed by industry in the SIRA, see Annex 3. A selection of the most
appropriate KPIs as well as specific methods for measuring them will be further
elaborated in the Multi-Annual Implementation Plan. Where appropriate, the
agreement between the JTI and the industry group will include a requirement to
provide specific data that are essential for measuring the KPIs. Certain tasks
related to monitoring of KPIs may also be included in projects under the segment
for "cross-cutting" actions.

The definition of KPIs for the JTI will
take advantage of the important work already undertaken within the European
Industrial Bioenergy Initiative (EIBI) and the SET plan information system with
regard to the definition of KPIs.[75]

Finally, it will be examined how the
Bioeconomy Observatory which is being established in the framework of the
Commission's Bioeconomy strategy, can be involved in monitoring the KPIs.

7.3.        Performance
evaluations of the JU to be conducted from outside the JTI

The Commission will organise evaluations of
the JTI by calling on independent experts. These evaluations will cover the
quality and efficiency of the JTI and its progress towards its objectives. A
mid-term and an end-of-term evaluation (as customary with JTIs) will take
place. The latter is based on the observation that the innovation impact of
projects often only becomes visible several years after project completion and
there is a lack of monitoring of these post-project innovation impacts.[76] This will allow to monitor
progress towards 2030 targets as defined in the industry vision document and as
discussed in this impact assessment.

7.4.        Monitoring
the financial commitment by industry

The Commission will monitor on an annual
basis the nature and the level of the industry contribution, in order to ensure
that the R&I budget receives the necessary support both from the public and
private partners. Corrective measures will be applied to ensure that the contributions
from the partners are sufficient and appropriately balanced.

Annexes

              Annex 1 – Glossary

              Annex 2 – Bio-based industries – Market players and the
"BIC"

              Annex 3 – Strategic Innovation and Research Agenda (SIRA)

              Annex 4 – Report on the European Commission's on-line
public consultation

              Annex 5 - Current and future potential of biomass as a
source of materials and energy

              Annex 6 – Definition of Technology Readiness Levels (TRLs)

              Annex 7– Overview of research and innovation at regional
and national level

              Annex 8 – Example of a regional bioeconomy cluster moving
up-scaling activities outside the EU

              Annex 9 – Detailed description of the specific objectives
and link to wider policy context

              Annex 10 – Examples illustrating the potential
socio-economic impact of a option i-PPP

              Annex 11 – Bibliography of the Impact Assessment

[1]               Note: A glossary providing a definition of bioeconomy
and other technical terms is provided under Annex 1

[2]               COM(2012)
60

[3]               COM(2012) 582

[4]               COM(2012) 79

[5]               COM(2011) 627

[6]               DG REGIO (2012) Connecting Smart and Sustainable
Growth through Smart Specialisation: A practical guide for ERDF managing
authorities

[7]               COM(2012) 710

[8]               CDR1112-2012

[9]               COM(2011)
572

[10]             COM(2011)
809

[11]             Biobased
for Growth – A public-private partnership on biobased industries http://www.biobasedeconomy.nl/wp-content/uploads/2012/07/Bio-Based-Industries-PPP-Vision-doc.pdf

[12]             DG
RTD (2012) Roadmap for a Joint Technology Initiative in the field of Bio-based
industries
http://ec.europa.eu/governance/impact/planned\_ia/docs/2013\_rtd\_007\_biobased\_industries\_en.pdf

[13]             Public
Consultation on "Bio-based industries, towards a public-private
partnership under Horizon 2020?"
http://ec.europa.eu/research/consultations/bio\_based\_h2020/consultation\_en.htm

[14]             Public
consultation “Bio-based economy for Europe: state of play and future potential”
from 22 February to 2 May 2011 http://ec.europa.eu/research/consultations/bioeconomy/consultation\_en.htm

[15]             SWD(2012)
11

[16]             Conference
“Partnering for the Bioeconomy in European Regions” co-organised by DG RTD and
the Committee of the Regions (CoR) on 12 October 2012 at the CoR, Brussels
Belgium

[17]             Note: A glossary providing a definition of bio-based
industries and other technical terms is provided under Annex 1

[18]             DG
ENER (2011) Key Figures – Market Observatory for Energy –June 2011

[19]             COM(2011) 112

[20]             McKinsey
(2009) White Biotech

[21]             OECD (2009) The bioeconomy to 2030: Designing a Policy
Agenda

[22]             WWF
(2009) Biotechnology could cut C02 sharply, help build green economy
http://wwf.panda.org/?174201/Biotechnology-could-cut-C02-sharply-help-build-green-economy

[23]             Eurostat
(2011) Climate change statistics
http://epp.eurostat.ec.europa.eu/statistics\_explained/index.php/Climate\_change\_statistics

[24]             Inman, M. (2013) The true cost of fossil fuels,
Scientific American, April 2013

[25]             COM(2011) 244

[26]             WWF (2009) Industrial Biotechnology: More than green
fuel in a dirty economy

[27]             OECD (2011) Industrial Biotechnology and Climate
Change: Opportunities and Challenges

[28]             COM(2012) 595

[29]             Directive 2009/28/EC

[30]             Directive 2009/30/EC

[31]             OECD
(2009) The bioeconomy to 2030: Designing a Policy Agenda

[32]             Festel,
G. (2011) Presentation at the 4th Annual European Forum for Industrial
Biotechnology & The Biobased Economy, Amsterdam, 20 October 2011

[33]             WEF (2010) The future of Industrial Biorefineries

[34]             OECD (2009) The bioeconomy to 2030: Designing a Policy
Agenda

[35]             Star-COLIBRI (2011) Joint European Biorefinery Vision
for 2030

[36]             COM(2012)
582

[37]             Bloomberg New Energy Finance (2010) Next-generation
ethanol and biochemicals: What's in it for Europe

[38]             Bloomberg New Energy Finance (2010) Next-generation
ethanol and biochemicals: What's in it for Europe

[39]             Wit and Faaij (2010) Biomass and Bioenergy

[40]             Bloomberg New Energy Finance (2010) Next-generation
ethanol and biochemicals: What's in it for Europe

[41]             DG REGIO (2012) Smart Specialisation Guide on smart and
sustainable growth

[42]             Contributed by M. Carus, member of the independent
expert group of this Impact Assessment

[43]             Mantau, U. (2012) Wood Flows in Europe

[44]             Futuris (2012) Supporting the set-up of industrial
demonstrators in Europe - Position paper

[45]             Burill & Company (2012) Biotech 2012: Innovating in
the New Austerity; Burill & Company's 26th Annual Report on the Life Science
Industry

[46]             USDA BioPreferred Program www.biopreferred.gov

[47]             Burill & Company (2012) Biotech 2012: Innovating in
the New Austerity; Burill & Company's 26th Annual Report on the Life
Science Industry

[48]             Note: The term ligno-cellulosic refers to the fact that
this type of biomass contains cellulose and lignin as the main types of
biomolecules. Cellulose – like starch - is made up of a chain of sugar
molecules, but is more difficult to break down in its basic constituents – in
part because it is embedded in a matrix of lignin which is difficult to remove.

[49]             DG ENTR (2009) Taking Bio-based from Promise to the
Market – A report from the Ad-hoc Advisory Group for Bio-based Products in the
framework of the European Commission’s Lead Market Initiative

[50]             WEF
(2010) The Future of Industrial Biorefineries

[51]             Dalberg (2011) Biorefinery
Feasibility Study

[52]             OECD (2009) The Bioeconomy to 2030: Designing a Policy
Agenda

[53]             CEFIC (2012) The European chemical industry in
worldwide perspective Facts and Figures 2012

[54]             DG RTD Expert Group (2010) Interim Evaluation of the
Seventh Framework Programme

[55]             COM(2011) 572

[56]             DG RTD Expert Group (2010) Interim Evaluation of the
Seventh Framework Programme

[57]             Pending of approval of Article 55 of the General Regulation
of Structural Funds

[58]             Financing instruments: Horizon 2020 – grants,
Structural Funds – Smart Specialisation Strategies, rural development, European
Investment Bank (EIB) – loans, Risk Sharing Finance Facility (RSFF)

[59]             DG COMP Seminar on State Aids January 2013

[60]             COM(2012) 595

[61]             SEC(2011) 1427

[62]             http://eca.europa.eu/portal/pls/portal/docs/1/22482779.PDF

[63]             http://intranet-rtd.rtd.cec.eu.int/int\_com/docs/CBA\_JU.pdf

[64]             COM(2011) 808

[65]             ++ Very good potential for progress; + Good potential
for progress; = Neutral progress/status quo;− Negative progress

[66]             DG RTD Expert Group (2011) First interim evaluation of
the Fuel Cell and Hydrogen JU, Expert Group Report 24862

[67]             Hermann, Blok and Patel (2007) Producing Bio-based bulk
chemicals. Using industrial biotechnology saves energy and combats climate
change. Environ. Sci. Technol. 41, 7915-7921.

[68]             MEMO/12/989

[69]             ECOPEC/Novamont (2013) Biobased and Biodegradable
Carrier Bags. Is competition between bioplastics and food a real issue?
Abstract published in Bioplastics: A case study of bioeconomy in Italy

[70]             Note: Due to the fragmented and nascent nature of the
bio-based industries sector only limited economic data is publicly available on
bio-based products and biofuels. The Copenhagen Economics paper on
"Biobased industries - The case for investment" (2013) explicitly
highlight the difficulty in obtaining current data on the sector, in particular
on costs, as these are often confidential and there is no experience from large
scale projects.

[71]             OECD – The Bioeconomy to 2030 – Designing a Policy
Agenda.

[72]             Dalberg (2011) Biorefinery
Feasibility Study

[73]             BNEF (2010) Next generation ethanol and biochemicals,
what's in it for Europe

[74]             Note: Since the JTI will put emphasis on pilot,
demonstration and flagship activities, for which the valorisation of
intellectual property is more important than its creation, the target of two
patent applications per € 10 million invested may not be realistic.

[75]             European
Industrial Bioenergy Initiative (EIBI) (2011) Boosting the contribution of
Bioenergy to the EU climate and energy ambitions Implementation Plan 2010 -
2012

[76]             Biotechnologies
panel report, Food Agriculture and Biotechnology 25/02/2011 prepared in the
context of the impact assessment of Framework Programme Activities in FAFB.

Annex 1 – Glossary

Bioeconomy
encompasses the sectors producing renewable biological resources (e.g.
agriculture, forestry, aquaculture and fisheries) and the industries (e.g. pulp
and paper, food, chemical and energy industry) converting these resources and
waste streams into value added products, such as food, feed, bio-based products
and bioenergy. The bioeconomy has a strong innovation potential due to the use
of a wide range of sciences, enabling and industrial technologies.

Bio-based industries are industries, which use renewable biological resources for the
production of innovative bio-based products and biofuels. Production usually
takes place in biorefineries and often relies on bio-based processes.

Renewable biological resources or biomass means "the biodegradable fraction of
products, waste and residues from agriculture (including vegetal and animal
substances), forestry and related industries, as well as the biodegradable
fraction of industrial and municipal waste"[1].

Bio-based products are products that are wholly or partly derived from materials of
biological origin, excluding materials embedded in geological formations and/or
fossilised[2].
In the context of this Impact Assessment on a PPP on bio-based industries, the
focus lies on innovative bio-based products, which refer to "non-food
products derived from biomass [...]. Bio-based products may range from
high-value added fine chemicals such as pharmaceuticals, cosmetics, food
additives, etc., to high volume materials such as general bio-polymers or
chemical feedstocks [i.e. building blocks]. The concept excludes traditional
bio-based products, such as pulp and paper, and wood products, and biomass as
an energy source"[3].

Building blocks are basic chemical components that are used for the production of
more complex molecules in chemical production processes. They are usually
produced at high volumes.

Biofuels are
considered to be "liquid or gaseous fuels for transport produced from
biomass"[4].

Biorefineries rely on a concept that is analogous to that of petro-chemical
refinery processes. However, instead of producing a wide range of products and
fuels from fossil resources, biorefineries aim to produce multiple bio-based
products and fuels using renewable biological resources as a feedstock. The processes
used in biorefineries are often bio-based. (See Box 2 for further
explanations.)

Bio-based processes are processes based on the use of industrial biotechnology. They
are usually more energy and water efficient, emit less greenhouse gases (GHG),
and generate less toxic waste than conventional processes. They can both reduce
production costs and improve environmental performance[5].

Feedstock
refers to the raw material that is transformed into products by industrial
processes. In the case of biorefineries, the feedstock is biomass.

Joint Technology Initiative (JTIs) are instruments for addressing technological challenges that are of
key importance for the future competitiveness of the EU industry involved and
that industry and markets would fail to address without a sizeable public
intervention extended over a multi-annual timescale. Both the importance of the
JTIs to the future competitiveness of the industry involved and the special
nature of the public commitment requested (large-scale, multi-annual cash
contribution) warrant an explicitly defined commitment from industrial members
which goes beyond standard cost-sharing under H2020. Only such commitments are
creating a true public-private partnership.

Joint Undertaking (JU) is often used to designate established JTIs. The term "Joint
Undertaking" refers to the administrative structure of the JTI.

Annex 2 – Bio-based industries – Market players and
the "BIC"

1.           bio-based industries and their value
chains

Bio-based industries produce innovative
bio-based products and biofuels from renewable biological resources. They are
considered to be a cornerstone of the European Bioeconomy Strategy, as they
offer new opportunities for economic growth and job creation, while
contributing to moving towards a sustainable low-carbon economy.

A number of traditional European sectors,
such as the chemical, textile, wood-based, pulp and paper and energy
industries, have been using biomass for the production of traditional bio-based
products, such as clothes, furniture, paper and energy. In the light of
increasing competition from third countries with cheaper biomass resources,
these industries have made use of their strong science and technology base to
explore new sources of revenue, such as innovative, high added value bio-based
products (e.g. biopolymers, biochemicals, etc) and biofuels. This and concerns
about our dependence on fossil resources and their impact on climate change
have given rise to the sector of “bio-based industries”.

Bio-based industries can be considered as a
nascent industry sector, as its players include both traditional industries
that are moving partially or entirely towards innovative bio-based products and
biofuels and entirely new companies entirely dedicated to bio-based
applications. Indeed, bio-based processes and products can replace processes
and products from the petro-chemical industries; they are however also giving
rise to entirely new products and thus new markets.

While European companies have been key
players in developing bio-based applications world-wide, the further growth of
bio-based industries in Europe is being hampered by lack of support for the
development of their value chains, see Figure 1. Many of the key market players
are traditionally not used to collaborating, yet the challenges they are facing
cannot be addressed by a single company or sub-sector.

Note:
Copenhagen Economics, based on Biorefining Alliance (2012b)

Figure 1: The value chain of
bio-based industries[6]

Some of the key market players for the
establishment of bio-based value chains are listed in Table 1. Due to the
relatively novel nature of bio-based industries it is however difficult to
dissociate clearly the percentage in annual turnover and employment associated
to them today.

Table 1: Key market players for the
establishment of value chains for bio-based industries[7]

Sector || Annual turnover (billion Euro) || Employment (thousand) || Data sources

Agriculture (crop output) Industrial material use: 6%[8] || 205 12.3 || 26,700 1,602 || COPA-COGECA and Eurostat (2012)

Forestry a wood industry || 668 || 470 || Eurostat and Star-Colibri (2012)

Manufacture of sugar || 15 || 41 || Eurostat (2012)

Manufacture of starch and starch products || 10 || 18 || Eurostat (2012)

Manufacture of vegetable and animal oils and fats || 42 || 66 || Eurostat (2012)

Pulp, paper and paper products || 170 || 690 || Eurostat (2012)

Woodworking industry || 283 || 2,772 || Eurostat (2012)

Chemicals and  plastics (total) Bio-based: 10%[9] || 642 64 || 1190 119 || CEFIC and Eurostat (2012)

Enzymes || 0.8 || 5 || Based on input from Amfep, Novozymes, DuPont/Genencor, DSM (2010)

Biofuels || 42.6 || 221 || Global Renewable Fuels Association (2012)

Manufacture of textiles and textile products (50% bio-based) || 97 || 1,199 || Eurostat (2012)

The following sections provide an overview
over the main industries and sectors associated to bio-based industries. The
value chain for bio-based industries has been roughly split into three steps:
1) Biomass production, collection and transport; 2) Processing industries; and
3) End users/consumer markets. It should be noted that the separation between
these steps is often not so clear and that market players are often involved in
more than one of them.

For a more comprehensive discussion of
challenges, opportunities and bottlenecks for the different industries and
sectors also see the "Joint European Biorefinery Vision for 2030"
that was prepared by the FP7 project Star-COLIBRI[10].

1.1.        Biomass production,
collection and transport

Europe has highly
developed agriculture and forestry sectors. In 2008 the total land cover of EU
27 was around 420 million hectares with approximately 43% dedicated to
agricultural production and 40% to forestry. These sectors dispose of
significant unused or underexploited biomass that could be transformed by
bio-based industries, such as residues from agricultural and forestry
activities, or industrial crops.

However, the role of primary production
sectors does not have to be limited to that of biomass supplier. Unlike the
well-established supply chains for the food sector, the supply chains for
bio-based industries are still at an early development stage. By investing in
the development of these supply chains and the deployment of biorefineries,
agricultural cooperatives have the opportunity to become involved at a higher
level in the value chains, allowing them to benefit directly from the added
value and jobs these will generate. Developing value chains for bio-based
industries can thus provide a win-win situation for primary production and
processing industries.

1.1.1.     Agriculture

The EU agriculture is one of the biggest
suppliers to global agricultural markets. It has a share of 18% in world food
exports, worth € 76 billion. In production values, it agriculture provides more
than 40% of total OECD food production. There are about 14 million farmers in
the EU and a further 4 million people working in the food sector[11]. Together, the farming and food sectors provide about 7% of all
jobs and generate 6% of European gross domestic product.

Farmers and agri-cooperatives are typically
organised in national trade associations, which again are grouped at European
level in the Committee of Professional Agricultural Organisations COPA and the
General Confederation of Agricultural Cooperatives COGECA, which work closely
together under the umbrella of COPA-COGECA.

1.1.2.     Forestry and wood industry

Over the past 20 years, Europe has seen a
net increase in forest areas, gaining 16.9 million hectares in forest land
since 1990 and the highest levels of timber since recoding began[12]. From the 620 million cubic meters of net annual increment in 2010,
only about 60% were harvested.

It should be noted that the amount of
currently unused wood growth that can be economically harvested is limited by
diminishing wood dimensions and quality, as well as logistical accessibility.
Large portions of any significant increased wood harvesting, including forest
and wood industry residues, are likely to be attracted to the highly-subsidised
bioenergy market for heating and electricity generation in the foreseeable
future.

Forest owners and
forestry and wood industries are organised at European level in the
Confederation of European Forest Owners (CEPF) and the European State Forest
Association (EUSTAFOR).

1.1.3.     Challenges for biomass
production

Primary production sectors are facing
several challenges, ranging from[13]:

·
Providing a reliable supply of biomass in
sufficient quantity and quality, this includes considerations around
"sustainable intensification", efficient land use, and increasing the
availability of forestry biomass;

·
Increasing the efficiency of supply chains, e.g.
reducing losses and waste, putting in place closed-looped systems;

·
Anticipating and adapting to climate change;

·
Developing sustainability criteria for the
sourcing of biomass;

·
Communicating with the general public to improve
the image of bio-based industries.

1.2.        Processing industries

Europe has a strong
technology base for the transformation of biomass into high value added
bio-based products and biofuels. A comparison with the US and Asia shows that
the EU is leading in research and innovation in several areas of high relevance
for bio-based industries, including industrial biotechnology, enzyme
technology, fuel from waste, waste management and renewable energy[14]. Europe has a leading share in the total number of patent applications in the area of
industrial biotechnology filed since 2000[15]
and is home to the world's leading enzyme producers[16].

While the market share of bio-based
products and biofuels in the EU is still relatively low and confined to
specific niche markets, Europe is in a good position to develop the potential
of bio-based industries due to its strong (petro-)chemical and pulp and paper
industries. In view of an increasingly strong global competition, further
investments in research, innovation and deployment of bio-based processes and
products will be needed to maintain and expand this position[17]. This
includes the development of policy instruments, such as standards and labels,
supporting the uptake of bio-based products in consumer markets and public
procurement.

1.2.1.     Forest-based industries

The wood working industry is made up of
about 365 000 SMEs, including sawmilling (15%), wood construction products
(37%) and furniture manufacture (48%)[18].
European forest-based industries (including pulp and paper, wood industries)
are an important part of the European economy. Many of the top 100 players in
the global forest, paper and packaging industry world-wide are European, such
as Stora Enso, UPM-Kymmene, SCA, Smurfit Kappa, Mondi Group, Metsä Group,
Sappi, Norske Skog, Holmen, Södra, BillerudKorsnäs, ENCE[19].

Forest-based industries are organised in
several trade associations at European level, namely the European Confederation
of Woodworking Industries (CEI-Bois) and the Confederation of European Paper
Industries (CEPI).

1.2.2.     Sugar and starch industries

The EU is the world’s leading producer of beet
sugar. It accounts for about 50% of the total beet sugar production, which
about 20% of the world’s sugar production. In view of increasing competition
from sugar producers from other parts of the world, the European sugar industry
has been diversifying their activities, by providing feedstock for the
production of bioethanol and other fermentation processes for many years.
Companies active in this area include Nordzucker, Südzucker, Tereos, Cristal
Union and Suiker Unie.

The European starch industry produced more
than 600 products for the use in a vast range of food, non-food and feed
applications, going from native and modified starches to liquid and solid
sweeteners. About 70 starch production facilities across Europe produce close
to 10 million tonnes of starch every year from EU-grown wheat, maize and
potatoes. The EU consumption of starch and starch derivatives reached almost 9
million tonnes in 2011. Changes in subsidies allocated to starch sector, such
as the potato starch industry, are motivating many players to explore new
sources of income, such as bio-based products. Companies active in this area
include Cargill, Roquette, Vivecia and Tereos-Syral. At European sector is
represented mainly by the European Starch Industry
Association AAF.

1.2.3.     Vegetable and animal oil
and fat processing industries/Oleochemical industry

More
than 11 million hectares are dedicated to cultivating oilseeds (e.g. rapeseed,
sunflower seed, soybeans and linseed) in the EU, which are used for food, feed,
fuel and industrial purposes. Significant amounts of animal fats are generated
by the food industry, mainly by the meat industry. Vegetable oils and animal
fats are used in the food industry and for the production biodiesel and in the
oleochemical industry, ranging from detergents, lubricants to cosmetics. The worldwide consumption of basic oleochemicals is estimated at 3.5
million tonnes[20],
of which more than a third is produced in Western Europe.

European key players in this sector include
many (petro-)chemical companies, such as Akzo Nobel, BASF, Evonik, Clariant,
Procter and Gamble Chemicals, Dow Europe, Shell and Danisco. They are
represented at European level by trade associations, such as European
Oleochemicals and Allied Products Group (APAG) and the European Chemical
Industry Council (CEFIC).

1.2.4.     Biochemicals
and materials producers

Biochemicals and materials, such as lactic
acid, acetic acid and biopolymers, are a growing sector in Europe driven by an
increasing demand for sustainable solutions. Bioplastics are growing at an
annual rate of about 20%, as they are being used in an increasing number of
markets, ranging from agriculture, automotive, packaging to toys and textiles[21].

Most of the key players are existing
chemical companies that are diversifying their activities towards bio-based
applications. The chemical industry in 2010 generated a turnover of € 491
billion, a significant positive trade balance and represented direct employment
of 1.2 million people (3.4 million jobs including indirect employment)[22]. They include companies such as BASF, Novamont, Arkema, DuPont,
Metabolix, Limagrain, BioAmber and Braskem. These are grouped in trade
associations at European level, such as European Bioplastics or European
Renewable Resources and Materials Association (ERRMA).

1.2.5.     Enzymes industry

About 64% of all companies involved in biochemical
research and production of enzymes are located in the EU, making Europe a world-leader in this area[23]. The use of industrial biotechnology, i.e. of enzymes and
microorganisms, has lowered the costs of biochemical production, establishing
as an interesting production method of its own in addition to being a
co-production. Key players in the enzyme business include Novozymes, Dupont
Genencor and DSM. They are represented at European level by the European
Biotechnology Association for Bio-industries EuropaBio.

1.2.6.     Biofuels industry

The "first generation" or
"conventional" biofuels sector in Europe has been growing well as a
result of the EU's renewable energy targets in transport ("biofuel
targets") of 10% by 2020. In 2012, industry was already producing
sufficient biofuels to meet half of the target. In 2010, the production volume
of the biodiesel industry was double that of the bioethanol industry, due to
the prevalence of oilseed rape as an industrial crop in Europe. It is expected
that the two sub-sectors will produce comparable amounts by 2020. Market
players include companies, such as Roquette, Cargill, Tereos, Südzucker,
British Sugar, Abengoa, Inbicon, Neste Oil, Ineos, etc, many of which are
issued from the sugar, starch, vegetable oil or animal fats industries. They
are grouped in the European trade associations European Renewable Ethanol
(ePURE) and European Biodiesel Board (EBB).

The on-going revision of the EU biofuel
targets in the light of the controversy around food security and indirect land
use change (ILUC) intends to cap conventional biofuels at their current level
and to promote "second generation" or "advanced" biofuels,
which are produced from non-edible renewable biological resources, such as
agricultural or forestry residues and bio-waste. The "advanced"
biofuel sector is not very developed yet, as production of biofuels from these
feedstocks is currently taking place at a small scale in pilot and
demonstration plants[24]. It is likely that the players from the "conventional"
biofuels sector will gradually move to "advanced" biofuels.

1.2.7.     Challenges for processing
industries

Processing industries are facing several
challenges, ranging from[25]:

·
Maintaining the production output from existing
facilities, while making the transition to bio-based applications;

·
Securing sufficient sustainable feedstock in Europe (e.g. agricultural and forestry residues) and remaining competitive in volatile raw
material markets;

·
Exploring the use of wastes, by-products and
recycled materials as a feedstock source;

·
Improving sustainability (e.g. reducing
greenhouse gas emissions (GHG));

·
Optimising resource efficiency of processes
(e.g. for energy, water, raw material use);

·
Developing cascading approaches that create new
synergies between industries to use resources in a "smart" way;

·
Reducing costs of production processes, in
particular balancing economic return with minimal environmental impact;

·
Developing sustainability criteria for the
sourcing and processing of biomass;

·
Communicating with the general public to improve
the image of bio-based industries.

1.3.        End users/consumer markets

Bio-based products can range from
high-value added fine chemicals, such as pharmaceuticals, cosmetics, food
additives, etc., to high volume materials such as general bio-polymers or
chemical feedstocks (i.e. building blocks).

While some processing industries may
develop consumer products themselves, others may sell their bio-based products
to companies that are specialised in developing "final products" that
can be commercialised to consumers. Thus, biomaterials can be used for textiles
and packaging, bio-based ingredients in cosmetics or foods, etc. These
companies are often also established consumer brands, such as Procter and
Gamble and Unilever. Since they constitute the link to consumer markets, they
are also considered to be "end users".

In the case of biofuels, end users can
range from transport companies to normal consumers. The development of high
added value biofuels, such as jet fuels, could also attract airlines.

In view of broader economic and social
sustainability issues and of implications for consumers, the Commission is
currently studying biofuels from a consumer perspective as a part of a broader
study on the functioning of the fuel markets. The study is expected to generate
recommendations on improving and harmonising fuel labelling at the pump across
Member States[26].

1.3.1.     Challenges for end users

·
Developing new and sustainable bio-based
products and biofuels that either replace existing fossil-based products or
open entirely new markets;

·
Developing sustainability criteria,
certificates, standards and labels for bio-based products in order to ensure
their sustainability and communicate their environmental benefits.

·
Communicating with the general public to improve
the image of bio-based industries.

2.           The Biobased Industries Consortium (BIC)

The industry group backing the proposal for a
Bio-based PPP represents a wide range of stakeholders along the entire
bio-based industry value chain: the agro and agri-food sector, the sugar and
starch industries, the forestry and pulp and paper sector, materials and
chemical industries, bioenergy and biofuel sector, the biotechnology industry
and other technology providers. Figure 2 shows the role of different players
along the five value chains to be established as a basis for building
competitive bio-based industries in Europe.

The group has organised itself in a new legal
entity called the “Biobased Industries Consortium” (BIC) end of 2012, which
would be the private partner in a possible Bio-based PPP. All sectors are
represented in the BIC Board, including SMEs or SME clusters. BIC is also
supported by major industry trade associations (e.g. EuropaBio, CEPI,
COPA-COGECA, European Bioplastics, CEFIC) and the European Technology Platforms
(e.g. Forestry ETP, SusChem ETP), who can become associate members. The BIC
membership is open to any relevant industry parties, several companies from the
different market players are negotiating their participation in the BIC.

The Impact Assessment discusses the
establishment of five value chains based on the main feedstock available in Europe. Figure 2 indicates how the different members of BIC are positioned along these
value chains.

Note: Primary Conversion: refining of
biomass into its valuable components; Secondary conversion: Valorisation of
intermediates and products.

Figure 2: BIC members and their
position along the value chain

[1]               Directive 2003/30/EC

[2]               CEN - Report on Mandate M/429

[3]               DG ENTR (2009) Taking Bio-based from Promise to the
Market – A report from the Ad-hoc Advisory Group for Bio-based Products in the
framework of the European Commission’s Lead Market Initiative

[4]               Directive 2003/30/EC

[5]               COM(2012) 582

[6]               Copenhagen Economics (2013) Biobased industries - The
case for investment

[7]               Table compiled by CleverConsult and Nova Institute

[8]               Nova Institute (2013)

[9]               Estimation based on:

·
USDA (2008) – US Biobased Products Market
Potential and Projections through 2025. See: http://www.usda.gov/oce/reports/energy/BiobasedReport2008.pdf

·
Peter J. Nieuwenhuizen, David Lyon, Julia
Laukkonen and Murray Hartley (2009) - A rose in the bud? Anticipating
opportunities in industrial biotechnology. Prism/2/2009

·
G. Festel (2010) - Industry Structure and
Business Models for Industrial Biotechnology. Discussion paper at the OECD
workshop: Outlook for Industrial Biotechnology (Vienna 13-15 January 2010)

·
McKinsey (2009) – Presentation of J. Riese at
DSM.
See http://www.dsm.com/en\_US/downloads/sustainability/white\_biotech\_mckinsey\_feb\_2009.pdf

[10]             Star Colibri (2011) Joint European Biorefinery Vision
for 2030

[11]             DG AGRI (2012) The Common Agricultural Policy – A
partnership between Europe and farmers

[12]             FAO (2011) State of European forests

[13]             Star Colibri (2011) Joint European Biorefinery Vision
for 2030

[14]             SEC(2011) 1427

[15]             EPO (2012) Analysis of EPO data on industrial
biotechnology patents provided by Novozymes

[16]             Star-Colibri (2011) Joint European Biorefinery Vision for 2030

[17]             COM(2007) 860

[18]             Forest-Based Platform (2012) Horizons – Vision 2030 for
the European Forest-based Sector

[19]             PriceWaterHouseCooper (2012) Global Forest, Paper & Packaging Industry Survey 2012 edition – survey of 2011 results

[20]             APAG (2013) - http://www.apag.org/oleo/index.htm

[21]             European Bioplastics (2013) -
http://en.european-bioplastics.org/market/

[22]             CEFIC (2011) Facts and figures 2011

[23]             Star Colibri (2011) Joint European Biorefinery Vision
for 2030

[24]             Copenhagen Economics (2013) Biobased industries - The
case for investment

[25]             Star Colibri (2011) Joint European Biorefinery Vision
for 2030

[26]             Note: The study (to be published by end of 2013)
explores whether consumers are able to make informed choices by looking into
consumer understanding and the transparency of information. The study also
tackles the issues of availability of different fuels and retailers, and retail
prices.

BRIDGE Public
Private Partnership

Biobased and
Renewable Industries for Development and Growth in Europe

Strategic
Innovation and Research Agenda (SIRA)

Disclaimer:

This document reflects the ambitions and
objectives of the members of the Biobased Industries Consortium (BIC) in March
2013, and is the basis for road mapping towards the BRIDGE calls for proposals.
The BRIDGE SIRA will frequently be adjusted based on technology and market
developments, results obtained and ambitions of new members entering the BIC.

1.           Executive Summary

The Biobased Industry Vision

The industry vision is that of a competitive, innovative
and sustainable Europe leading the transition towards a post-petroleum
society while decoupling economic growth from resource depletion and
environmental impact.

In this vision, the Biobased Industries will optimize land use and
food security through a sustainable, resource-efficient and largely waste-free
utilisation of Europe’s renewable raw materials for industrial processing into a wide array of biobased products:

–
Advanced transportation fuels[1]

–
Chemicals

–
Materials

–
Food ingredients and feed

–
Energy

In doing so, the Biobased Industry will play an
important role in spurring sustainable growth and boosting Europe’s
competitiveness by re-industrialising and revitalising rural areas, thus
providing tens of thousands of high-skilled research, development and
production jobs over the next decade.

How to realise this Vision?

At the heart of this vision, the development of biobased value
chains will be accelerated. New biomass supply chains will be
developed to feed new integrated biorefineries while existing biorefineries
will be brought to a new level: to secure feedstock availability and
flexibility throughout the year, with multiple inputs and multiple outputs.
These developments will gradually complement and replace product streams from
fossil oil and provide innovative new products and solutions and markets. The
Biobased Industries play a critical role in the realisation of this vision and
are already making significant investments in biorefineries.

However, critical technological, political and market challenges
remain before full-scale commercialisation of the innovations can succeed and
innovative solutions are brought to the market. Another fundamental challenge
is the innovation “Valley of Death”, from research to market. These challenges
cannot be overcome by individual companies or the industry alone.

The competitiveness will be increased by reversing the currently
seen trend of significant biobased economy investments in regions outside Europe where framework conditions appear to be more attractive. A long term research and
innovation agenda jointly funded by public and private players can help address
this challenge. This will be done by developing new value chains, de-risking
investment in demonstration projects of innovative processes and in
building first-of-its-kind flagship plants[2].

BRIDGE Public Private
Partnership (PPP)

The PPP on Biobased Industries (BRIDGE PPP)
is an integrated and fundamental tool under Horizon 2020 to realise the
biobased industry vision. BRIDGE focuses on developing EU-based value chains
and accelerating the transition to advanced feedstock for biorefineries: It will
focus on:

·
Building new value chains based on the
development of sustainable biomass collection and supply systems with increased
productivity, and improved utilisation of biomass feedstock (incl. co- and
by-products), while unlocking utilisation and valorisation of waste and
lignocellulosic biomass;

·
Bringing existing value chains to new levels,
through optimised uses of feedstock and industrial side-streams, and offering
innovative added value products to the market, thus creating a market pull and
reinforcing the competitiveness of EU agriculture and forest based industries;

·
Bringing technology to maturity through research
and innovation, and through upgrading and building demonstration and
flagship biorefineries that will process the biomass into a range of innovative
biobased products;

BRIDGE fully recognises that biomass is not
an unlimited resource. It must be utilised intelligently, to ensure that
additional uses of biomass do not compromise the ability to produce food in
sufficient quality and quantity. By doing so, the PPP will ensure
availability of a sustainable and secure supply of biomass both for food and
feed applications as well as for chemicals, materials, fuels and energy.

To enable supply of additional and sufficient biomass for a biobased
economy, it is critical to increase the productivity and output of biomass from
European forest and agricultural land in a sustainable way and to unlock the
potential of the residues and side-streams and waste. BRIDGE focuses on
optimising utilisation of existing feedstock (forest and agricultural biomass)
and the development of new feedstock supply chains (e.g. forest residues,
agricultural lignocellulosic residues or dedicated crops), as well as
industrial side streams and organic municipal waste. Providing new markets for
biomass producers strengthens rural economies, and allows further development
and investment in the production system. Albeit essential for the future of the
biobased economy, the advanced feedstock supplies are still underdeveloped and
require significant infrastructure for mobilization and logistics. The goal of BRIDGE
is to address those issues by 2020 through research, demonstration of
technologies and flagship plants to build efficient and cost competitive supply
chains and transformation units.

Cooperation towards new biobased value
chains and markets

All developments will occur in parallel and
will lead to technology and competence transfer between sectors. In the short
term existing value chains will drive the product development, in particular
for added value products. Without biobased product market development at an
early stage, there will be no market pull in Europe for the biobased economy
and thus significant delay in its deployment. As new supply chains develop to
2020 and become economically viable, the biobased economy feedstock will
increasingly come from lignocellulosic supply.

The PPP builds upon the strong
agricultural, agro-food, forestry and pulp & paper sectors and
world-leading companies in the plant breeding, biotechnology, chemistry, energy
and bioprocess engineering. It also capitalizes on the vast amount of R&D
investments and results, both optimising and utilizing Europe's existing pilot
and demonstration facilities, and realising the required leap forward towards
advanced technologies utilizing waste and lignocellulosic feedstock. But not
least, BRIDGE will leverage the combined and complementary knowledge and skills
of academia, research organisations, SMEs[3]
and larger corporations to achieve its innovation objectives.

The Strategic Innovation and Research Agenda (SIRA)

The BRIDGE multi-annual SIRA translates the PPP ambitions into a
coherent set of actions that will deliver tangible and increasingly ambitious
results by 2020 and by 2030.

The SIRA includes a balanced combination of:

·
Value chain demonstration projects aiming towards integration and deployment of technologies and
R&D results into actual value chains and bringing technology close to
commercial scale through upscaling in demonstration activities and flagship
plants;

·
R&D projects
focused on filling the gaps in technological innovations: dedicated projects on
the development of specific technologies and concepts needed to realise the
value chains, and proving the principles in pilot installations;

·
Supporting projects, addressing the cross-sectoral challenges and supporting the value
chains to become reality.

The projects of the SIRA will be developed around 5 value chains,
where specific deliverables will be demonstrated, ultimately leading to flagship
projects.

·
From lignocellulosic feedstock to advanced
biofuels, biobased chemicals and biomaterials: realising the feedstock and
technology base for the next generation of fuels, chemicals and materials

·
The next generation forest-based value chains:
utilisation of the full potential of forestry biomass by improved mobilisation
and realisation of new added value products and markets

·
The next generation agro-based value chains:
realising the highest sustainability and added value by improved agricultural
production and new added value products and markets

·
Emergence of new value chains from (organic)
waste: From waste problems to economic opportunities by realising sustainable
technologies to convert waste into valuable products.

·
The integrated energy, pulp and chemicals
biorefineries: Realising sustainable bio-energy production, by backwards
integration with biorefinery operations isolating higher added value
components.

To have competitive biobased products in the market in 2020, each
step of the value chains needs to be competitive: the feedstock supply, the
processing, as well as the product(s) and market (both in term of price and
environmental performance). BRIDGE focuses on developing, optimizing and
demonstrating this competitiveness throughout the five value chains.

2.           The long-term strategic objectives for
the Biobased Economy

BRIDGE activities reflect clearly the ambitions of industrial
partners to contribute to a sustainable society on the longer term. The PPP
will trigger further developments leading to long-term benefits: new value chains and products initiated and demonstrated
by BRIDGE will come into full deployment, biorefineries
will be upgraded and new flagships will be built, new biobased developments will be triggered by the
PPP activities, and dedicated policy measures will be put in
place.

BRIDGE will achieve concrete and significant results by 2020, yet
the greatest leverage effect and commercial deployment will be reached in the
period from 2020 to 2030. Thus
the strategic objectives of the Biobased Economy that will be stimulated and
triggered by the PPP are evaluated over two periods[4].

Table 1. OVERALL STRATEGIC OBJECTIVES FOR 2020 and 2030

· The PPP activities will help to guarantee a secure and sustainable supply of lignocellulosic biomass (incl. waste) for European biorefineries through the development of integrated and sustainable agricultural and forestry value chains; · There is a potential to better valorise agriculture land that currently is no longer under production or is currently not under optimal use. BRIDGE aims to contribute to put 15% of this underutilized land back into production or at least be better utilized in 2020 (35% by 2030); · Current EU biomass utilisation for food, feed and materials is 1100 Mton. The amount of biomass used in the EU for energy and material uses is estimated to amount to 500 Mton[5]. The PPP results will contribute to achieve 10% increase in biomass supply in Europe by 2020 (20% by 2030) by increasing productivity and mobilization in sustainable manner while making best use of innovations in agriculture and forestry practices; · Current unused by-products and wastes from various biobased sources (agriculture, forestry, waste water treatment, sludge, organic household waste, yard waste, food processing waste, debarking waste) amount to a total of 2.8 bn tons/year in the EU[6]. BRIDGE activities will stimulate the mobilisation and utilisation of these potential resources to be increased to 15% of the total amount in 2020 (25 % in 2030). · BRIDGE results will contribute to maintain and further develop a competitive and knowledge intensive rural economy in Europe based on biorefineries resulting in new, higher and more diversified revenues to farmers and cooperatives and creating up to 400.000 new skilled jobs in 2020 (700.000 by 2030), of which more than 80% will be in rural and today underdeveloped areas; · The biomass available will be fully utilized and cycles will be closed. The PPP will contribute to protein isolation and valorisation from additional biomass processing, that will result in 15% reduced import of protein (e.g. soy) for feed in Europe in 2020 (50% by 2030). Currently 2300 Mton of phosphate and 2700 Mton of potash are consumed in the EU, most of which (estimated 90 %) are imported in the form of rock materials or processed rock (non-renewable resources) into the EU. Optimisation of soil fertility programmes including recovery and use of phosphate and potash, as triggered by the PPP activities, will lead to a 10% reduced import of those components for fertilizers applied to feedstock production (25% by 2030); · BRIDGE will contribute to and trigger industrial deployment of biobased chemicals, biomaterials and advanced biofuels, so that o 20% of the chemicals and materials production in Europe will be biobased by 2020 (30% to 2030); this is compared to the current situation 10% of chemicals and materials being biobased. o By 2020 at least 2%[7] of Europe’s transport energy demand will be met by sustainable advanced biofuels (25% in 2030, together with an overall 50% improved road transport system efficiency[8]); This is compared to the current situation of no advanced biofuels in European fuel mix. o At least 5 first-of-its-kind flagship plants will be realised to optimise technology for biomass conversion and ensure price-competitiveness for a second wave of commercial production to kick-in from 2017. · BRIDGE will realise a new generation of biobased materials and composites, allowing the production of better-performing components for application in several industries. With this the PPP contributes to the ambition that in 2020, the market supplied by biobased polymers and composites at comparable quality-price ratio compared to the fossil alternatives will be 5 times higher than today (factor 10 in 2030); increased consumer acceptance, concerted policy and labelling, awareness of biobased products as well as recycling and reuse will have an important contribution to the improved market penetration. · Through its combined efforts the PPP will have a significant contribution to the European objective of achieving 20% reduction in greenhouse gas emissions in 2020 (compared to 1990 levels). · As a consequence of following the openness and excellence principles, BRIDGE intends to actively involve academia, research organisations, and SMEs[9] such that at least 15% of the Horizon 2020 funds allocated through the PPP goes to these actors. It is expected that significant additional industry funding will go to academia, RTOs and SMEs through their participation in industry-driven demonstration activities

3.           The objectives and activities of BRIDGE
PPP

The long-term strategic objectives will be achieved by the
triggering of and leverage effects on the BRIDGE direct deliverables. This
Chapter describes the BRIDGE activities, as well as the direct deliverables (the
Key Performance Indicators - KPIs), which will be achieved if the right
framework conditions can be developed.

Table 2. BRIDGE direct deliverables 2020

· 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors (see figure 3); · At least 10 new biobased value chains (new products and feedstock); · Realising a total industrial investment of 2.8 bn Euro by the PPP partners in research, development and innovation via R&D projects, realised demonstration projects and flagship plants: both by building of new operations and upgrading existing and abandoned industrial sites to be converted into biorefinery operations (reindustrialisation). · More than 200 cooperation projects through cross-industry clusters · The new biobased products resulting from BRIDGE will on average have an at least 50% reduction on green house gas emission compared to their fossil alternatives. · 10 new regional biorefinery clusters raised: biorefinery demonstrations, with regional biomass supply · 10 conversion of existing and unused facilities into biorefineries · At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

BRIDGE aims at accelerating the building of biobased value chains,
starting from sustainable feedstock production and mobilization towards the
implementation and use of biobased materials and products (see Figure 1).

3.1.        BRIDGE activities in the
period 2014-2020

A sustainable growth of the biobased economy requires a dedicated
and balanced approach addressing specific common research and innovation
challenges, while integrating and demonstrating cooperation between
stakeholders over different disciplines and value chains. These key challenges
have been grouped into three types of projects, as follows:

·
Value chain demonstration projects aiming towards integration and deployment of technologies and
R&D results into actual value chains and bringing technology close to
commercial scale through upscaling in demonstration activities and flagship
projects;

·
R&D projects
focused on filling the gaps in technological innovations: dedicated projects on
the development of specific technologies and concepts needed to realise the
value chains, and proving the principles in pilot installations;

·
Supporting projects, addressing the cross-cutting challenges and supporting the value chains
to become reality.

Projects in BRIDGE, especially the value chain demonstration and
their resulting flagship projects, will consider the whole value chain.
To have competitive biobased products in the market in 2020, each step of the
value chain needs to be competitive: the feedstock supply, the processing and
the product (both in term of price and performances).

Further details about the different types of projects are presented
in the following chapters.

Figure 2: Overview of BRIDGE projects

Table 3.
Definitions of the innovation and research phases[10]

3.1.1.     Value Chain demonstration
projects - addressing the integration challenge

The core of BRIDGE is the realisation of new
untraditional partnerships. This aims for accelerating the building of biobased
value chains by the cooperation throughout and across value chains. Value
chains will be well integrated to existing infrastructure, demonstrated at
suitable level and fully aligned with market demand and sustainable policies.
Addressing these challenges through demonstration activities will prove the
viability of the new value chains thus contributing to overcome investments
barriers.

The demonstration activities in the value chain
projects of BRIDGE aim to provide the final proof of technological and economic
feasibility of a process or product manufacturing and the necessary supply
chain before moving into a commercial phase. A demonstration activity allows,
for instance, to scale-up a process to industrial or near-industrial scale. Each
step of the process has previously been tested and validated individually on a
pilot scale. The demonstration activities focus on proving how different
sub-processes can be combined using equipment available at industrial scale.
Research activities within the demonstration activities focus therefore mainly
on optimization of flows and cost reduction. Those research activities could be
for instance testing operational conditions that have been identified before at
research and pilot scale to optimize productivity, or to reduce costs. The
monitoring, data collection and analysis is critical during this phase. A
demonstration also aims at fine tuning the process to ensure a reproducible and
constant quality of the product(s).

Wherever possible the value chain demonstration
projects will make use of the existing infrastructure and available
demonstration facilities for the Biobased Economy (available at the PPP
partners - industry and SMEs, or open shared facilities[11]). For some of
the new innovative value chains new and near-industrial scale facilities will
be required. The developments in the demonstrated value chains will lead to
investments in flagship plants.

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(See 3.1.2).

Moreover, demonstrating the value chains will require
non-technological, cross-cutting challenges to be solved. This will lead to
calls for specific Supporting Projects on cross-cutting issues (See
3.1.3). The value chains demonstration projects will lead to investments in
full-scale Flagship projects. Each value chain area will lead to at
least one flagship project. These flagships projects will cover the full value chain. They will include programmes realising feedstock supply, ensuring the
market uptake, and integrating in the existing rural and industrial
infrastructures.

Five main innovative
biobased value chains have been identified, in which demonstration
projects will be carried out. These value chains are built on the ambitions of
the existing sectors / industries (the 'pillars') that all have biobased
ambitions, though from different perspectives. The current agro- and forest
biobased sectors want to strengthen their competitiveness by increasing their
product portfolio and maximise the use of scraps and residues. The waste-sector
aims to achieve a valuable and sustainable solution for converting
waste-streams into resources. And the chemicals, materials, fuels and energy
sector have ambitions to transform their current fossil-based products into new
sustainable biobased products with low environmental footprint aiming for
consolidation of existing markets and creation of new ones.

BRIDGE will thus strengthen the sustainability and
competitiveness of all biobased industries, by strengthening the innovation
pillars. This increased innovation capacity will facilitate and accelerate
the emergence of new sustainable value chains building on an innovative and
economically strong infrastructure: effectively building the bridges towards
new value chains (Figure 3).

Figure 3: Bridging between the pillars –
towards the Biobased Economy

Though starting from different feedstock and/or ambitions, all value
chains aim to improve the biomass supply chains and to cooperate for the
development and demonstration of new biobased chemicals, fuels, materials and
products. Therefore common ambitions are set on achieving the supply chain and
product deliverables:

Table 4. BRIDGE direct deliverables 2020 - Biomass Supply

· 5 to 10 new/innovative species varieties · 10% higher mobilisation of forest biomass by innovative technologies · 10% higher biomass yield by combining innovative cultivation methods with the regional most suitable crop rotation · Higher efficiency of fertilizer use (focus on N, P, K) by 15% increase of harvested biomass per unit of fertilizer · 15% increase in the water use efficiency by adapted crop rotations and management practices

Table 5. BRIDGE direct deliverables 2020 - Biobased Products

· 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030 · 10 functionalized chemicals and materials developed, with demonstration of their economic feasibility, lower environmental footprint and societal benefits · 5 successfully demonstrated concepts for valorisation of proteins from plant residues · 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions) · 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials · 10 new biodegradable, compostable or recyclable bio based products and materials for short life application

Value chain 1

From lignocellulosic feedstock to advanced biofuels, biobased
chemicals and biomaterials: realising the feedstock and technology base for the
next generation of fuels, chemicals and materials.

The projects within this value chain aim
at realising sustainable and efficient cascaded value chains at scale to
mobilise and convert lignocellulosic feedstock into cost-competitive advanced
biofuels[12] and biobased chemicals and
materials. This includes new/improved profitable lignocellulosic biomass
sources with a higher efficiency in the production (fertilizer, water use,
logistics) and/or improved digestibility in biorefineries. This will reduce
industrial waste streams and improve the environmental impact, contributing to
reducing the pressure on natural resources, the European dependency on imports
and increasing the development of rural livelihood. Moreover, it focuses on
creating a financial incentive and better revenues for farmers and forest
owners to produce and mobilise more biomass at a competitive price.

This value chain furthermore includes the demonstration of advanced
technologies to hydrolyze and convert lignocellulosics in a sustainable and
economic way into valuable chemical building blocks, materials, and advanced
biofuels.

The value chain demonstration projects will achieve:

–
Mobilizing an increasing supply by sustainably
increasing productivity and mobilization of currently unused biomass and
residues for agro and forest with special attention to SMEs and
farmers/foresters

–
Cost-efficient preparation of harvested material
at farm level including suitable packaging and e.g. water extraction from the
biomass to reduce transport volume and improved storage capability

–
Improved logistics and storage to provide a
continuous supply of feedstock

–
Development and demonstration of new feedstock
with higher sugar content (C6 and C5)

–
Integration of lignocellulosic feedstock (e.g.
agricultural residues) supply, transportation and storage into a complete
biorefinery logistics concept to demonstrate economics of year-round operation

–
Evaluate feedstock flexibility of
lignocellulosic enzymatic conversion processes for European lignocellulosic
biomasses (available agricultural residues, wood residues, energy crops) at
demonstration scale

–
Demonstration of cost-effective fractionation,
separation and purification technologies for lignocellulosic biomass into its
basic components, such as lignin, cellulose, hemi-cellulose, sugars and other
carbohydrates

–
Development and demonstration of low-cost
integrated bioreactors in order to reduce the investment needed for the
production of biofuels and biochemicals.

–
Separation and purification technologies for
high quality (low cost) sugar streams for chemicals and fuels

–
Development and testing of robust enzyme
cocktails for (ligno-cellulosic) biomass conversion for improved performance
and cost price reduction

–
Demonstrate innovative biotechnological,
biocatalytic and catalytic routes to obtain building blocks and chemicals from
cellulosic sugars (C5 and C6), to convert ethanol into butanol, and to produce
ethanol and butanol derivatives

–
Production of biobased advanced fuels and
materials via innovative advanced technologies

–
Improving the overall conversion yield from the
lignocellulosic feedstock into biochemicals and biofuels

–
Demonstrate processes for transforming lignin into
high(er) value products, such as hydrocarbons, biomolecules, aromatic platform
chemicals, resins, additives, new materials and composites

–
Demonstrate production of derivative products
from ethanol and other fermentation products (e.g. ethylene, ethylene oxide,
butanol derivatives, jet fuels)

–
Demonstrate processes that decrease Capex and /
or Opex and increase the overall process sustainability of processes based on
lignocellulosic feedstock

–
Demonstrate the economics of combined production
of biofuels and bio-based chemicals from lignocellulosic feedstock at large
scale

–
Demonstrate the added value of integration of
existing chemical and catalytic conversion technologies into production
processes based on lignocellulosic feedstock

–
Polymerisation processes based on new biobased
monomers, biopolymer processing into products (films, fibres, packaging,
structural composites for e.g. automotive, agriculture) and demonstration of
routes to replace specific fossil-based polymers

–
Demonstration of new value chains leading to
consumer products

–
Increase consumer awareness on biobased products
and biobased economy.

–
Identify and create market applications for new
biobased products; diversification of markets of current biomass based
products; networks and closer cooperation with downstream industries to better
understand and serve industrial customers and consumers requirements

–
Demonstrate industrial feasibility for new
products.

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.1.4; 1.2.1; 1.2.3; 1.2.4; 1.2.5; 1.2.6; 1.2.7; 2.1.1; 2.1.2; 2.1.3; 2.1.4; 2.2.1; 2.2.2; 2.2.4; 2.2.5; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.8; 3.1.10; 3.1.12; 3.2.1; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require
non-technological, cross-cutting challenges to be solved. This will lead to
calls for specific Supporting Projects on cross-cutting issues (See
3.1.3).

The value chains demonstration projects will lead to
investments in full-scale Flagship projects. This value chain will lead
to at least flagship project. These flagships projects will cover the full
value chain. They will include programmes realising feedstock supply, ensuring
the market uptake, and integrating in the existing rural and industrial
infrastructures. See below an example of one of the possible flagship projects
to be realised within value chain nr 1.

Value chain Flagship Example

A flagship for advanced biofuels using 400.000 dry tons of straw could produce biofuels and biochemicals (ethanol, butanol, polyols, diols) and energy

Value chain 2

The next generation forest-based value chains: utilisation of the
full potential of forestry biomass by improved mobilisation and realisation of
new added-value products and markets.

Projects within this value chain are built on the current
sustainable practice of forestry and its processing value chain (e.g. the pulp
and paper industry). The ambition of this sector is to increase the product
portfolio and to create new markets in addition to the current products.
Technologies and applications will be developed based on their current raw
materials and the residues and side streams.

This will be achieved by creating more added-value products from the
current feedstock base: by increasing feedstock mobilisation (forest residues),
and improved utilization of side and waste streams. For this, innovative and
efficient technologies will be implemented, new innovative products developed
and co-products, side-streams and residues valorised. This improves the
competitiveness of the European forest-based value chains while reducing the
pressure on biomass resources by producing more and better from less, and thus
developing rural livelihood.

The biobased products from this value chain help to mitigate climate
change by realising the replacement of fossil-based materials by biobased
materials with a positive social impact and lower environmental footprint. This
will fulfil market and consumer demand and create new markets by demonstrating
routes and concepts for new and innovative materials into new products.

The value chain demonstration projects will achieve:

–
Mobilizing an increasing supply by increasing
productivity and mobilization of forest biomass and residues in sustainable
manner while making best use of innovations in forestry practices

–
Biostimulants that enhance forestry output
increasing the nutrient use efficiency

–
Innovative tree species that can provide biomass
to the biorefinery with sustainable management practices

–
Development and demonstration of cost-effective
fractionation, separation and purification technologies for wood

–
Development and demonstration of new functional
biobased chemicals and materials from side streams and residues from forestry
and pulp and paper mills (e.g. based on lignin, cellulose, or e.g.
hemicelluloses)

–
Demonstration of new processes (biological,
chemical, and combination thereof) at scale, for added value products, and in
particular their economic viability and environmental benefits

–
Integration of new biobased additives and
formulation for high performance products / in cooperation with converters,
formulators and users

–
Demonstration of new and more efficient
production concepts for specialty and performance chemicals (e.g.
biosurfactants, emulsifiers, pigments, lubricants, specialty polymers,
additives, etc.)

–
Develop adequate advanced recycling methods for
bio-materials and residues (improved collection, sorting and processing)

–
Replacement of petrochemical specialties /
performance chemicals such as stabilizers, emulsifiers, chelants, surfactants,
solvents, thickeners, lubricants, antioxidants, pigments, etc. with bio-based
counterparts

–
Develop and demonstrate new functional biobased
materials: e.g. bioplastics, biocomposites, materials based on lignin, starch,
(nano-)cellulose or carbon fibre: towards fit-for-purpose solutions for diverse
industrial customers

–
Formulation of new materials into end-user
products and demonstration of new value chains leading to consumer products
with higher bio-content, improved ecoefficiency and/or improved performance at
the production and customer side (films, fibres, packaging, structural
composites for e.g. automotive, construction)

–
Application testing and demonstration of the
industrial feasibility of new products.

–
Increase consumer awareness on biobased products
and biobased economy.

–
Identify and create market applications for new
biobased products; diversification of markets of current biomass based
products; networks and closer cooperation with downstream industries to better
understand and serve industrial customers and consumers requirements

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.2.7; 1.2.8; 2.1.1; 2.1.2; 2.1.4; 2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.1; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.6; 3.1.8; 3.1.9; 3.1.11; 3.1.13; 3.1.15; 3.2.2; 3.2.3; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require
non-technological, cross-cutting challenges to be solved. This will lead to
calls for specific Supporting Projects on cross-cutting issues (See
3.1.3).

The value chains demonstration projects will lead to
investments in full-scale Flagship projects. This value chain will lead
to at least one flagship project. This flagship project will cover the full
value chain. They will include programmes realising feedstock supply, ensuring
the market uptake, and integrating in the existing rural and industrial
infrastructures. See below an example of one of the possible flagship projects
to be realised within value chain nr 2.

Value chain Flagship Example

A flagship converting a pulp mill into a multiproduct forest-based biorefinery producing new biobased products. Production of innovative pulp fibres for textiles at a volume of 200.000 ton/y from wood, coproducing new biobased products, e.g. biocomposites and biopolymers at 20.000 ton/y

Value chain 3

The next generation agro-based value chains: realising the highest
sustainability and added value by improved agricultural production and new
added value products and markets.

Projects within this value chain build on the current sustainable
practice of agriculture (incl. horticulture, and fertilizer companies) and its
processing value chain (e.g. agro-food industry). The ambition of this sector
is to increase and broaden the product portfolio and create new bio-based
markets on top of the current products. Technologies and applications will be
developed based on the current raw materials and increase the use of their
residues and side streams. This strengthens the competitiveness of the existing
value chains thereby securing the production of their primary products and
increasing the added value of industry in rural environment.

This will be achieved by creating more added value products from the
current feedstock base through increasing feedstock production and flexibility,
improved utilization of side streams and mobilising residues. Moreover new and
improved profitable crops with a higher efficiency in the production (regarding
fertilizer and water use, logistics) will reduce industrial waste streams and
improve the environmental impact. For the existing and new crops, innovative
and efficient technologies for growing, harvesting and logistics will be
implemented, new innovative products developed and co-products, side-streams
and residues valorised. Moreover, for specific value chains an innovative range
of inputs will become available enhancing agricultural productivity whilst not
threatening the environment. New plant protection products (biocides,
biocontrol, …) and plant nutrition products (biostimulants, high -efficiency
fertilizers) will be obtained under this value chain. This improves the
competitiveness of the European agricultural value chains while reducing the
pressure on biomass resources by improved utilisation of by-products and side
streams. Moreover, it will create a more competitive European farming sector,
thus especially developing rural areas.

The biobased products from this value chain help to mitigate climate
change by realising the replacement of fossil-based materials by biobased
materials with a positive social impact and lower environmental footprint. This
will fulfil market and consumer demand and create new markets by demonstrating
routes and concepts for new and innovative materials into new products.

The value chain demonstration projects will achieve:

–
Mobilizing an increasing supply by increasing
productivity and mobilization in sustainable manner while making best use of
innovations in agriculture practices (eg. By improved soil structure and
fertility, innovative crop and plant species)

–
New plant species or varieties: Deliver specific
ingredients for the new value chains (e.g. fatty acids, more homogeneous lipid
composition, single and complex carbohydrates or protein components)

–
Cost-efficient preparation of harvested
material: introduction of innovative technologies and machinery that reduce pre
& post-harvest losses and prepare the biomass in the best possible way.

–
Demonstration of technologies that recover
minerals (such as phosphate) from agricultural, agro-industrial and dairy
farming residues, convert them into fertilizers and prove new fertilizer
concepts by eg. field trials

–
Demonstration of valorisation concepts of
co-products and side-streams (proteins, pulp, fibres) from agro-food industry
towards higher added-value products including feed and food ingredients,
including efficient and cost-effective fractionation, separation purification
technologies to simplify biomass into its basic components, mildly extract or
separate components while preserving their functionalities (eg. Functional
proteins)

–
Demonstration of production concepts that
specifically use a combination of various biomass feedstocks thereby increasing
the diversity and functionality of products

–
Integration of new biobased additives and
formulation for high performance products / in cooperation with converters,
formulators and users

–
Demonstration of new and more efficient
production concepts for specialty and performance chemicals (e.g.
biosurfactants, bioplastics ,emulsifiers, pigments, lubricants, specialty
polymers, additives, etc.)

–
Replacement of fossil-based plasticizers and
flame retardants with biobased (superior) alternatives

–
Introduction of new biobased molecules: platform
chemicals and polymers going towards 100% biobased solutions, providing
alternatives and new solutions to fossil-based chemicals and materials, which
should be competitive in the market place and demonstrate environmental
benefits (through Life Cycle Assessment)

–
Develop and demonstrate new functional biobased
materials: e.g. bioplastics, biocomposites, materials based on lignin, starch,
(nano-)cellulose or carbon fibre: towards fit-for-purpose solutions for diverse
industrial customers

–
Formulation of new functional biobased materials
into end-user products and demonstration of new value chains leading to
consumer products with higher bio-content, improved eco-efficiency and/or improved
performance at the production and customer side (films, fibres, packaging,
structural composites for e.g. automotive, construction, infrastructure)

–
Application testing and demonstration of the
industrial feasibility of new products.

–
Demonstration of new biodegradable, compostable
or recyclable materials and products and development of adequate advanced
recycling methods for bio-materials and residues (improved collection, sorting
and processing)

–
Establishing stronger links and better
understanding of the needs (quality, performance) of downstream industries

–
Increase consumer awareness on biobased products
and biobased economy.

–
Identify and create market applications for new
biobased products; diversification of markets of current biomass based products;
networks and closer cooperation with downstream industries to better understand
and serve industrial customers and consumers requirements

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.1.2; 1.1.5; 1.1.6; 1.1.7; 1.2.7; 1.2.8; 1.2.2; 2.1.1; 2.1.2; 2.1.4; 2.1.5; 2.2.1; 2.2.2; 2.2.3; 2.2.4; 2.2.5; 3.1.1; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.6; 3.1.8; 3.1.9; 3.1.11; 3.1.13; 3.1.15; 3.2.2; 3.2.3; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require
non-technological, cross-cutting challenges to be solved. This will lead to
calls for specific Supporting Projects on cross-cutting issues (See
3.1.3).

The value chains demonstration projects will lead to
investments in full-scale Flagship projects. This value chain will lead
to at least one flagship project. This flagship project will cover the full value chain. They will include programmes realising feedstock supply, ensuring the
market uptake, and integrating in the existing rural and industrial
infrastructures. See below an example of one of the possible flagship projects
to be realised within value chain nr 3.

Value chain Flagship Example

A flagship processing agricultural green or lignocellulosic residues (beet leaves, grass, …) and surplus into 100.000 ton/y of proteins, and valuable chemicals and materials, like dicarboxylic acids

Value chain 4

Emergence of new value chains from (organic) waste: From waste
problems to economic opportunities by realising sustainable technologies to
convert waste into valuable products.

Projects within this value chain aim to develop and demonstrate
value chains based on currently unused by-streams and waste from various
biobased sources (agriculture, forestry, waste water treatment, sludge, organic
household waste, yard waste, food processing waste, debarking waste). Realising cost competitive value chains producing added-value
products will create solutions for the environmental problem of increasing
waste flows (partly due to urbanisation), reducing pressure on virgin
resources, and increasing the competiveness of industry.

Energy, fuels and building blocks produced from this value chain
help in mitigating climate change by realising the replacement of fossil-based
solutions with alternatives with a positive social impact and lower
environmental footprint.

The value chain demonstration projects will achieve:

–
Cost-efficient preparation of heterogeneous
waste material, e.g. through e.g. separation
technologies for the biogenic part of municipal solid waste (MSW), or thermocatalytical processes (gasification,
torrefaction or pyrolysis)

–
Modification of the pretreatment conditions to
make the cellulose from (MSW) accessible to the enzymes.

–
Adaptation of existing technologies to
alternative feedstock, like the organic fraction of urban waste.

–
Development and demonstration of new enzymes
that can hydrolyse the cellulose fraction of MSW to sugars with improved yield,
from which biofuels, building blocks and bioproducts can be obtained using
different biological and chemical routes.

–
Organic waste (agro-food residues and MSW)
bioconversion to added value molecules using microorganisms and also higher
organisms (e.g. insects)

–
Development and demonstration of processes based
on bark and other “wastes / sidestreams" from existing industrial uses of
biomass as feedstock for high value biobased chemicals and biomolecules.

–
Implement adequate advanced recycling methods
for bio-materials and residues (improved collection, sorting and processing);

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(see section 3.1.2 for the description behind the topics):

R&D project topics

2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.3;

Moreover, demonstrating the value chains will require
non-technological, cross-cutting challenges to be solved. This will lead to
calls for specific Supporting Projects on cross-cutting issues (See
3.1.3).

The value chains demonstration projects will lead to
investments in full-scale Flagship projects. This value chain will lead
to at least one flagship project. This flagship project will cover the full value chain. They will include programmes realising feedstock supply, ensuring the
market uptake, and integrating in the existing rural and industrial
infrastructures. See below an example of one of the possible flagship projects
to be realised within value chain nr 4.

Value chain Flagship Example

A flagship that Converts 400 000 tons of straw, 650,000 tons of manure and 50.000 tons of municipal solid waste into 73 million litres of bioethanol and about 99 million cubic meters of biogas (of which 76 million cubic metres of biogas will be upgraded and fed into the natural gas grid). In addition, district heating for approx. 10-20 000 households and electricity equivalent to 15-25,000 households' consumption will be produced.

[1]               Biofuel from waste, residue and non-food cellulosic
material, RED Article 21(2). This means that any R&D, demonstration and
flagships in the PPP dedicated to biofuel production will be based on waste,
residue and non-food cellulosic feedstock.

[2]               Flagship plants are the first
units of value chains operating at an economically viable scale

[3]               The primary mode of participation by SMEs in PPP
activities is expected to be as regular industry actors

[4]               The
qualitative and quantitative objectives in this table have been identified
through intense discussions among all partners, and reflect business plans and
expected investments. Unless otherwise stated the reference for the figures is
the current situation in 2012

[5]               Of this, approx. 400 Mton comes from forestry and
other wood sources. In 2010, 229 Mton wood was used for materials, 173 Mton for
energy (Mantau, U. et al. (2010), EUwood. Final report, 30. June 2010). In
2008, industry used some 18.6 million tonnes of biomass (excl. wood), and the
total quantity of biomass (excl. wood) used for both materials and energy use
amounted to over 98 million tonnes (Jossart, J.-M. (2009): Development of
the bioenergy sector – future European demand factors, technological
development and competition. EEA-JRC-UASE Workshop Biomass resource assessment
for biofuels/bioenergy and competition with other biomass. Eberswalde, December
2009). No numbers exist for EU alone, but the worldwide harvested biomass
in 2008 was 13 bn tons (forestal and agricultural). Of this, 73% was used for
food and feed, 11% was wood for material use, 10% wood for energy use and only
approx. 3 % each was renewable raw materials for material and energy use (Nova-Institut
2011, FAO 2011, Kausmann et al 2008).

[6]               IEA Bioenergy Task 37. See also: http://www.iea-biogas.net/\_download/publi-task37/Potential%20of%20Codigestion%20short%20Brosch221203.pdf,
http://www.iea-biogas.net/\_download/publi-task37/IEA\_ABP-Brochure\_en\_2.pdf,
http://www.iea-biogas.net/\_download/publi-task37/Biogas%20upgrading.pdf,
http://www.biores.eu/docs/BIOGASFUNDAMENTALS/IEA-MSWAD.pdf,
http://epp.eurostat.ec.europa.eu/portal/page/portal/waste/waste\_generation\_management/generation

[7]               A 2% substitution of the
transport fuels in 2020 with advanced ethanol would require 45 Mton of biomass.

[8]               ERTRAC SRA 2010

[9]               Should SMEs decide to
participate in contract research. But it is expected that the primary mode of
participation by SMEs in PPP activities will be as regular industry actors,
which significantly increases the industrial SME participation.

[10]             Starting points are the definitions provided in the
EIBI Implementation plan, as well as the TRL-definitions used by the Commission
(Reference to Commission document on TRL levels). TRL 3: Analytical and experimental critical function and/or characteristic
proof-of-concept; TRL 4: Technology validation in a laboratory environment; TRL
5: Technology validation in a relevant environment ; TRL 6: Technology demonstration
in a relevant environment; TRL 7: Technology prototype demonstration in an
operational environment ; TRL 8: Actual technology system completed and
qualified through test and demonstration ; TRL 9: Actual technology system
qualified through successful mission operations;

[11]             E.g. Leuna, Biobase Europe Ghent, BRI platform Reims,
Bioprocess Pilot Facilities Delft, facilities at RTOs, as well as company-owned
pilot and demonstration facilities

[12]             biofuels include road transport fuel and aviation jet
fuel

Value chain 5

The integrated energy, pulp and chemicals biorefineries: Realising
sustainable bio-energy production, by backwards integration with biorefinery
operations isolating higher added value components.

New value chains will be demonstrated that improve the
sustainability and economics of bio-energy production by conversion /
integration into biorefinery operations: creating a spectrum of added-value
products from the feedstock in addition to bio-energy. This will decrease the
pressure on biomass resources and increase industries competitiveness.

New chemicals, biofuels and materials from this value chain help
mitigating climate change by realising the replacement of fossil-based
materials by biobased materials with a positive social impact and lower
environmental footprint. This will fulfil market and consumer demand and create
new markets by demonstrating routes and concepts for new and innovative
materials into new products.

The value chain demonstration projects will achieve:

–
Primary processing of biomass at farm level
including suitable packaging and e.g. water extraction from the biomass to
reduce transport volume and improved storage capability (e.g. by Torrefaction,
pyrolysis, shredding, etc.)

–
Integrating the production of bio-products and
advanced bio-energy carriers in a smart way (smart use, maximise carbon and
energy yield from biomass)

–
Demonstrate processes for more efficient use of
lignin: transformation into high(er) value hydrocarbons polymers, aromatics and
performance chemicals before energetic use.

–
Densify the energy content of the initial
feedstock through several pre-treatment processes, e.g. torrefaction
pelletization and pyrolysis oil production.

–
Implementation of conversion technologies
allowing for the use of heterogeneous biomass while ensuring high efficiency
and low environmental impact

–
Turning solid residues (bottom ash, fly ash)
into valuable products, a.o. taking advantage of their mineral properties for
plant nutrition.

–
Integrating technological results from other value
chains into the integrated bio-energy concept

The value chain demonstration projects will also reveal
technological challenges that need more extensive R&D. These specific
technological challenges are the basis of the calls for R&D Projects
(see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.4; 2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.3;

The value chains demonstration projects will lead to
investments in full-scale Flagship projects. This value chain will lead
to at least one flagship project. This flagship project will cover the full
value chain. It will include programmes realising feedstock supply, ensuring
the market uptake, and integrating in the existing rural and industrial
infrastructures. See below an example of a possible flagship project to be
realised within value chain nr 5.

Value chain Flagship Example

A flagship for the conversion of an energy plant that currently co-fires 1.000.000 ton/y of biomass for energy production, into an integrated biorefinery, producing 400.000 ton/y cellulose fibres & chemicals next to bio-energy

3.1.2.     The R&D projects
(addressing the innovation challenge)

While value chains can be built partly on already developed research
results and successful pilot trials, the demonstration projects will still
require substantial research and development before the whole value
chain can be moved to the demonstration level.

Calls for R&D projects (including specifically SME targeted
projects) will address the specific research and innovation challenges arising
from the value chain demonstration activities. This will generate the necessary
enabling knowledge and technologies to build and reinforce the new value chains
from biomass to biorefineries and markets/products. Research and innovation
activities addressing the innovation challenge will be centred around the three
parts of the value chain: biomass supply, biorefineries and products &
markets. The table on the next pages shows an indication of possible
research areas and their timing. However, calls will only address those
topics that arise from encountered challenges in the value chains to be
demonstrated and realised. Calls will therefore be made more specific
based on the value chains to be realized. Some (hypothetical) examples of
topics becoming more specific:

–
"Development of concepts for reuse of
fertilizer recovered from by-streams in biorefinery operations" (1.1.2)
might become a specific call on "Development of an economical process for
the isolation of pure phosphate from process water arising from the value chain
that processes Irish nature grass into proteins for fish feed and specific
functional food ingredients" and / or "Development of an effective
fertilizer application for the phosphate recovered from process water arising
from the value chain that processes Irish nature grass into proteins for fish
feed and specific functional food ingredients"

–
"Efficient and cost-effective fractionation
and separation technologies to simplify biomass into its basic components"
(2.1.1) might become "Development of a sustainable and cost-efficient
technology to separate wheat straw from Denmark into it's pure components
cellulose, hemicellulose and lignin, within the specifications given by the
further conversion of those components into pure sugars, cellulose for paper,
benzene and furans"

Table 6. THE INNOVATION CHALLENGE - MAIN RESEARCH AREAS supporting the value chains

1. Fostering a sustainable biomass supply to feed both existing and new value chains

1.1 Increase biomass production by improving agricultural practices || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

1.1.1 || Development of higher efficiency in cultivation systems to increase yield, availability and use of forestry and agricultural biomass (in particular residues, co- and by-products) while meeting the range of other demands on arable and woodland. Reducing feedstock production costs under sustainable production methods with added value for the complete production chain and demonstrating of value creation (economic, environmental and social) at the production/ mobilisation stage || || ||

1.1.2 || Development of concepts for reuse of fertilizer recovered from by-streams in biorefinery operations. Preferably leading to a separation of organic matter and minerals, helping to improve plant yields and soil quality and reducing waste and environmental impact of biorefineries || || ||

1.1.3 || Identifying the most appropriate crop cultivation systems to increase biomass production for specific value chains taking into account climate change, crop rotational effects, resistance to biotic and abiotic stresses, nutrient and carbon balance, water use efficiency, soil tillage practices and management needs || || ||

1.1.4 || Development of pre-transformation techniques at harvest and/or storage, in particular focusing on cost- effective concentration systems to facilitate transport and/or storage. || || ||

1.1.5 || Development of agronomic solutions to maintain soil structure and fertility, reducing erosion, putting into value arable land and maximizing water use efficiency for specific areas in order to supply the biomass production for dedicated new fuels, chemicals and materials value chains || || ||

1.1.6 || Precision farming: improving soil quality, water, land use, new input management technologies (water, crop protection, animal husbandry techniques, sensor technology) for specific areas in order to increase the biomass supply for dedicated new value chains; || || ||

1.1.7 || Develop regional closed loop systems in biorefinery clusters and hubs: study the use and impact of spreading safe and nutrient-rich process water from biorefineries onto fields on soil quality and productivity || || ||

1.2 Mobilising an increasing supply || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

1.2.1 || New plant species or varieties: Improving composition of lignocellulose or other components for the use of plants as source of renewable materials to be used in specific value cahins (e.g. more easily hydrolysable, lower lignin content, lignin with less stable bonds) || || ||

1.2.2 || New plant species or varieties: Deliver specific ingredients (e.g. fatty acids, more homogeneous lipid composition, single and complex carbohydrates or protein components) || || ||

1.2.3 || New plant species or varieties: Create a list of biomass genotypes (e.g., poplar, willow, miscanthus, reed canary grass) to be grown for specific new value chains || || ||

1.2.4 || Mobilisation of currently unused biomass and residues from agriculture and forest through precision equipment for harvesting and collection, while maintaining other important functions of woodland and crop land || || ||

1.2.5 || Storage: Develop technologies to improve biomass storage properties and to improve feedstock quality || || ||

1.2.6 || Logistics: Improved logistics and storage to provide a continuous supply of feedstock to specific value chains, minimise transport costs, exploitation of transport as process stage and guarantee intermediate product quality and availability; || || ||

1.2.7 || Planning and managing integrated logistics chains at local and regional scale to achieve the maximum supply potential required for the value chains (also combining different transport types: road, railways and waterways) || || ||

1.2.8 || Recycling: Develop adequate advanced recycling methods for bio-materials and residues (improved collection, sorting and processing) || || ||

2. Optimising efficient processing through R&D and pilot biorefineries

2.1 Primary conversion processes || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

2.1.1 || Efficient and cost-effective fractionation and separation technologies to simplify biomass into its basic components, such as lignin, cellulose, hemi-cellulose, minerals, oils and fatty acids, protein, starch, sugars and other carbohydrates || || ||

2.1.2 || Innovations in existing primary processes (agro-food, pulp and paper) to minimise residues and obtain higher value || || ||

2.1.3 || Advanced technologies to mildly extract or separate components while preserving their functionalities and minimising the degradation of other components to enable their further valorisation || || ||

2.1.4 || Cost-efficient preparation of harvested material || || ||

2.1.5 || Ensuring flexibility on size of biorefineries while at the same time remaining price-competitive Combining low investment costs with large regional stakeholder commitment improving market deployment with the specific advantages of local/regional processing || || ||

2.2 Secondary conversion processes || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

2.2.1 || Bio-technological || || ||

2.2.2 || Chemo-catalytical || || ||

2.2.3 || Thermo-chemical processes || || ||

2.2.4 || Hybrid & consolidated processes || || ||

2.2.5 || Downstream processes || || ||

3. Developing innovative products and accelerating market-pull for biobased products and fuels

3.1 New materials & products (incl. conversion and functionalization technologies) || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.1.1 || Materials based on lignin (and bio-aromatic) chemistry; || || ||

3.1.2 || Biobased alternatives for existing polymers and innovative polymers from new biobased monomers || || ||

3.1.3 || Advanced biofuels and bioenergy carriers from waste, residues, lignocellulosic materials and other new promising biomass sources; || || ||

3.1.4 || New (chemical) building blocks from renewable resources; || || ||

3.1.5 || New functional biobased materials and products: e.g. bioplastics, biocomposites, materials based on lignin, starch, (nano-)cellulose or carbon fibres; || || ||

3.1.6 || Materials based on cellulosic and hemicellulosic fibres and fibre/polymer composites || || ||

3.1.7 || Lignin-based carbon fibres and nano-cellulose fibres; || || ||

3.1.8 || New packaging solutions derived from biobased materials; || || ||

3.1.9 || Materials based on biopolymers (such as starch, polyesters from vegetable oils and sugar, chitin) || || ||

3.1.10 || Biomass based oleochemistry: fatty acids conversion technologies, including chemistry (metathesis, for example) and biotechnology (including microbial conversion of sugars to lipids/fatty acids, cutin and suberin conversions) || || ||

3.1.11 || New advanced fertilizers; || || ||

3.1.12 || New high-value products (pharmaceuticals, cosmetics, chemical), in some cases directly extracted from plants || || ||

3.1.13 || New hygiene products derived from biobased solutions || || ||

3.1.14 || Materials based on oils and fats from plants and animals e.g. biolubricants, biosurfactants, biosolvents || || ||

3.1.15 || Recyclability concepts for biomaterials || || ||

3.2 Conversion and functionalisation technologies || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.2.1 || Functionalisation and conversion technologies, including chemical catalysis, mechanical, thermal and biotechnology processes towards functionalised chemicals and products || || ||

3.2.2 || Fractionation and extraction technologies to preserve structure and activities of macromolecules of natural polymers. Advanced functionalisation technologies; || || ||

3.2.3 || Biopolymer processing into products (films, fibres, packaging, structural composites for e.g. automotive, agriculture). || || ||

3.2.4 || Polymerisation processes based on new biobased monomers; || || ||

3.3 New applications and market development || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.3.1 || Connect market demand with biobased opportunities: combine required techno-economical specifications with opportunities of new biobased chemicals and materials || || ||

3.3.2 || Increase consumer awareness on biobased products and biobased economy. || || ||

3.3.3 || Identify and create market applications for new biobased products; diversification of markets of current biomass based products; networks and closer cooperation with downstream industries to better understand and serve industrial customers and consumers requirements || || ||

3.3.4 || Demonstrate industrial feasibility for new products. || || ||

3.3.5 || Create combinations and synergies between fossil and biobased materials. || || ||

3.1.3.     Supporting projects
(addressing the societal challenges)

Demonstrating the value chains will require non-technological
cross-cutting challenges to be solved. Some of those will be solved in the
value chain demonstration projects and R&D projects, or on the programme
level in the Joint Undertaking. Others will lead to calls for specific Supporting
Projects on cross-cutting issues. Supporting projects will thus enable the
value chains to face the many critical elements related to cross-disciplinary
approaches. These practices and tools can either address market, legal aspects,
technology, quality or any other aspect. Cross-cutting issues include
cross-sectoral and critical elements which connect the different steps of the
value chains, the different levels of innovation as well as the different
stakeholders involved from the private and the public sector.

The Supporting Projects in BRIDGE will take into account the
following cross-cutting issues:

–
Clustering and networking: Clusters are networks of stakeholders in the bioeconomy, which
transcend regions and value chains. They will be essential to develop new value
chains and support the development of new processes and materials by connecting
different partners: research, technology development, operators/producers and
consumers. Some value chains aim to create and strengthen optimally integrated
areas of rural and industrial biobased activities (Biobased 'hubs), and create
and strengthen clusters which connect value chains and linking regional
agriculture, industry and research networks. Activities might also involve the
demonstration of systems of new integrated cascaded biorefinery approaches or
systems of industrial ecology and symbiosis: combined residue processing,
bio-energy production, heat integration and valorisation, re-use of water and
(organic) nutrients, analyse energy streams to discover what processes /
companies could fit together, etc. Studies might include feasibility studies
regarding the optimal locations for biorefineries and suitable unused
facilities for conversion to biorefineries.

–
SME engagement:
SMEs are expected to play an important role in building the European bio-based
industries. They will be active throughout the whole PPP, in R&D and
demonstration projects. In addition, BRIDGE will develop
supportive measures for SMEs concerning critical issues such as financing,
market information and forecasts, legal obstacles and international partnering.
Moreover it is planned that SMEs pay a reduced membership fee to the PPP[1].

–
Standards and regulations: While developing new biobased products, the BRIDGE projects will
contribute to the development of standards working closely together with CEN[2]. Specific
questions might arise from the value chain demonstration for analysing the
relationship between the development of standards and regulations and the
markets for bio-based products and bio-fuels and identify societal demands and
unmet market needs. This includes the development of a common language over the
entire value chain(s).

–
Feed-stock sustainability and LCA: Specific value chains might require the assessment of methodologies
for addressing sustainability criteria facilitating all projects, including a
sustainability and economic feasibility evaluation over the whole value chain,
and the environmental footprint of the resulting product.

Cross-cutting issues to be covered in the individual projects and by
the overall Joint Undertaking concern increasing awareness and support for the
activities of BRIDGE. Actions will include proactive communication,
dissemination and outreach, educational activities and monitoring the impact on
the European biobased economy.

3.2.        Monitoring the progress
and impact

Fast implementation and performance feedback are key issues of BRIDGE.
Overarching strategic objectives towards the Biobased Economy that will be
triggered by the PPP activities and results have been identified in Table 1
(Chapter 2), covering the whole value chain as well as cross-cutting areas. Looking
at the ambition and the high level strategic objectives of BRIDGE, the
effectiveness and throughput will be the most suitable aspects for monitoring
the success of the initiative.

The PPP is a chain of links: input, throughput, output, outcome,
impact. Each of these links is taken into account in monitoring to assess and
evaluate:

–
Efficiency, in
terms of relationship input/output;

–
Effectiveness, in
terms of relationship input/outcome and impact;

–
Throughput, in
terms of relationship between output, outcome and impact.

It is proposed to implement all validated technologies or processes
at pilot scale within demonstration projects and in some cases flagships
allowing the assessment of the programme progress with the help of an
appropriate set of KPIs. Three levels of quantitative and qualitative Key
Performance Indicators have been identified (see Figure 4).

Figure 4:
The different levels of KPIs

In particular:

–
KPIs “Level 1” address
the contribution to accomplishment of the overall strategic objectives of the
Biobased Economy associated with the Vision 2030 (outcome and impact). Although
the PPP results and activities will be crucial triggers for these objectives,
these objectives will not be direct results of the PPP;

–
KPIs “Level 2” aim
at monitoring the progress of BRIDGE and measuring how the specific research
and innovation targets defined by 2020 are met (output and outcome);

–
KPIs “Level 3”
allow monitoring the success of each project to be funded under BRIDGE.

KPI level 3 will be defined by each project as ad-hoc KPIs attuned
to KPI level 2.

Efficiency
of BRIDGE

For the sake of monitoring progress and implementation of BRIDGE, the
direct quantitative objectives could be used as KPIs Level 2 to monitor the
progress of the programme (see Tables 2, 4, 5 and 8). A limited selection from
these objectives is made as key specific objectives. These objectives are
directly linked to a set of key performance indicators (kpi's), to be measured
and monitored during the progress of the PPP, and to be used to steer the PPP
activities accordingly. See table 8 and 9 on the next pages.

The monitoring at this level will be a task of the programme
management. Frequent monitoring gives insight in the efficiency of the
programme During the execution of the programme these KPIs will be evaluated on
their effectiveness, in order to be able to change and complete the monitoring
of the programme when needed.

These kpi's will be complemented with operational objectives on the
PPP performance to be monitored continuously:

–
Overall percentage % of industry investments
(cash + in-kind) in the total PPP organisation and projects

–
A well balanced SME involvement in BRIDGE
organisation and projects, in line with Horizon 2020

–
Involvement of RTOs / Academia (i.e. targeted
amount of finances flowing to RTOs / Academia)

–
Balance between R&D, demonstration and
supporting projects

–
Addressing the societal challenges (i.e.
including some cross-cutting issues in demonstration projects)

–
Follow-up on R&D results: % of PPP R&D
results brought into demonstration projects

–
How well do the projects realised address the
variety of topics in the SIRA in a balanced way (e.g. variety in feedstock, in
products, in processes, etc.)

–
A geographically balanced distribution of
projects across member states (in all projects, and especially large
demonstrators)

Table 7. PPP Key Objectives

· 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors); · At least 10 new biobased value chains (new products and feedstock); · More than 200 cooperation projects through cross-industry clusters · 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030 · 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions) · 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials · At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

Effectivity of BRIDGE

To get insight in the effectiveness of the programme, i.e. answering
the question ‘are we doing the right things?’, a monitoring for the KPIs at
Level 1 (Table 1) has to be set-up. This is a task of the programme management,
but might be supported by a Supporting Project within the PPP, that will run
throughout the execution of the programme.

KPI level 3 will be defined by each project. This can be done by
setting monitoring criteria in the call for proposal and/or by demanding the
determination of KPIs in the Description of Work of the projects. The KPIs
Level 3 have to be attuned to KPI level 2 and 1. Ensuring the KPIs Level 3 are
well attuned is the responsibility of the programme management of BRIDGE. The
project manager is responsible for monitoring the progress of the project and
has to deliver data for KPIs Level 1 and 2 when needed.

Table 8: PPP key specific objectives +
kpi's for monitoring and assessing the progress of the Biobased Industries PPP

1 || Objective || 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors);

KPI || # of new cross-sector interconnections in BRIDGE projects || 31-12-'16 || 31-12-'18 || 31-12-'20

10 || 20 || 36

How to analyze || Amount of innovative cooperation's started in BRIDGE value chain demonstration projects: When companies from different sectors start to cooperate on building new value chains, while these companies have not been active in the same value chain before / did not cooperate in business before (or did cooperate but in a totally different field).

2 || Objective || At least 10 new biobased value chains (new products and feedstock);

KPI || New biobased value chains realised || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 4 || 10

How to analyze || Amount of completely new value chains (from raw material to product) developed in BRIDGE projects: New innovative products or existing products that have not been produced from the biobased feedstock before. The new value chains are proven in the PPP projects to be economically viable, and to fulfil all relevant sustainability criteria. Each of the value chains have elaborated business cases and plans for commercialisation (if not already scaled up to flagship projects - see objective 7)

3 || Objective || More than 200 cooperation projects through cross-industry clusters

KPI || General progress of BRIDGE || 31-12-'16 || 31-12-'18 || 31-12-'20

80 projects || 140 projects || 200 projects

How to analyze || Amount of cooperation projects started (value chain demonstrations and R&D)

4 || Objective || 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030

KPI || Amount of new biobased building blocks || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 2 || 5

How to analyze || New building blocks developed and demonstrated by BRIDGE projects. New biobased building blocks are chemical building blocks that are currently made from fossil sources and have not (successfully) been made from biomass on (pre)commercial scale before, or are new building blocks that could replace the current fossil based ones. The new building blocks are proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

5 || Objective || 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions)

KPI || Amount of new biobased materials || 31-12-'16 || 31-12-'18 || 31-12-'20

10 || 20 || 50

How to analyze || New biobased materials developed and demonstrated by BRIDGE projects. The biobased materials that replace current materials have proven to have an equal or overall better sustainability (by LCA, replacing fossil based, improved material efficiency, reduced GHG emission, biodegradability, recyclability or other improved effects during use or reuse). The biobased materials have proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

6 || Objective || 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials

KPI || Amount of new biobased ‘consumer’ products || 31-12-'16 || 31-12-'18 || 31-12-'20

5 || 15 || 30

How to analyze || New biobased products and applications developed and demonstrated by BRIDGE projects. The biobased products (materials, fuels, chemicals successfully converted into to 'consumer' products) will have an overall better sustainability than its current alternative (by LCA, replacing fossil based, improved material efficiency, reduced GHG emission, biodegradability, recyclability or other improved effects during use or reuse). The biobased products have proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

7 || Objective || At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

KPI || Bringing PPP results into practice || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 2 || 5

How to analyze || Amount of flagship projects started based on BRIDGE demonstration projects

Figure 5: Proposed approach to monitor BRIDGE

Monitoring of these key specific objectives and kpi's will be
performed according to the overall logic of figure 5.

3.3.        Call procedure

BRIDGE supports research and innovation
activities following open and competitive calls for proposals, independent
evaluation, and the agreement for each selected project of a Grant Agreement
and a Consortium Agreement.

Submission and evaluation procedure

Applications to the Joint Undertaking for
financial support will be made following open competitive calls for proposals.
The evaluation, selection and award procedures will be described in details in
a specific document "Rules for submission of proposals, and the related
evaluation, selection and award procedures". Evaluation will be performed
on the basis of Excellence. The evaluation criteria (including weights and
thresholds) and sub-criteria together defining 'Excellence', and the
eligibility, selection and award criteria, for the different funding schemes
will be based on Horizon2020 guidelines and described in a dedicated chapter in
each Annual Implementation Plan and call, titled "Evaluation criteria and
procedures".

Proposals will not be evaluated
anonymously. Ranked lists of proposals will be established for each main area.
Proposals from different topics, within the same area, with equal overall
scores will be prioritized according to the overall Joint Undertaking Annual
Implementation Plan coverage. Proposals for the same topic with equal overall
scores will be prioritised according to their scores for the S/T Quality
criterion. If they are still equal, they will be prioritised according to their
scores for the Impact criterion. A reserve list will be constituted if there is
a sufficient number of good quality proposals, which will be taken into
consideration if budget becomes available.

Consortium Agreement

The legal entities wishing to participate
in a project shall form a consortium and appoint one of its members to act as
its coordinator. As a general rule, the coordinator of a demonstration project
should come from the Industry Grouping (members of the Biobased Industry Consortium
- BIC) or become member of BIC (before project application). For R&D and
Supporting Projects the coordinator can be an Associate member to the BIC (e.g.
RTO, university, industry association, …), however supported and steered by one
or more members of BIC that together defined and support the specific call
topic, based on the value chain project under development. Any exception to
this rule will have to be justified. The IPR rules of BRIDGE will be described
in a separate document.

Grant Agreement and forms of grants

The Consortium Agreement (between the
partners) has to be agreed and signed before the signature of the Grant
Agreement (between consortium and BRIDGE).

BRIDGE financial contribution will be given
as a grant to the beneficiaries. The contribution will depend on the funding
scheme, activity, nature of the beneficiary and type of cost. The reimbursement
rules will be specified in detail in the call for proposals.

The Grant Agreement
will:

–
Govern the relationship between the consortium
and BRIDGE,

–
Provide appropriate provisions for the
implementation of the RTD activities and support actions,

–
Ensure that appropriate financial arrangements
and rules are in place relating to the intellectual property rights policy (to
be further detailed in the Consortium Agreement) and,

–
projects shall be supported by a financial
contribution from BRIDGE and through in-kind and/or cash contributions from the
legal entities participating in the activities.

Requirements for participation

Participation in projects shall be open to
all legal entities and international organisations once the minimum conditions
have been satisfied. The minimum conditions for projects funded by BRIDGE are
(cfr. Horizon 2020 rules):

–
at least three legal entities must participate,
each of which must be established in a Member State or Associated country;

–
The partners should come from at least 3
different Member States

–
All three legal entities must be independent of
each other as defined in Chapter 1, Article 7 of the Rules of Participation of
Horizon 2020;

BRIDGE will ensure that innovative SMEs
will be an integral part of the PPP execution by having a visible and easy
accessible SME portal, easy access to market information and financing
instruments dedicated to SME. Furthermore, it is envisaged that a significant
number of PPP funded projects will include a minimum of SME involvement,
including special SME-calls for technology development.

Details on the calls procedure of BRIDGE
(programming and implementation) are described in a separate document.

[1]               A defined in the BIC statutes, its Internal Rules and
the Biobased Industries PPP Governance document.

[2]               European Committee for Standardization (Comité Européen de Normalisation)

4.           Stakeholder involvement

A group of 40 leading companies and clusters from
current and future biobased sectors, across Europe, together developed this
underlying Strategic Innovation and Research Agenda. The cooperation and
exchange across a broad range of sectors such as chemical, pulp and paper,
agro-food, biofuel and energy companies and well as technology providers (e.g.
biotechnology) is exceptional and promises to be extremely fruitful and holds
great potential. Partners cover all the key phases of a general biobased value
chain, as well as nearly all countries in the EU. SMEs are well involved and
integrated in the PPP partnership. Research organisations and academics are
joining and supporting the research and demonstration priorities.

4.1.        Industrial partners in
BRIDGE

4.1.1.     The Industry Grouping

Currently 41 industrial partners (large enterprises, SMEs and
clusters) contribute financially and in-kind to the founding of the PPP (see
figure 6). The industrial partners have grouped themselves into a legal entity
(BIC AISBL), with a General Assembly and a balanced representation of the
relevant industrial sectors.

Figure
6: The BIC industrial members (large enterprises, SME, clusters)

The industrial partners are supported and
advised by their European Associations (figure 7).

Figure 7: European Associations
contributing to BRIDGE

4.1.2.     SME
participation

A substantial part of the transition to a biobased
economy will be initiated and/or developed by innovative starters and SMEs.
These SMEs are essential in offering and developing specific services,
technologies, equipment and instruments, both in enhancing developments at large
enterprises as well as in stand-alone projects or local cooperation. In
addition, innovative SMEs capture the potential of new technologies extremely
fast, thus pushing the bioeconomy as a whole. This PPP will develop supportive
measures for SME concerning critical issues such as financing, market
information and forecasts, legal obstacles and international partnering.

SME representation will take place through the different
clusters participating in BRIDGE, but also through individual membership of BIC.
Already among the current partner consortium, SMEs are already well involved,
either directly or via clusters.

Direct SME partners

Currently 5 SMEs are direct members in BIC:

–
IUCT (a high-tech
company for industrial technological innovation aimed at developing,
implementing and promoting new technologies in the chemical, pharmaceutical,
and environmental fields)

–
CLEA Technologies
(core competencies in the development of green, sustainable biocatalytic
processes and a proprietary technology for enzyme immobilization as
Cross-Linked Enzyme Aggregates (CLEAs). 16-20 employees

–
Biobase Europe Pilot Plant (open innovation pilot and demo facilities for the biobased
economy)

–
Direvo – Engineering Biomass (develops and implements biology-based solutions for partners and
customers in the fast growing biomass conversion market)

–
Biorefinery Process Facilities (open innovation pilot and demo facilities for the biobased
economy)

SMEs in Clusters

Many SMEs are currently involved via four cluster-members
in BIC: IAR, GFP, DBC and CLIB2021.

GFP – German Federation of Private Plant Breeders

A cluster of 60 German plant breeders of which 2/3 is SME

IAR
("Industries et Agro-ressources") cluster, France

90 SMEs represented and, in particular, the companies:

–
Deinove (microbiological technologies for
lignocellulose conversion into biofuels and chemicals)

–
YNSECT (novel molecules from biomass using
insects)

–
CIMV (novel organosolv technology for
lignocellulosic feedstock fractionation )

–
Omega Cat System (novel catalysts and solutions
in the field of olefin metathesis).

–
Maguin (novel extraction process using
pulsed electric fields)

–
Alderys (disruptive synthesis for the production
of chemical compounds by micro-organisms)

Dutch Biorefinery Cluster (DBC)\_

–
Via the association of Dutch paper and board
mills: 2 SME specialty paper mills

·
Coldenhove Papier

·
Meerssen Papier

–
Via the Product Board Arable Products

·
Several SMEs converting arable biomass to food
and materials

–
Via the Product Board Horticultural Products

·
Several SMEs converting arable biomass to food
and materials

Biobased Innovations

–
Involvement of SMEs is arranged on project bases.
Two projects active (biobased innovations & biofunctionals). Active SMEs

·
5 SMEs in biobased innovations (advisory,
fermentation, agrofood, biobased cleaning)

·
13 SMEs in biofunctionals (biogas, textile,
advisory, agrofood, biomaterials, technology, packaging, filtration, paper, 1
torrefaction)

CLIB2021 Cluster Industrial Biotechnology, Germany

26 PPP-relevant SME members from Germany, EU27 and other countries
represented, in particular 5 companies.

–
SME are active in a variety of biotech sectors
(see figure 8):

·
Technology development/services (enzyme/strain
development and optimisation, bioproducts, fermentation/reaction technology,
purification, downstream processing, process optimisation, pilot plant/pilot
services, biofuels, analytics)

·
Biomass processing

·
Biomaterials

·
Policy/market analysis

Figure
8: SMEs in CLIB2021

BRIDGE will have a
clear direct impact on SMEs’ competitiveness. European SMEs offer a wide range
of biobased products, processes and technologies in different stages of
development. For example, in Spain it is estimated that 95 bioprocesses, 91
bioproducts (49 of which are advanced biofuels) and 53 biobased technologies
are currently being developed by biobased companies, most of which are SMEs[1]. However most
of the SMEs do not have a product or a process ready for demonstration and
still require substantial research work to be carried out.

Figure
9: Positioning of SMEs along the innovation chain

The Biobased Industries PPP
will contribute to bringing these products and processes led by SMEs to the
market, which will significantly contribute to fulfilling the 2030 objectives
associated with the PPP’s ambitions. SMEs can also
provide valuable support to large industrial players with technical assistance
and support, often in tight cooperation with RTOs. They are experts in high
technological solutions and are technology developers. Bioreactor design,
process optimization, new biocatalyst for biomass processing, are some examples
of areas where SMEs are deeply involved. These technologies and expertise could
be instrumental for the implementation and deployment of demonstration
projects.

Figure
10: Potential contribution of SMEs along the innovation chain

The industrial interest of this type of SME will be to
develop a new product, process or services to be licensed or used by larger
players in traditional and new value chains. BRIDGE, with a strong presence of
SMEs, will become a platform for the most effective exploitation of the
available resources to have new technologies going to the market. This will
result in a greater number of new innovative products on the market.

BRIDGE will ensure that innovative
SME will be an integral part of the PPP execution by having a visible and easy
accessible SME portal, easy access to market information and financing
instruments dedicated to SME. Furthermore, it is envisaged that a significant
number of PPP funded projects will include a minimum of SME involvement,
including special SME-calls for technology development.

4.1.3.     Biomass production

Sustainable biomass supply is an essential part of biomass value
chains. This includes the increased production and mobilisation of existing
biomass (forestry and agriculture), as well as the development of new dedicated
crops. PPP partners investing in this part of the value chain are:

Plant breeders

–
Federation of German Private Plant Breeders (60
plant breeders)

–
Via Dutch Biorefinery Cluster

·
Productboard Arable farming

·
Productboard Horticulture

Fertilizer companies

–
Fertiberia

Farmers / Farmers associations / Farmers cooperatives

–
Nordzucker (16,000 beet growers as biomass
suppliers, all shareholders are farmers)

–
Südzucker (56% share holders are farmers – beet
growers cooperative)

–
Via Dutch Biorefinery Cluster

·
FrieslandCampina (cooperative of dairy farmers)

·
Cosun (cooperative of beet growers)

·
Avebe (cooperative of potato growers)

·
Productboard Arable farming

·
Productboard Horticulture

–
Via IAR:

·
Tereos (cooperative, 12 000 farmers as
shareholders)

·
Sofiproteol (leading player in the French
vegetable oil and protein industry with agricultural shareholders)

–
Via ARD:

·
Cristal Union, 9500 farmers involved as
cooperators

·
Vivescia, the main cooperation of Siclae, has
12.000 farmers also cooperators.

Forest cooperatives

–
Holmen: 60% of their wood consumption is from
own forest: 1Mha

–
Metsä Group (Metsäliitto Osuuskunta):
cooperative of 125.000 Finnish forest owners

–
SCA: Europe largest private forest owner – 50%
of own wood consumption: 2.5 Mha

–
Södra (cooperative) has a total of 36,000 forest
properties and 51,000 people as members

–
UPM: own forests in EU area 0,9 Mha – 16 % of
annual wood consumption originate from own forests and plantations

4.1.4.     Participation across Europe

The current PPP members cover whole Europe with their businesses.
Except for Malta, production and conversion activities are in all EU member
states. Especially in terms of contributing to an EU wide supply of sustainable
biomass, the potential of the EU12 is substantial. Agricultural and forestry
production levels are relatively low and leave significant room for progress.
The Bloomberg New Energy Finance study estimates the potential of agricultural
& forestry residues & municipal waste across the EU27 and concluded
that 25.4 % of the total EU potential is located in the EU12, with Poland ranking
in 5th position overall in the EU. For reasons of efficiency, biorefineries
need to be close to the biomass sources.

The EU12 could not only benefit from being purely biomass suppliers,
thus creating additional income opportunities for farmers and foresters, but
even more so in terms of establishing the required industrial
conversion/biorefinery capacities. This approach would allow addressing
difficulties of the EU12 to identify a sufficient number of economically viable
projects that can "absorb" the resources available to them in rural
development funds. The concept of "Smart Specialisation" in this
regard would allow EU12 Member States to build on their individual strengths,
e.g. in terms of agriculture and forestry and in terms of fermentation know-how,
giving priority to related investments in R&D&I. DG REGIO in
cooperation with DG RTD and other services is currently preparing a
"Practical Guide for Managing Authorities", assisting managing
authorities (MAs) in integrating green growth into the regional research and
innovation strategies for smart specialisation, thus making optimal use of the
EU Structural Funds to address issues of sustainable energy, eco-innovation and
eco-system and nature protection.

Independent from or as a follow-up to BRIDGE, the development of a
network of biorefineries in EU12 Member States can provide an excellent
opportunity to leverage the necessary structural funds under the EU Cohesion
Policy, creating new sources of employment and economic growth.

In addition, PPP information and brokerage events will need to be
organised in cooperation with the industry, specifically focusing on the EU12.

Therefore, BRIDGE will also stimulate demonstration activities at
the production locations in EU-12 countries. Below an overview is given from
the production facilities of the current BIC members:

·
Billerud: Lithuania

·
Borregaard: Czech Republic

·
Cargill: Poland

·
Clariant: Czech Republic, Poland

·
Holmen: Estonia

·
Metsä Group: Poland, Slovak Republic, Estonia

·
Mondi: Slovakia (2x), Czech Republic (5x), Bulgaria
(1x), Poland (11x), Hungary (3x)

·
Nordzucker: Lithuania, Poland, Slovak Republic, Czech Republic

·
Roquette: Bulgaria, Estonia, Romania

·
SCA: Poland, Slovak Republic

·
Smurfit Kappa: Poland, Czech Republic, Slovakia,
Romania, Latvia, Lithuania

·
Stora Enso: Estonia, Hungary, Latvia, Lithuania and
Poland.

·
Südzucker: Poland, Hungary, Romania, Slovak Republic, Czech republic

·
Tereos (via IAR): 5 plants in Czech Republic.

·
Siclae
(via ARD), via its subsidiaries: Hungary, Romania and Poland

·
Sofiproteol (via IAR): Romania.

·
UPM: Poland, Estonia

·
Unilever: Czech Republic, Romania

In order to benefit from scientific and
technological expertise from institutes and academia from all over Europe, BRIDGE will cooperate with the relevant ERA NETs. Results of ERA NETs will be
incorporated and implemented in BRIDGE and the PPP will advise on their
research topics. Moreover, involved industrial partners in ERA NETs will be
stimulated to become partners in BRIDGE.

In the ERA-NET ERA-IB (industrial biotechnology)
partners and observers from 15 different countries joined forces to reduce
fragmentation of national research efforts, and to encourage academics and
industrial researchers to work together. The fact that member states such as Romania, Croatia and Poland are also participating, illustrates the growing interest of the
Eastern European countries. Some of the clusters in BRIDGE have strong ties to
academic institutions in EU-12 countries (e.g. CLIB2021 with Poland and the Slovak Republic).

4.1.5.     Participation research
organisations

Research organizations, consisting of
Research and Technology Organisations (RTO) and universities, play an important
role in the implementation of the European Framework Programme for Research
& Technology Development[2].
They also have an essential role in BRIDGE, through supporting the
demonstration activities by executing research and development required to
realize the vision of the Joint Undertaking. They furthermore contribute by
evaluating and disseminating the scientific achievements as described in the
annual activity reports and advise in setting the R&D agenda and Annual
Implementation Plans.

A large network consisting of over 200
representatives of research organizations from different European member states
expressed their interest in the SIRA (see Figure 11). In their combined
response to the prioritization of the SIRA research topics, it was shown that
the research organizations have a quite similar prioritization of the research
topics as the industrial partners.

Figure 11. Distribution of RTOs and universities
interested in the BioPPP over different European member states

4.1.6.     Regions

Many regions in Europe have already
developed a regional strategy for the biobased economy, and several have set up
local clusters and PPPs. Also the Committee of the Regions (CoR) recently
emphasized the important role of public-private partnerships (PPPs) in
accelerating the transition towards a bioeconomy[3]. More specifically, the CoR suggested that advanced regions in the
bioeconomy field should be supported in taking the steps required by bioeconomy
value chains and in connecting to other less advanced regions, and believes
that this approach leads to an effective use of resources, while fostering
cohesion.

Through the “Smart Specialisation Strategy”
the European Commission encourages national and regional authorities across Europe to draw up research and innovation strategies for smart specialisation, so that the
EU’s Structural Funds can be used more efficiently. Synergies between different
EU, national and regional policies, as well as public and private investments,
can be increased.

The Biobased Industries PPP is a key
enabler in this respect since several of the regional clusters participate.
BRIDGE will contribute to the creation of the “bridge” between Horizon 2020 and
Structural Funds since it will trigger the participation of the regions in
planning actions and measures well aligned with the intrinsic capabilities of
each local areas.

5.           The EU added value

In February 2012, the European Commission
has adopted a strategy and action plan “Innovating for Sustainable Growth: a
Bio-economy for Europe2” to shift the European economy towards greater and more
sustainable use of renewable resources. This bio-economy strategy is part of
the Europe 2020 flagship initiatives "Innovation Union" and "A
Resource Efficient Europe". The goal is a more innovative and
low-emissions economy, reconciling demands for sustainable agriculture and
fisheries, food security, and the sustainable use of renewable biological
resources for industrial purposes, while ensuring biodiversity and
environmental protection. This PPP is part of the implementation of this
strategy.

5.1.        Added value of action at
EU level and of public intervention using EU research funds

The multi-sectoral approach in the biobased PPP will combine the
strengths of industries, regions and EU countries enabling the transition from
oil & gas to a biobased sustainable economy. Neither single stakeholders
nor individual member states will reach the required critical mass on their
own, justifying the clear added value of tackling these ambitions on a EU27
scale. Highly forested countries and highly productive agricultural regions
will be linked to industrial centres in Europe to generate new value
propositions through the development of integrated value chains.

The EU approach has a distinct added value, complementing and
bringing together national approaches. The EU mandates on the Common
Agricultural Policy and the EU Horizon 2020 programme that combines knowledge
and expertise from member states with the technologies available in other
member states and the value chains in the different EU regions add up to a much
larger effort than single projects alone. BRIDGE projects will therefore, where
possible, be combined with national projects and structural and regional funds
to achieve a multiplier effect.

Another rationale for an EU-led PPP is evident: most of the
barriers/challenges to kick-start a biobased economy – from sustainable biomass
supply to market pull via targets, product standardisation and green public
procurement schemes – are not adequately addressed at national level but rest
firmly on Community-level regulation, i.e. the Common Agricultural Policy, environmental
regulations and the single market. In this context, BRIDGE will report on
policy feedback on several cross-sectoral policies of relevance for the
industry (from supply to market pull measures).

A clear EU added value for the Biobased Industries PPP is its key
enabling role for implementing the European Commission's strategy and action
plan, "Innovating for Sustainable Growth: a Bioeconomy for Europe”. It
will also contribute to the implementation of several European policies and
existing EU actions, deliverables and recommendations (i.e. the Lead Market
Initiatives for Bio Based Products) which will help to increase coherence of
market pull measures for biobased products across member states: green public
procurement, standardisation, mandates, tax incentives for sustainable biobased
product categories, setting indicative or binding targets for certain biobased
product categories where they contribute to achieving the objectives of
existing and future EU sustainability policies. The creation of a permanent
policy desk within the initiative will also contribute to an improved and more
informed dialogue between public and private biobased economy stakeholders.

Tackling these challenges in a cooperation between industry and the
European Commission within the framework BRIDGE is justified by:

–
the research needed which is so complex that no single company or public research institution can perform
it alone,

–
the absence of an agreed long-term budget
plan and strategic technical and market objectives to encourage industry
and the research community to commit more of their own resources will slow down
the pace of innovation,

–
the sub-optimal allocation of funds leaving gaps
and overlaps in a fragmented research coverage, when member states do not
align their funding,

–
an insufficient volume of funds for an
integrated and continuous programme covering fundamental research, applied
research and EU-level demonstration and flagship activities,

–
the fact that the value chains are dispersed
across different countries and sectors which restricts the exchange and
pooling of knowledge and experience.

This summarizes the clear European added value in having BRIDGE
as a EU wide long term research and demonstration programme to allow large
industrial companies and SMEs, including those in the new Member States, to
collaborate between themselves and with European RTOs, universities, national
governmental organisations and NGOs, working towards shared short, medium and
long-term objectives across value chains.

5.2.        Additionality
to existing activities

This SIRA aims at providing research and innovation priorities for
the period 2014-2020 with the ultimate goal of accelerating the pace of
innovation towards a sustainable biobased economy.

In this framework, there are three components of additionality:

–
Input Additionality: collaborative Research and Innovation activities around an
industry-led programme in close dialogue with different EC services could not
be launched without public support, at first due to the current economic and
financial challenge, but also because of the specific nature of the sectors
involved and their complex value chains.

–
Process Additionality: the innovation process is managed and implemented in a more
efficient way due to the value chain approach, well aligned with the Horizon
2020 objectives.

–
Output Additionality: the partners have drawn pathways to meet the 2030 vision, whatever
economic scenarios may be faced by investors. This means a European roadmap
towards demonstration and flagship projects and the tests of various business
models and associated value propositions. It brings direct benefits to the
participants and to the represented sectors and industries, showing that the
barriers towards a sustainable biobased economy are not insurmountable.

Synergy, optimal alignment, cooperation and exchange
with all main running initiatives in EU, is required to facilitate practical
realisation. We will actively work with, for example, the following EU
initiatives to deliver the objectives described in this document:

–
European Innovation Partnerships (EIPs) aim to address weaknesses in the European research and
innovation system, which might prevent the entry of innovations into the
market. They provide a working interface between practice, science, policy makers,
advisors, and other stakeholders at EU, national and regional level. Three
candidate EIPs are of relevance to the biobased PPP: Agricultural Productivity
and Sustainability, Raw Materials and Water Efficiency.

–
EIBI (European Industrial Bioenergy Initiative) supports the demonstration of reference plants for innovative
bioenergy value chains which are not yet commercially available (excluding
existing biofuels and heat & power technologies) and which could be
deployed on a large scale. The biobased PPP will develop competitive
biorefineries optimising the creation of economic, social and environmental
values, including energy conversion from waste streams, thus contributing
important developments to the EIBI. In turn, the EIBI’s demonstration of successful
bioenergy value chains could be valuable for the integrated biorefineries which
are the goal of the Biobased PPP.

–
EERA (European Energy Research Alliance) is a co-operation between the major European RTOs
advising the EC on necessary bioenergy-related fundamental and applied research
to achieve the policy goals defined in the SET-Plan

–
The PPPs running under the Recovery Plan,
in particular Factories of the Future PPP increases the technological
base of European manufacturing through the development and integration of
enabling technologies. Synergies with the biobased PPP are related to
sustainable manufacturing tools, methodologies and processes for
cost-efficiently shaping, handling and assembling products composed of complex
and novel materials. The Green Cars PPP develops sustainable transport
methods, including research on greening combustion engines, biomethane use,
logistics and transport systems. Synergies with the biobased PPP lie in the
realisation of value chains providing sustainable advanced biofuels for
transport. The Energy-efficient Buildings (EeB) PPP aims at promoting
green technologies and the development of energy-efficient systems and
materials in new and renovated buildings aiming to reduce their energy
consumption and CO2 emissions. The biobased PPP develops value chains which
could deliver sustainable biobased building materials to support the EeB PPP
objectives.

–
The SPIRE PPP, also developed under
Horizon 2020, aims to better understand and
develop the role of the process industry in resource & energy efficiency.
The biobased PPP supports the SPIRE PPP and its stakeholders by developing
sustainable value chains, bringing together the critical stakeholders to ensure
an infrastructure from field to the output from biorefineries. The SPIRE PPP
strengthens the biobased PPP and its stakeholders by developing energy and
resource efficient processes (both fossil and biobased) and prepares the
current process and manufacturing industry for feeding in biobased building
processes and blocks. Biobased Industries PPP, together with the Bio PPP, has
identified docking points between the two PPPs to ensure mutual support and
complementarity.

An overview of complementarities and synergies is
provided in the following picture.

Figure 12:
Complementarity and synergy of biobased PPP with main EU initiatives

The intended biobased PPP is fully
complementary and synergetic to the Lead market initiatives and its
recommendations, aiming at:

–
Continuing to stimulate and enhance
technological innovation and the development and application of technology.

–
Increasing public funding for demonstration
projects via public-private partnerships.

–
Increasing public funding for demonstration
projects and stimulating the construction of demonstrators via Public-Private
Partnerships.

–
Setting up a specific “EU Innovation Fund” which
could also serve to aid the transition of the results to full-scale
implementation and to the marketplace.

–
Developing incentives for the conversion of
production plants and industrial processes into biobased ones, provided that
they have proven to be sustainable and that applicable EU State Aid rules are
respected.

–
Developing incentives (taxation or state aid
measures, grants) to support the development of new, sustainable biobased
products’ production processes.

Ultimately, this SIRA builds heavily on the findings of the previous
CSA projects BECOTEPS[4]
and Star-COLIBRI[5].
In particular the industrial stakeholders have further elaborated their
findings and aligned them with the overall vision towards 2030, based on the
integrated value chain approach.

6.           Financials

Budget

It is estimated that, to realise this Strategic Research and
Innovation Agenda, a total budget of €3.8 billion is needed (see Figure 13).
The founding partners together intend to invest above €2.8 billion in research
and innovation efforts between 2014 and 2020, if the right framework conditions
can be developed. This means that an additional € 1 billion funding from the
Horizon 2020 budget of the European Commission will be needed to implement this
proposed agenda.

The prioritisation in this research and innovation agenda, as well
as the budget, is based on the ambitions of the BIC members in March 2013. A
regular review will be performed on both the topics and budget distribution,
based on obtained results and updated ambitions of the industrial partners (at
least every 2 years).

Biomass supply

Many partners representing the 'biorefinery-sector' as well as the
'bio-products and bio-fuels' part of the chain recognize that the 'biomass
supply' is an important area to invest more resources in. This stresses the
importance for either increasing the involvement of partners active in the
biomass supply chain, or stimulating research, development and demonstration
via other funds.

Enable to realise the objectives on increasing the biomass supply, BRIDGE
will actively cooperate with the EIP Agricultural Productivity and
Sustainability to align on the relevant R&D and demonstration topics. Only
by a strong cooperation with the agricultural and forestry sectors, a
sustainable and secure supply
of biomass for the production of biochemicals, bio-based materials can be
secured, in harmony with food and feed applications.

Other funding for demonstration and flagship projects

Demonstration and flagship activities are a key output of BRIDGE.
This is an area where significant public co-investments will be deployed
jointly with large investments by industry to firstly implement their
technologies on the market. Demonstration and flagship activities in BRIDGE include
both smaller demonstrators (TRL 4-6) and bigger demonstrators (TRL 7-8) - see
Table 3, the latter however not being fully eligible under Horizon2020. Thus,
these developments require a close synergy between research and innovation
grants available through H2020 on one side and cohesion and structural funds as
well as debt facilities and risk finance instruments by EIB on the other side.
The involvement of the EIB can act as a catalyst, encouraging other banks,
financial institutions and the private sector to participate in an investment.
Eventually EIB loans can be combined with EU grants depending on the scope and
definition of the individual project fully in line with the overall ambition of
the Innovation Union and H2020.

Structural Funds may complement local financial needs in terms of
deployment of technologies, processes and products. Within the structural funds
there are also regional development funds (cohesion funds for regional
development); they will be addressed for instance for improved logistics,
roads, required education, help SMEs to start-up. Within the integrated
approach targeted by BRIDGE also the second pillar of the CAP is considered,
which provides funds for rural development, in particular to help farmers to
place investments that benefit the rural development. These should also be
addressed for biobased economy related themes, for instance machinery to
mobilise the residues, improve storage at the farms, etc.

Details on the finances and funding rules
within BRIDGE are described in a separate document.

[1]               Data collected from the Industrial Biotechnology of
ASEBIO, ASEBIO report 2011

[2]               Research and Technology Organisations in the Evolving
European Research Area – A status report with Policy Recommendations by EARTO

[3]               Conference 'Partnering for the Bioeconomy in
European Regions', 12 October 2012, Brussels

[4]               http:// www.becoteps.org

[5]               http://www.star-colibri.eu

Annex 4 – report on the European Commission's on-line
public consultation

“Bio-based industries, towards a
public-private partnership under Horizon 2020?”

Draft submitted by

Dr. Felice Addeo

for revision by Commission Services

Contents

1.     Introduction. 4

2.     Results. 8

2.1.       Respondents’
profile. 8

2.1.1.    Respondents
answering as individuals. 10

2.1.2.    Respondents
answering on behalf of an organization or an institution. 11

2.1.3.    The whole
sample. 13

3.     Identification of the problems. 15

3.1.       Overall views
on the competitiveness of the European bio-based Industries. 15

3.2.       The European
bio-based Industries: strengths and weaknesses. 21

4.     European Added Value. 31

4.1.       The importance
of EU level intervention. 31

4.2.       Added value of
EU level intervention. 36

5.     Objectives of EU level intervention. 40

6.     Towards a PPP?. 44

7.     Impacts. 45

1.     Examples of flagship biorefinery plants from the SIRA (see Annex 3) 69

2.     EU annual economic potential for advanced bioethanol through
replication of a successful bio-ethanol flagship plant. 69

3.     Social impact of competitiveness in the bio-based segment of the
chemical industry  69

1.           Introduction

Implementing
Horizon 2020 in relation to bio-based industries

Bio-based
industries, at the heart of the bio-economy

Europe is committed to excel in smart, inclusive and sustainable growth.
In this context, the Europe 2020 strategy highlights the building of a bioeconomy
by 2020 as one of the deliverables under its flagship initiative
"Innovation Union". The Commission has recently presented the
communication "Innovating for sustainable growth: A bioeconomy for Europe" (COM
(2012) 60 final).

The on-line
public consultation conducted in connection with the preparation of the
bioeconomy communication found that a large majority (>85%) of respondents
saw significant advantages in developing a European strategy on a sustainable
bio-based economy as follows:

·
Supporting bio-based markets and the creation of
economic growth and highly-skilled jobs (88.3%)

·
Fostering the move towards a zero waste society
(90.4 %)

·
Securing a sufficient supply of food and biomass
(88.3 %)

·
Integrated, sustainable agricultural, aquatic
and ecosystem services (89.9 %)

·
Strengthening the research and innovation base
(85.7 %)

The
above-mentioned communication also sets out a comprehensive bioeconomy action
plan. The plan includes the establishment of a public-private partnership
on research and innovation for bio-based industries as a means to
promote the development of integrated and diversified biorefineries, including
their biomass supply chains. Consequently, the aim of a public-private
partnership has been proposed in Horizon 2020, the future EU framework program
for research and innovation.

Europe needs to champion the use of sustainable bio-based resources as a
major source of raw material for conversion into innovative industrial products
and fuels/energy. This must be achieved without creating shortages in food and
feed supply and in full respect of the environment. Several studies (e.g. by
the European Environment Agency[1])
demonstrate the potential to mobilise, in a sustainable manner, large volumes
of non-food biomass in the EU as feedstock to support the growth of the
bio-based industries. Europe's bio-based industries need to be
technologically prepared and equipped to successfully address this challenge,
along with all other participants in the value chain (e.g. farmers, foresters,
waste managers).

An important
goal is to expand the range and the volume of innovative products manufactured
by the bio-based industries (including e.g. bio-based plastics, chemical
building blocks, high-value ingredients for pharmaceuticals or cosmetics,
advanced biofuels) from renewable biological resources (e.g. specialty crops,
residues from agriculture, forestry, fisheries and the utilisation of
biowaste). This will require the development of new types of biorefineries and
the associated value chains as well as innovation within established bio-based
industries with a long tradition of processing renewable biological resources
(e.g. the pulp and paper industry, the starch and the food industry). The pulp
and paper and the starch industries have the potential to play a significant
role in the innovation cycle leading to the successful development of an
effective integrated biorefinery infrastructure in Europe. Furthermore, the
chemical industry can play an important role by expanding its use of bio-based
resources. The biotechnology industry will deliver key components for
innovative new processes.

The development
of bio-based industries, if successful, can bring a lot of rewards that
concern many stakeholders: consumers who get access to new sustainable products
based on renewable biological resources, bio-based industries that take
technological and sustainability leadership and thereby build long-term
competitive advantages; enhanced economic growth and new jobs in rural, coastal
and industrial areas; new revenue streams for EU27 agriculture and forestry.

Horizon 2020,
aims to build technological and sustainability leadership as a lever for
industrial competitiveness on a global scale. In addition to delivering
excellence in research and technology development, the aim is to deliver real
innovation and to promote its deployment on a large scale.

Under FP7, the
EU's currently on-going seventh Framework Programme for Research, certain
sectors pioneered the use of public-private partnerships (PPP), as a
novel means to manage and implement EU Research Programmes. In the context of a
PPP, both private and public sector contribute resources to support research
and innovation activities, based on multi-annual research agendas. Examples of
PPPs operating under FP7 include: European Green Cars Initiative, Factories of
the Future, Innovative Medicines Initiative, Clean Sky, Fuel Cells and Hydrogen.
The continued use of public-private partnerships is explicitly provided for
under Horizon 2020.

A large group
of stakeholders from the bio-based industries has shown strong interest in the
creation of a new PPP in the area of bio-based industries and has expressed a
commitment to contribute to its activities. The Commission is considering
supporting a PPP in the area of bio-based industries, addressing specific parts
of Horizon 2020: "Sustainable and competitive bio-based industries"
and "Alternative fuels and mobile energy sources".

On the basis of these considerations, the
“Bio-based industries, towards a public-private partnership under Horizon
2020?” consultation was launched to collect the opinions of stakeholders active
in the field and of public at large on the state of play of the European
bio-based industries, focusing on the aspects related to research and
innovation.

The consultation specifically aimed at
seeking respondents’ views about the role of the public-private partnership in
implementing research and innovation activities under Horizon 2020.

The research design of the public
consultation is made up of six general dimensions (as shown in the concept map,
fig. 1):

–
Respondents’ profile: information about respondents according to their type of
participation to the consultation (individuals or on behalf of an organization
or institution), such as occupation, organization sector, professional field,
residence, workplace;

–
Identification of the problems: this section addresses the respondents’ perception about: the
competitiveness of the European bio-based Economy; the strengths and weaknesses
of the European bio-based industries; the innovation capacity of the bio-based
industries;

–
European Added Value: views about the Added value of European level intervention in
facing the problems of the bio-based industries, in comparison with other
levels ( regional, national);

–
Objectives of EU level intervention: what are the goals that should be addressed assuming EU level
action on Research and Innovation in connection with bio-based industries;

–
Towards a PPP?:
considerations about the implementation of research and innovation
activities in the bio-based industries area under Horizon 2020 through a PPP;

–
Impacts: this section deals with the perceived potential impact of EU
Research and innovation actions on bio-based industries if these actions are
applied under a PPP framework;

The instrument used for the public
consultation was a questionnaire (designed with assistance of the
"Inter-service Steering Group (ISG) on Article 187 initiatives"). The
on-line version of the questionnaire was prepared using the internet-based
software package IPM (Interactive Policy Making), an Internet-based software
package aiming at the creation, launch and analysis of replies of online
questionnaires. The questionnaire was accompanied by the Specific Privacy
Statement and a statement for the protection of personal data.

The questionnaire was articulated in six
sections, resembling the research dimensions shown before. Each research
dimension was measured using a single question or, more often, a set of items.

The public consultation was open for
contributions between 21/09/2012 and 14/12/2012.

Awareness about the opening of this
consultation was raised through a number of sources, including:

–
the DGs involved in the Interservice Group;

–
Programme Committee;

–
FP7 Advisory group and National Contact Points;

–
European Bioplastics Association;

–
ERRMA (European Renewable Resources and
Materials Associations);

–
European Technology Platform for Sustainable
Chemistry;

–
Forest-based sector Technology Platform;

–
Plants for the Future Technology Platform;

–
EuropaBio;

–
CEFIC (European Chemical Industry Council);

–
CEPI (Confederation of European Paper
Industries);

–
FoodDrinkEurope;

–
COPA COGECA (European Farmers and European
Agricultural Cooperatives Association);

–
ESA (European Seed Association).

All contributions collected through the
on-line questionnaire were analyzed and used to generate the tables and the
graphs found in this report.

fig. 1 - Concept map of public
consultation

2.           Results

The online public consultation was open
from 21/09/2012 to 14/12/2012.

During the consultation period 682 answers
were collected. Data quality control and data cleaning procedures were applied
to the dataset.

Nine (9) participants were removed because
they answered two times to the public consultation (they were identified
because they provided the same contact details); moreover, 35 people were
removed from the final dataset because they did not agree to provide their name
and contact details. During the analysis of the replies it was noted that 61
respondents from one single Member State were absolutely identical, apart from
the contact details. These responses, representing 9.5% of the total, were
further analysed to establish whether they overall influenced the outcome of
the analysis and to what extent. It was concluded that the overall outcome of
the consultation was not affected by the 61 respondents and for that reason it
was decided to fully include them in this report.

The final sample is composed of 638
respondents.

2.1.        Respondents’ profile

This paragraph illustrates the profile of
the participants to the public consultation. As shown in Fig. 2, the number of
respondents who answered as “individuals” (53.1%) was slightly higher than that
who answered “on behalf of an organization or an institution” (46.9%).

fig.2 - Are you answering
as an individual or on behalf of an organization or an institution? (%; n=638)

Poland was the most represented country in this
consultation, followed by Netherlands, Germany, Spain, France, Belgium, Sweden, Finland, Italy and Austria. Generally speaking, almost all EU Member States
are represented; there were also some respondents from associated and non
EU-countries (Norway, Switzerland, Bosnia and Herzegovina, Serbia, United States, and so on).

tab. 1 - Geographical contributions
(frequency; n=638)

|| Frequency

Poland || 143

Netherlands || 94

Germany || 82

Spain || 58

France || 54

Belgium || 47

Sweden || 30

Finland || 24

Italy || 22

Austria || 21

Norway || 9

United Kingdom || 9

Czech Republic || 6

Portugal || 5

Romania || 5

Denmark || 4

Switzerland || 4

Bosnia and Herzegovina || 3

Ireland || 3

Hungary || 2

Serbia || 2

United States || 2

Brazil || 1

China (People's Republic of) || 1

Greece || 1

Israel || 1

Moldova (Republic of) || 1

Peru || 1

Singapore || 1

Slovakia || 1

Turkey || 1

Total || 638

The previous table is
summed up in the next figure that shows the distribution of the respondents
according to their origin: 71.2% of participants originated from the EU15
(Member States of the European Union prior to 1 May 2004), 24.6% originated
from the EU12 (those MS joining the EU on/after 01 May 2004), 4.2% originated
from countries outside the EU.

fig. 3 - Geographical contributions
grouped according to EU aggregation (%; n=638)

2.1.1.     Respondents answering as
individuals

The number of respondents answering as “individuals” was 339 (53.1% of the
total sample); the majority of them working as a researcher in a research
organization or in academia (30.1%) or for a private company (other than an
SME; 25.4%).

Also a significant
number of farmer/forester (19.2%) and SME employees (13.0%) participated in the
consultation.

tab.
2 - If you are responding as an individual (frequency; %; n=339):

|| frequency || %

I work as a researcher in a research organization or in academia || 102 || 30,1

I work for a private company (other than an SME) || 86 || 25,4

I am a farmer / forester || 65 || 19,2

I work for an SME || 44 || 13,0

I am self-employed (but not as a farmer / forester) || 11 || 3,2

I work for a public authority (national level) || 11 || 3,2

I work for a public authority (local/regional level) || 8 || 2,4

I work for a non-governmental organisation (other than a consumer organisation) || 3 || ,9

I work for an international organisation (e.g. UN, OECD) || 2 || ,5

|| ||

Other || 7 || 2,1

Total || 339 || 100,0

As regards professional fields, respondents
were allowed to give up to two choices, which explains why the number of
responses exceeded the number of respondents (tab. 3).

tab.
3 - Main professional field of respondents’ answering as individuals (multiresponse)

|| frequency || % responses

Agriculture || 115 || 26,6

Food and feed || 60 || 13,9

Industrial biotechnology || 60 || 13,9

Chemicals || 42 || 9,7

Energy and bio-fuels || 40 || 9,3

Forestry || 27 || 6,3

Environment || 25 || 5,8

Transport || 8 || 1,9

Health || 8 || 1,9

Socio-economics || 5 || 1,2

Nanotechnology || 4 || ,7

Fisheries and aquaculture || 0 || ,0

|| ||

Other || 27 || 6,3

Other (non-pharmaceutical) biotechnologies || 11 || 2,5

Total (n= 339; responses = 432) || 432 || 100,0

The relative majority of respondents was
engaged in the agricultural field (26.6%). Other professional fields mainly
represented were: Food and feed (13.9%), Industrial biotechnology (13.9%),
Chemicals (9.7%), Energy and bio-fuels (9.3%). No individual respondent from the Fisheries and Aquaculture field responded.

2.1.2.     Respondents answering on
behalf of an organization or an institution

Participants answering on behalf of
organization or an institution mainly represented the private sector: 48.2%
represented a small or medium-sized enterprise (SME, 22.4%), a multinational or
a trans-European private company (18.1%) or a national private company (7.7%).
Other respondents represented the academic sector (18.1%), public
authorities/public administrations (10.0%) and industry associations or
chambers of commerce (9.7%).

tab. 4 - If you are
responding on behalf of organization or an institution (frequency; %; n=299):

|| frequency || %

I represent a Small or Medium Enterprise (SME) || 67 || 22,4

I represent a multinational or a trans-European private company || 54 || 18,1

I represent an academic/research organisation or association of academic/research organisations || 54 || 18,1

I represent a public authority/public administration || 30 || 10,0

I represent an industry association or a chamber of commerce (national/regional/local) || 29 || 9,7

I represent a national private company (excluding SME) || 23 || 7,7

I represent an association of farmers or other primary producers (national/regional/local) || 16 || 5,4

I represent a non-governmental organisation/associations of NGOs (excluding consumer association) || 9 || 3,0

Other || 17 || 5,6

Total || 299 || 100,0

Participants replying on behalf of an organization mainly represented
the Industrial biotechnology field (17.9%), and fields
like Agriculture (14.4%), Food and feed (12.7%), Energy and bio-fuels (12.2%),
and Chemicals (11.2%).

tab. 5 - Main professional field of respondents on behalf of an organization or an institution
(multiresponse)

|| frequency || % responses

Industrial biotechnology || 75 || 17,9

Agriculture || 60 || 14,4

Food and feed || 53 || 12,7

Energy and bio-fuels || 51 || 12,2

Chemicals || 47 || 11,2

Forestry || 28 || 6,7

Environment || 23 || 5,5

Transport || 6 || 1,4

Health || 6 || 1,4

Fisheries and aquaculture || 5 || 1,2

Socio-economics || 4 || 1,0

Nanotechnology || 3 || ,7

|| ||

Other || 47 || 11,2

Other (non-pharmaceutical) biotechnologies || 10 || 2,5

Total (n= 299; responses = 418) || 418 || 100,0

2.1.3.     The whole sample

In order to
synthetize the information about the type of organization the respondents
worked for, a typology was created, combining the answers to the variables
shown in table 2 and table 4.

The typology has four categories[2]: Private,
Public, Academia and NGO (Non-governmental organization) (tab. 6).

The majority of respondents worked in a
private organization (64.6%), whereas 24.6% belonged to the academic sector.
Few respondents were categorized coming from the Public sector (8.8%) or a NGO
organization (2.0%).

tab. 6 - Type of
organization

|| frequency || %

Private || 412 || 64,6

Academia || 157 || 24,6

Public || 56 || 8,8

 NGO || 13 || 2,0

Total || 638 || 100,0

Considering the entire
sample, the most represented professional fields were Agriculture (20.6%),
followed by Industrial biotechnology (15.9%), Food and feed (13.3%), Energy and
bio-fuels (10.7%) and Chemicals (10.5%).

tab. 7 - Main professional
field of respondents (whole sample; multiresponse)

|| frequency || % responses

Agriculture || 175 || 20,6

Industrial biotechnology || 135 || 15,9

Food and feed || 113 || 13,3

Energy and bio-fuels || 91 || 10,7

Chemicals || 89 || 10,5

Forestry || 55 || 6,5

Environment || 48 || 5,6

Transport || 14 || 1,6

Health || 14 || 1,6

Socio-economics || 9 || 1,1

Nanotechnology || 7 || ,8

Fisheries and aquaculture || 5 || ,6

|| ||

Other || 74 || 8,7

Other (non-pharmaceutical) biotechnologies || 21 || 2,5

Total (n= 638; responses = 850) || 850 || 100,0

In the following graph, professional fields
were re-categorized according to
primary (35.7%) and other type of production (64.3%).

fig. 4 – Type of
Production (n= 638; %)

3.           Identification of the problems

Section B of
the questionnaire addresses the respondents’ perception about the
competitiveness of the European Bio-based Industries. Participants were asked
to express their view about the state-of-the-art of the bio-based economy in Europe, focusing on the problems faced by European Bio-based Industries. This section of
the questionnaire contained three sets of items, whose specific aim was to
survey the opinions of the respondents about the potential strength and
weakness of the bio-based industries in relation to the current state of
affairs in research and innovation.

3.1.        Overall views on the
competitiveness of the European bio-based Industries

The first
question of section B intended to analyze what participants think about the
general level of competitiveness of the European bio-based Industries. This
topic was surveyed with a set of seven statements, each one of them referring
to the perceived competitiveness in various steps in the value chain (Primary
production; Logistics and storage; Extraction and processing of renewable
resources; Commercialization; Market development).

Respondents
were asked to express their agreement with each item using a 5 point Likert
scale, ranging from “strongly disagree” to “strongly agree”.

According to the respondents’ answers, the items were divided in
three groups:

(1)
Sectors in which European bio-based Industries
were considered competitive in a global context (fig. 5):

·
Logistics and Storage (strongly agree + agree =
65.0%) and

·
Primary production (strongly agree + agree =
54.5%);

(2)
Sectors in which uncertainty prevailed over
European bio-based Industries competitiveness in a global context (tab. 8):

·
Extraction and processing of renewable
biological resources into value-added bio-based materials (neutral =
40.1%) and

·
Extraction and processing of renewable
biological resources into biofuels (neutral = 39.3%);

(3)
Sectors in which European bio-based Industries
were not considered competitive in a global context (fig. 5):

·
EU measures for market development,
harmonization and standardization in the field of bio-based Industries
(strongly disagree + disagree = 55.7%) and

·
Commercialization of value-added products
produced from renewable biological resources (strongly disagree + disagree =
50.5%).

tab. 8 - What are your
overall views on the competitiveness of the European bio-based Industries? (%)

Items || strongly disagree || disagree || neutral || agree || strongly agree || no opinion || total

EU primary production is competitive in a global context || 5,2 || 23,0 || 14,6 || 47,0 || 7,5 || 2,7 || 100,0

EU logistics and storage is competitive in a global context || 1,6 || 12,4 || 15,5 || 55,6 || 9,4 || 5,5 || 100,0

Extraction and processing of renewable biological resources into value-added bio-based materials in the EU is competitive in a global context || 3,6 || 21,5 || 40,1 || 24,1 || 8,5 || 2,2 || 100,0

Extraction and processing of renewable biological resources into biofuels in the EU is competitive in a global context || 5,8 || 28,7 || 39,3 || 17,2 || 5,3 || 3,7 || 100,0

Commercialization of value-added products produced from renewable biological resources in the EU is competitive in a global context || 29,2 || 21,3 || 19,1 || 19,9 || 7,4 || 3,1 || 100,0

EU measures for market development, harmonization and standardization in the field of bio-based Industries are competitive in a global context || 28,4 || 27,3 || 21,6 || 13,9 || 3,9 || 4,9 || 100,0

Overall, Europe's bio-based Industries are competitive on the worldwide scene || 3,1 || 23,8 || 42,9 || 21,9 || 5,3 || 3,0 || 100,0

N. B.    =
"Strongly agree" plus "Agree" more than "Strongly
disagree" plus "Disagree";  ="Strongly
disagree" plus "Disagree" more than" Strongly agree"
plus "Agree";   ="Neutral"
more than 25%;

fig. 5 - What are your overall views on the
competitiveness of the European bio-based Industries? (%; strongly disagree +
disagree vs. strongly agree + agree)

As shown in the
following graphics (fig. 6 to fig. 7), the overall competitiveness perception
of EU Bio-based Industries appeared to vary by type of organization:
respondents from academia and the public sector were more likely to have a
better perception of the competitiveness of Bio-based Industries than those
from the private sector.

fig.
6 - What are your overall views on the competitiveness
of the European bio-based Industries? (%; strongly disagree + disagree vs.
strongly agree + agree)

Private
Sector Academic Sector

fig. 7 - What are your overall views
on the competitiveness of the European bio-based Industries? (%; strongly
disagree + disagree vs. strongly agree + agree)

Public
Sector NGO Sector

3.2.        The European bio-based
Industries: strengths and weaknesses

The next part
of the questionnaire dealt with the perceived strengths and weaknesses of the
European bio-based Industries. Two sub-dimensions were surveyed: 1) the EU's
current situation and 2) the current innovation capacity of the bio-based
Industries.

Regarding the
evaluation of the EU's current situation, respondents were asked to rate, on a
5 point scale from “very weak” to “very strong”, the EU's current situation for
10 items, having as benchmark what they believed was required for Europe to be
successful in the development of competitive bio-based industries (Tab. 9).

According to the responses received, the
following 3 items received the highest approval rates, based on summing up the
results for "very strong" and "strong":

·
Strength of basic research in areas of likely
future relevance with 78.7%;

·
Investment of the private sector in research and
innovation related to bio-based industries with 50.3%;

·
Filing of patent application with 42.6%.

Other items
considered rather strong than weak by respondents were:

·
Strength of applied research & technology
development (41.8%);

·
SME participation in Research and Innovation
related to bio-based industries (40.7%);

Having analyzed
the responses for “very weak” and “weak”, two items were identified as being by
far the weakest points:

·
Access of bio-based industries to a range
of state-of-the-art demonstration plants with 70.8%;

·
Involvement of primary producers (farmers,
forestry or aquaculture) in innovation efforts related to the development of
supply chains for biomass as feedstock for bio-based industries with 68.5%.

Other items
considered more weak than strong by respondents were:

·
Collaboration between stakeholders along value
and supply chains in terms of conducting R&I pertinent to bio-based
industries (60.7%);

·
Investment of the public sector in Research and
Innovation related to bio-based industries (59.3%);

·
EU wide coordination of applied research &
technology development (55.9%).

In the context of this online public
consultation it was surprising to see that even the public sector itself seemed
to indicate that the investment in R&I by the public sector was considered
a weakness (Figure 9). Due to the sample size of 638 valid responses, this
result could certainly not be regarded as fully representative for the public
sector in the EU in general; nevertheless it was considered to show a consensus
among all stakeholder groups, calling for better and more public support for
R&I activities in the EU.

tab.
9 - The European bio-based Industries: strengths and weaknesses - the EU's
current situation (%)

Items || very weak || weak || neutral || strong || very strong || no opinion || total

Strength of basic research in areas of likely future relevance || 0,6 || 7,7 || 11,1 || 64,6 || 14,1 || 1,9 || 100,0

Strength of applied research & technology development || 0,6 || 40,6 || 15,7 || 32,1 || 9,7 || 1,3 || 100,0

EU wide coordination of applied research & technology development || 26,6 || 29,3 || 23,8 || 13,6 || 4,1 || 2,6 || 100,0

Involvement of primary producers (farmers, forestry or aquaculture) in innovation efforts related to the development of supply chains for biomass as feedstock for bio-based industries || 8,2 || 60,3 || 17,1 || 9,9 || 2,4 || 2,1 || 100,0

Investment of the private sector in Research and Innovation related to bio-based industries || 4,1 || 23 || 20,4 || 45,6 || 4,7 || 2,2 || 100,0

SME participation in Research and Innovation related to bio-based industries. || 6,3 || 23,2 || 24,1 || 35,7 || 5 || 5,7 || 100,0

Investment of the public sector in Research and Innovation related to bio-based industries || 5,2 || 54,1 || 20,7 || 14,7 || 3,6 || 1,7 || 100,0

Filing of patent applications (in line with the exploitation potential of research results obtained) || 1,6 || 14,7 || 27,0 || 40,4 || 2,2 || 14,1 || 100,0

Collaboration between stakeholders along value and supply chains in terms of conducting R&I pertinent to bio-based industries || 4,9 || 55,8 || 20,5 || 12,1 || 3,1 || 3,6 || 100,0

Access of bio-based industries to a range of state of the art demonstration plants || 39 || 31,8 || 14,7 || 7,4 || 2,8 || 4,3 || 100,0

N. B.    =
"Very strong" plus "Strong" more than "Very weak"
plus "Weak";  ="Very weak" plus
"Weak" more than "Very strong" plus "Strong";   ="Neutral"
more than 25%;   =”no
opinion" more than 10%

fig. 8 - The European bio-based
Industries: strengths and weaknesses - the EU's current situation (%; very weak
+ weak vs. very strong + strong)

fig. 9 - The European
bio-based Industries: strengths and weaknesses - the EU's current situation (%;
very weak + weak vs. very strong + strong)

Private
Sector                                                                           Academic
Sector

fig. 10 - The European bio-based
industries: strengths and weaknesses - the EU's current situation (%; very weak
+ weak vs. very strong + strong)

Public
Sector                                                                                                                     NGO Sector

Overall, the perception of individual
stakeholder groups with regard to the items surveyed was found to be very
similar and in line with the overall results for all stakeholder groups
together. However, some interesting indications in terms of different views
between stakeholder groups were identified as follows:

·
The NGO and academic sector differed from the
other 2 sectors in that they regarded the participation of SMEs in research and
innovation activities as being rather weak, whereas the private and public
sectors considered this being rather a strong point in the EU.

·
The private and public sectors regarded the
investment of the private sector in R&I as a strength, whereas the
NGO/academic sectors seem to have considered this rather a weakness.

·
And finally, the same pattern was identified for
filing patent applications, which was regarded by the private and public
sectors rather a strength, in contrast to the other 2 sectors, which were of
opposing views.

The second item surveyed the opinion of
stakeholders regarding the current innovation capacity of the bio-based
industries in the EU. A set of 11 statements was presented in the
questionnaire. These statements were considered having a direct or indirect impact
on the industrial innovation capacity. Respondents were again asked to rate
these statements on a 5 point scale from strongly disagree to strongly agree.

Participants
were found to generally disagree with the majority of the statements, and
therefore also indicating an overall limited innovation capacity of bio-based
Industries in the EU. Taking the responses of all stakeholder groups into
account, the most disapproved statements were as follows (see Table 10 and
Figure 11):

·
Consumers are well informed about benefits and
risks associated with bio-based products with 82.2%;

·
Bio-based Industries are sufficiently
consolidated and integrated (critical mass) across Europe to support the growth
of the biorefinery infrastructure with 69.9%;

·
Appropriate industry standards, certification
systems and labels are in place to create a favorable economic environment for
the development of bio-based industries with 68.8%;

·
Member state public support mechanisms
stimulating large-scale deployment of innovation in the bio-based industries
are strong with 68.0%.

However, 2 statements overall received
fairly positive ratings from all participants, namely:

·
There is good potential to source, in an
environmentally sustainable way, other types of non-food feedstocks with 56.9%;

·
There is a sufficient availability of
traditional feedstock, mainly foodcrops such as maize, wheat, sugar beet or
oilseeds in Europe, to support the rapid growth of bio-based industries while
assuring food and feed supply with 51.1%.

Generally speaking, under the current
circumstances respondents seemed not to have much confidence in the current
innovation capacity of the bio-based industries in the EU. This issue was
further analyzed in the following sections of this report.

tab. 10 - European bio-based Industries:
strengths and weaknesses which may have a direct or indirect impact on the
innovation capacity of bio-based industries (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

Bio-based Industries are sufficiently consolidated and integrated (critical mass) across Europe to support the growth of the biorefinery infrastructure || 8,3 || 61,6 || 13,6 || 11,8 || 1,7 || 3,0 || 100,0

There is a sufficient availability of traditional feedstock, mainly foodcrops such as maize, wheat, sugar beet or oilseeds in Europe, to support the rapid growth of bio-based industries while assuring food and feed supply || 8,6 || 21,3 || 13,5 || 21,0 || 30,1 || 5,5 || 100,0

There is good potential to source, in an environmentally sustainable way, other types of non-food feedstocks (e.g. residues from agriculture, forestry and biowaste, lignocellulosic crops) in Europe, supporting the future development of EU bio-based industry || 2,0 || 6,3 || 33,2 || 36,8 || 20,1 || 1,6 || 100,0

Appropriate solutions to ensure an effective biomass supply chain are already in place (e.g. logistics, stable supply contracts) || 11,6 || 31,8 || 39,5 || 13,2 || 1,4 || 2,5 || 100,0

Necessary cross-sectorial collaboration between stakeholders in bio-based value-chains enabling smart and sustainable ways of using biomass is in place || 8,5 || 56,7 || 15,5 || 11,9 || 4,9 || 2,5 || 100,0

EU level public support mechanisms stimulating large-scale deployment of innovation in the bio-based industries are strong || 37,8 || 29,8 || 18,5 || 9,1 || 1,9 || 3,0 || 100,0

Member state public support mechanisms stimulating large-scale deployment of innovation in the bio-based industries are strong || 34,0 || 34,0 || 18,0 || 9,4 || 1,4 || 3,1 || 100,0

Appropriate industry standards, certification systems and labels are in place to create a favourable economic environment for the development of bio-based industries || 8,9 || 59,9 || 13,8 || 10,3 || 2,4 || 4,7 || 100,0

Policy measures and initiatives promoting the use of bio-based products create a favourable environment for the development of local bio-based industries || 9,1 || 52,7 || 15,2 || 13,0 || 6,9 || 3,1 || 100,0

There is a strong and effective integration of measures to protect the environment with measures aimed at the development of bio-based industries || 7,7 || 53,0 || 17,1 || 14,7 || 2,8 || 4,7 || 100,0

Consumers are well informed about benefits and risks associated with bio-based products || 48,7 || 33,5 || 9,4 || 5,6 || ,9 || 1,9 || 100,0

N. B.    =
"Strongly agree" plus "Agree" more than "Strongly
disagree" plus "Disagree";  
 ="Strongly disagree" plus "Disagree" more
than" Strongly agree" plus "Agree";    ="Neutral" more than 25%

fig. 11 - Actions required for Europe to be successful in enhancing the innovation capacity of the bio-based Industries

(%; strongly disagree +
disagree vs. strongly agree + agree)

fig. 12 - Actions required
for Europe to be successful in enhancing the innovation capacity of the
bio-based Industries

(%; strongly disagree +
disagree vs. strongly agree + agree)

Private Sector                                                                                    Academic Sector

fig. 13 - Actions required for Europe to be successful in enhancing the innovation capacity of the bio-based Industries

(strongly disagree +
disagree vs. strongly agree + agree)

Public Sector                                                                                      NGO Sector

Figures 12 and 13 display the opinion of the individual
stakeholder groups regarding the 11 statements mentioned. Apart from 2 issues,
no major differences between the groups were identified.

The statement “There is
a sufficient availability of traditional feedstock, mainly food crops such as
maize, wheat, sugar beet or oilseeds in Europe, to support the rapid growth of
bio-based industries while assuring food and feed supply” was supported by the
majority of respondents of the private and public sector groups, whereas the
majority of the academic and NGO groups did not agree with this statement.

Another
difference in views between stakeholder groups was found regarding the
statement "Appropriate industry standards,
certification systems and labels are in place to create a favorable economic
environment for the development of bio-based industries". Here, the
opinion within the NGO group was equally split between those who agreed and who
disagreed (both 30.8%), while respondents of the other 3 groups largely
disapproved this statement.

4.           European Added Value

Section C of the questionnaire requested
the view of stakeholders on the added value of EU level action on research and
innovation for the bio-based industries. Respondents were asked to provide
their opinions regarding: 1) the importance of EU level intervention in
comparison with other types of interventions and 2) the added value of EU level
intervention.

4.1.        The importance of EU level intervention

Participants were asked to provide their
opinion concerning the added value of European level intervention in comparison
with no public intervention and intervention at regional and/or national level.

According to the replies displayed in table 11, respondents
strongly believed that support for research and innovation actions at European
level is essential; the statement “An intervention at EU level is needed to
help industry address the problems” was supported by 94.3% of all participants.
No major differences between stakeholder groups were noted in this regard,
although the statement received slightly more support from private and academic
stakeholders and slightly less from NGOs and public stakeholders.

In this context also to be noted that some participants
from academia with 18.5%, NGO with 15.4% and private stakeholders with 10.2%,
expressed support for intervention at regional or national level.

tab. 11 -
Tackling the problems (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

Industry alone, without government support, is able to address the relevant problems || 54,5 || 38,7 || 3,4 || 1,7 || ,8 || ,9 || 100,0

An intervention at the level of the regions or of Member States would be sufficient to help industry address the relevant problems || 10,2 || 59,9 || 16,8 || 9,7 || 2,5 || ,9 || 100,0

An intervention at EU level is needed to help industry address the problems || ,8 || 1,1 || 2,5 || 31,0 || 63,3 || 1,3 || 100,0

N. B.    =
"Strongly agree" plus "Agree" more than "Strongly
disagree" plus "Disagree";  ="Strongly
disagree" plus "Disagree" more than" Strongly agree"
plus "Agree";   ="Neutral"
more than 15%

fig. 14 - Tackling
the problems (%; strongly disagree + disagree vs. strongly agree +
agree)

fig. 15 - Tackling
the problems (%; strongly disagree + disagree vs. strongly agree +
agree)

Private Sector

Academic Sector

fig.
16 - Tackling the problems (%; strongly
disagree + disagree vs. strongly agree + agree)

Public Sector

NGO Sector

4.2.        Added value of EU level intervention

The next
section of the questionnaire aimed to gather stakeholder's views about the
potential added value of public intervention at EU level with regard to
bio-based industries. The section was composed of 8 statements, which
respondents were asked to rate, using a series of 5 points ranging from “Strongly disagree” to “Strongly
agree”.

Table 12 and figure 17 respectively provide an overview of the
responses received and the results achieved in terms of ranking the 8
statements on the added value of a possible EU intervention. According to the results, all statements listed in the
questionnaire were considered by the stakeholders to indeed provide added
value, with strongest support for:

·
achieving the required level of investment in
research and innovation with 93.1%;

·
ensuring EU wide cooperation between all
relevant stakeholders along the value chains with 92.0%;

·
providing improved policy coherence, e.g. in
terms of environmental, agricultural and industrial policies with 91.4%;

·
promoting non-traditional partnerships
(transnational, cross-sectorial) between stakeholders that may otherwise lack
opportunities or incentives to collaborate with 90.8%.

The least appreciated
statement was identified as “greater mobilization of research efforts in
universities and research institutes”, which was supported by the respondents
with 61.5%, with 34.3% of them giving a
"neutral" answer.

tab. 12 - EU intervention
will provide added value in terms of: (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

… mobilizing the necessary critical mass required to reach key objectives in a timely way || ,6 || 1,3 || 7,1 || 38,9 || 50,8 || 1,3 || 100,0

… ensuring EU wide cooperation between all relevant stakeholders along the value chains || ,2 || 1,6 || 5,3 || 62,2 || 29,8 || ,9 || 100,0

… promoting non-traditional partnerships (transnational, cross-sectorial) between stakeholders that may otherwise lack opportunities or incentives to collaborate || ,3 || 1,1 || 6,9 || 32,3 || 58,5 || ,9 || 100,0

… contribute to achieving the required level of investment in research and innovation || ,5 || ,8 || 4,7 || 32,0 || 61,1 || ,9 || 100,0

… greater mobilisation of research efforts in universities and research institutes || ,5 || 2,4 || 34,3 || 35,3 || 26,2 || 1,3 || 100,0

… coordination between national policies || ,3 || 1,1 || 9,6 || 60,3 || 26,3 || 2,4 || 100,0

...reduce first mover risk associated with deployment of innovative technologies || ,2 || 1,6 || 8,2 || 27,4 || 58,8 || 3,8 || 100,0

… providing improved policy coherence, e.g. in terms of environmental, agricultural and industrial policies || ,3 || ,9 || 5,5 || 29,5 || 61,9 || 1,9 || 100,0

N. B.    = "Strongly
agree" more than " agree" = " Agree" more than "
Strongly agree ";   ="Neutral"
more than 20%

fig. 17 - EU intervention will
provide added value in terms of: (%; strongly agree + agree)

fig. 18 - EU intervention will
provide added value in terms of: (%; strongly agree + agree)

differences by
stakeholders

5.           Objectives of EU level intervention

Section D of the questionnaire sought
stakeholder's views on a range of objectives of EU level intervention.
Respondents were asked to rate in 5 steps from “Not important at all” to “Very
important” the significance of these 15 objectives, the results of which are
summarized in table 13.

According the replies received, the top 5 ranked EU level
intervention objectives were as follows:

·
facilitate more rapid deployment of promising technologies in pilot,
demonstration and "first of its kind" industrial scale plants with 94.2%;

·
generate knowledge required for competitiveness
of EU industries in the medium and long term with 93.4%;

·
promote effective collaboration on research and
innovation between all stakeholders along the value chain for greening the
industry with 93.3%;

·
delivering innovative technologies for the use
of biomass in smart and efficient no-waste processes with 92.0%;

·
deliver innovative technologies aimed at
building stable, competitive and sustainable biomass/biowaste supply
chains (e.g. with regard to logistics and integration of supply networks) with
90.6%

The objective of "ensuring that greater emphasis is
placed on seeking protection through intellectual property rights when
promising results emerge" was the least supported statement by
respondents, still receiving a relatively good mark of 64.9%.

With regard to differences between
individual stakeholder groups, it was noted that in particular the objective of
"reinforcing and effectively utilising the
research and innovation potential present in Europe's universities and research
centres" showed significantly higher support from academia compared to the
public and private sectors. Given the discussions on the innovation
"valley of death" in Europe, this could be interpreted as indeed
there seems to be a gap between basic and applied research, which closer
cooperation between academia and private sectors is expected to overcome.

With regard to
differences between stakeholder groups, NGO seemed to consider the following 2
statements as of much lower importance than the other 3 groups:

·
"ensure that greater emphasis is placed on
seeking protection through intellectual property rights when promising results
emerge" was considered by only 23.1% of NGOs as being an important
objective of EU level intervention;

·
"favour high industrial participation rates
in funded projects" was considered important by 46.2% of NGO participants,
still considerably lower compared to other stakeholders.

tab. 13 - Objectives of EU
level intervention: EU level action on Research and Innovation in connection
with bio-based industries should (%)

Items || Not at all important || Unimportant || Neutral || Important || Very important || No opinion || Total

… generate knowledge required for competitiveness of EU industries in the medium and long term || 0,2 || 0,6 || 4,7 || 31,5 || 61,9 || 1,1 || 100,0

… boost EU leadership in technologies for conversion of lignocellulosic biomass and other non-food feedstock such as biowaste || 0,0 || 0,5 || 7,4 || 26,2 || 64,3 || 1,6 || 100,0

… promote effective collaboration between stakeholders to conduct the research and innovation work required to ensure sufficient availability of biomass || 0,0 || 0,6 || 7,8 || 33,7 || 56,7 || 1,2 || 100,0

… promote effective collaboration on research and innovation between all stakeholders along the value chain for greening the industry || 0,0 || 1,3 || 4,9 || 33,4 || 59,9 || 0,5 || 100,0

… promote building projects with greater critical mass || 0,3 || 2,5 || 12,9 || 29,5 || 53,3 || 1,5 || 100,0

… incentivise private sector stakeholders to increase their investment level in R&I || 0,0 || 1,4 || 8,5 || 34,5 || 54,1 || 1,5 || 100,0

… help to build pan-European and cross-sectoral linkages with a view to achieving enhanced innovation success || 0,0 || 1,3 || 29,9 || 37,3 || 29,6 || 1,9 || 100,0

… effectively promote the participation of SME's in funded projects || 0,2 || 1,7 || 11,6 || 53,1 || 32,0 || 1,4 || 100,0

… favour high industrial participation rates in funded projects || 0,2 || 1,4 || 13,2 || 31,8 || 52,4 || 1,0 || 100,0

… reinforce and effectively utilise the research and innovation potential present in Europe's universities and research centres || 0,0 || 0,3 || 31,8 || 32,6 || 33,9 || 1,4 || 100,0

… ensure that greater emphasis is placed on seeking protection through intellectual property rights when promising results emerge || 0,6 || 6,4 || 22,9 || 50,5 || 14,4 || 5,2 || 100,0

… facilitate more rapid deployment of promising technologies in pilot, demonstration and "first of its kind" industrial scale plants. || 0,0 || 0,8 || 3,6 || 23,8 || 70,4 || 1,4 || 100,0

… deliver research and innovation outputs (e.g. related to standards or labels) that can stimulate the growth of the markets for bio-based products || 0,2 || 1,6 || 8,8 || 30,1 || 57,5 || 1,8 || 100,0

… deliver innovative technologies for the use of biomass in smart and efficient no-waste processes || 0,0 || 0,6 || 5,6 || 30,6 || 61,4 || 1,8 || 100,0

… deliver innovative technologies aimed at building stable, competitive and sustainable biomass/biowaste supply chains (e.g. with regard to logistics and integration of supply networks) || 0,0 || 0,9 || 6,9 || 59,9 || 30,7 || 1,6 || 100,0

N. B.    = "Very
important" more than " Important"; = " Important" more
than "Very important";   ="Neutral"
more than 20%

fig. 19 - EU level action on Research
and Innovation in connection with bio-based industries should (%; important +
very important)

fig. 20 - EU level action on Research
and Innovation in connection with bio-based industries should (%; important +
very important)

differences by stakeholders

6.           Towards a PPP?

Section E of the questionnaire contained a single question seeking
the view of stakeholders regarding the format of a future EU research programme
on bio-based industries. It was explained in the questionnaire that compared to
the standard management of collaborative research by the European Commission,
setting up a PPP would allow for a much greater role of private sector
stakeholders in establishing a jointly agreed long-term strategic research
agenda with the European Commission. It was furthermore explained that compared
to standard collaborative research, a PPP would allow to take on board a
greater private sector financial contribution, thus generating additional
"leverage" at European level and that different types of PPP
structures could be considered.

The vast
majority of stakeholders, 86.9%, agreed or strongly agreed that a PPP was the
most appropriate mechanism to implement the research and innovation
programme for bio-based industries under Horizon 2020 (fig. 21).

fig. 21 - A
public-private partnership is the most appropriate mechanism to
implement the Research and Innovation Programme for bio-based Industries under
Horizon 2020 (%)

The idea that a PPP could be the best solution to foster
the implementation of a research
and innovation programme was
strongly supported by the private sector with 93,2%, followed by academia with
77.7%, the public sector with 69.6% and NGOs with 69.2% (fig. 22).

fig. 22 – Agreement
towards PPP per Stakeholders (%)

7.           Impacts

Section F
explores the potential impact of EU research and innovation actions - applied
in the context of a PPP - on bio-based industries. Specifically, respondents
were asked to rate on a 5 point scale from “strongly disagree” to “strongly
agree”, their agreement with twelve medium or longer-term socio-economic
impacts that one can expect to achieve as a result of an optimal development of
the bio-based industries in Europe under the PPP frame.

Considering together “strongly agree” or
“agree”, all the items were scored with a mark higher than 80%. This
significant result means that interviewees are very favorable to a European research and innovation strategy on the basis of a
PPP and they believe that implementing this could produce many favorable
outcomes in terms of socio-economic impact (tab. 14).

Participants
mostly appreciated the following statements, when they were asked whether
research and innovation work done in the context of a PPP:

·
will enable a greater use of renewable
biomaterials in a wide range of products (92.3%);

·
will help to increase overall investments in
research and innovation activities in the EU in the sectors concerned (91.4%);

·
will help ensure that bio-based industries
develop in line with EU objectives on sustainability (90.6%);

·
will contribute to the competitiveness of
bio-based industries in the EU at a global level (89.5%);

·
will contribute to developing technologies that
allow the conversion/upgrading of existing plants to use new types of biomass
input and / or to manufacture new products (88.7%);

·
will help in achieving EU ambitions with regard
to bio-based products from biomass in a way that is environmentally sustainable
and compatible with food/feed security (88.2%);

·
will increase the chances of setting up
"first of its kind" industrial scale biorefineries in the EU based on
innovative processes (87.7%);

·
will contribute to the creation of new jobs in
rural and/or coastal areas (85.3%).

The least
supported items were:

·
will contribute to the creation of new and
attractive income streams for farmers, foresters and aquaculture (81.5%) and,

·
will help ensure development of bio-based
industries in a way that is compatible with food security objectives (82.7%).

Results clearly indicate that the private
sector is more confident towards the socio-economic effects of a PPP than the
academic and the public sectors: the percentage of “strongly agree + agree”
expressed by respondents from the private sector is by far the highest in all
the items but one; “will enable a greater use of renewable
biomaterials in a wide range of products” received slightly more support from
the academic sector (94.3 vs 93.9%).

Tab. 14 - Achievement of
Socio-economic Impacts: Research and innovation work done in the context of a
PPP on bio-based industries … (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || Total

… will help ensure development of bio-based industries in a way that is compatible with food security objectives || 0,6 || 2,5 || 11,4 || 29,3 || 53,4 || 2,8 || 100,0

… will help ensure that bio-based industries develop in line with EU objectives on sustainability || 0,5 || 2,0 || 5,6 || 36,4 || 54,2 || 1,3 || 100,0

… will contribute to developing technologies that allow the conversion/upgrading of existing plants to use new types of biomass input and / or to manufacture new products || 0,5 || 1,6 || 7,1 || 33,4 || 55,3 || 2,1 || 100,0

… will increase the chances of setting up "first of its kind" industrial scale biorefineries in the EU based on innovative processes || 0,5 || 1,3 || 8,2 || 31,3 || 56,4 || 2,3 || 100,0

… will contribute to the competitiveness of bio-based industries in the EU at a global level || 0,3 || 2,2 || 6,7 || 29,5 || 60,0 || 1,3 || 100,0

… will contribute to the development of more effective biomass supply chains in the EU || 0,5 || 2,5 || 11,0 || 35,0 || 49,4 || 1,6 || 100,0

… will contribute to the creation of new and attractive income streams for farmers, foresters and aquaculture || 0,2 || 2,7 || 13,0 || 29,8 || 51,7 || 2,6 || 100,0

… will contribute to the creation of new jobs in rural and/or coastal areas || 0,3 || 3,0 || 8,6 || 28,1 || 57,2 || 2,8 || 100,0

… will contribute to achieving EU greenhouse gas emission reduction objectives || 0,3 || 3,6 || 10,5 || 28,2 || 55,2 || 2,2 || 100,0

… will enable a greater use of renewable biomaterials in a wide range of products || 0,2 || 0,8 || 5,0 || 26,8 || 65,5 || 1,7 || 100,0

… will help in achieving EU ambitions with regard to bio-based products from biomass in a way that is environmentally sustainable and compatible with food/feed security || 0,6 || 1,7 || 6,7 || 29,9 || 58,3 || 2,8 || 100,0

… will help to increase overall investments in research and innovation activities in the EU in the sectors concerned || 0,2 || 1,6 || 5,6 || 29,0 || 62,4 || 1,4 || 100,0

N. B.    = "Strongly
agree" more than 50%;   ="Neutral”
more than 10%

Fig. 23 - Achievement of
Socio-economic Impacts: Research and innovation work done in the context of a
PPP on bio-based industries (%; strongly agree + agree)

Fig. 24 - Achievement of
Socio-economic Impacts: Research and innovation work done in the context of a
PPP on bio-based industries (%; strongly agree + agree)

differences by stakeholders

Annex 5 -
Current and future potential of biomass as a source of materials and energy

This Annex presents
some considerations regarding the availability of advanced sustainable biomass
resources necessary to achieve the different quantitative targets envisioned
for the EU's bio-based industries, in terms of production of materials, fuels
and energy. These considerations rely on a number of studies authored e.g. by
the European Environmental Agency. It is however important to acknowledge that
the sourcing of additional biomass has to be fully compliant with the European
agricultural, environmental and renewable energy/biofuels policies. This
implies sustainability of agricultural production or forest management,
sustainable utilisation of agricultural residues and organic wastes and smart
use of marginal and degraded lands for production of dedicated industrial
crops. Such considerations would need to be addressed at programme and/or
project level, before any implementing actions would be carried out, e.g. in
the form of life-cycle assessments.

Furthermore, this
annex does not attempt to simultaneously assess whether the biomass flows that
are theoretically available can also be mobilised at an economically
competitive cost taking into account the current state of technology and other
organisational factors.

It should also be noted that according to
the National Renewable Energy Action Plans[3] (NREAP) of Member States, the production of biofuels from waste
feedstocks and advanced biofuels technologies is not expected to be significant
and lower than anticipated, reaching only 2.3 million tonnes of oil equivalent
(Mtoe) (approximately 1.5% with double counting) in 2020. The Impact Assessment
prepared in the context of amending Directives 98/70/EC and 2009/28/EC to
better address indirect-land-use-change reports that the installed capacity for
advanced biofuels is currently negligible in the MS, limited to a few pilot
plants; it however does not reflect upon future national plans for increasing
the industrial capacities to produce advanced biofuels.

Arriving at a
substantiated and comprehensive overall view is challenging since it requires
aggregating data for a number of sectors which are often considered separately
in different studies. Aggregation challenges include (i) combining biomass
supply data from agriculture, forestry and waste streams; and (ii) integrating
materials and energy potential.

Current status – Use of biomass

Based on the
Nova-Institute, an overall estimate of the total amount of biomass used in the
EU for energy and material uses was provided[4]. Total use is estimated to amount to 470 million tonnes. This
includes biomass from agriculture and biomass, including imported biomass (but
not imported biofuels).

The lion's
share (400 million tonnes) comes from forestry with an estimated 230
million tonnes of wood used as a "classical" bio-based material for
the woodworking and the pulp and paper industries. 170 million tonnes of wood
are used for production of energy (mainly heat and power)[5].

The amount of
biomass from agriculture, transformed in industrial material and energy is
estimated to amount to 70 million tonnes, with energy use (40 million tonnes)
estimated to be somewhat larger than material use (30 million tonnes).
Obviously, a much larger share of biomass from agriculture (> 90 %) goes
into food and feed applications.

Figure 1

Important
features to note:

-           In
spite of the fact that liquid biofuels are a subject of more active debate, on
a weight basis, the use of wood for energy production (mainly heat and power)
is estimated to exceed by a factor of > 4 the use of agricultural biomass
for energy production.

-           Biofuels
are currently mainly produced from agricultural biomass, today mostly
foodcrops. The estimated 2010 use of biomass in the EU for liquid biofuel
production amounted to approximately 10 million tonnes of oil (of which 6.3
million tonnes are rapeseed oil) and approximately 17,5 million tonnes of
starch/sugar crops (sugarbeet >>wheat > corn<other cereals. ).

-           Starch,
sugar and oilseed crops are also the most important crops serving as a raw
material input for producing industrial materials. According to Carus
the estimated 30 million tonnes of agricultural biomass dedicated to the
production of materials corresponds to some 16,5 million tonnes of pure starch
(10,3 million tonnes), sugar (1 million tonnes), oils (3,1 million tonnes) and
fibre (1,8 million tonnes) which are actually used by industry. This is in line
with the 30 million tonnes estimated since the remainder of the biomass use
represents the residual fractions of the crop.

In addition to
European biomass supplies, imported biofuels and biomass (such as wood pellets)
contribute to the total[6] and are important for Europe in terms of stabilizing supplies and
price levels.

Current
status – Production of energy and materials

Biomass
contributes about 85 Mtoe (million tonnes of oil equivalent) to the EU energy
mix. Biomass is thus by far the single most important source of renewable
energy in the EU.[7] (source market observatory energy
statistics EU). Renewable sources overall contribute 12.5 % of the EU's total
gross energy consumption.

The EU's liquid
biofuel production amounted to 12 Mtoe with biodiesel (9,6 Mtoe)
well ahead of bioethanol (2.3 Mtoe). The EU production of biofuels in 2010 thus
represented appr. 3 % of the 370 Mtoe final energy consumption of the transport
sector 370 Mtoe.

Figure 2

When looking
at materials use of biomass, wood is by far the most important source of
biomass with 230 million tonnes, primarily used in the woodworking and pulp and
paper industry.

The amount of
agricultural biomass dedicated to industrial material uses is estimated at 30
million tonnes.

-           In
the textile sector, the share of bio-based activities is estimated to be around
50 % (based on natural fibres).

-           In
the chemical industry, experts estimate that the current share by volume of
bio-based inputs in the amounts to approximately 10 % (with a higher fraction for
specialty and fine chemicals and a lower fraction for polymers and other bulk
chemicals).

-           More
specific estimates can be provided for certain specific subcategories of
"chemicals": bioplastics (some 0.2 million tonnes or less than 1 % of
all plastics), bio-composites (0.35 million tonnes representing some 14 % of
all composite materials), bio-lubricants (0.15 million tonnes), bio-solvents
(0.63 million tonnes). Bio-surfactants (1.5 million tonnes) represent the
largest specific product category.

This short
analysis clearly highlights that biomass is already today a very important
source of energy and materials, at least when we combine
"traditional" and "new" bio-based industries. It further
puts in perspective the particular significance of the forestry component in
total biomass use. As to the use agricultural crops for industrial
applications, striking features are the predominant use of food crops. As of
today, "residual" fractions and waste streams are still of very
limited relevance in the overall picture of biomass-based energy and materials
production.

Perspectives
for sustainable growth

An increase in
the share of energy and materials derived from biomass by in a 2020 to 2030
timeframe, can be achieved by

-           making
more efficient use of biomass resources as they already exist today (e.g.
forest resources , agricultural residues and biowaste streams).

-           producing
more and/or different types of biomass e.g. by increasing agricultural
productivity, expanding production of specific biomass crops.

Progress will
further depend on the state of play with regard to biomass conversion
technologies (e.g. making new types of biomass accessible to efficient
conversion) and on possibilities to use biomass in a smarter way (e.g.
producing multiple products from a single source material).

The echoes of
the "food versus fuel" debate sometimes tend to lead to a perception
that there is limited or no scope for making greater/better use of biomass for
energy and/or materials production. A brief review of several in-depth studies
on biomass potential and availability is therefore provided below. All studies
conclude that there is significant potential to expand the share of energy
and/or materials production from biomass in a 2020 to 2030 timeframe in a
sustainable way and without entering into conflict with food and feed security.

Obviously, a number of conditions will need to be met to realize
this potential in a sustainable way. Studies differ in their assessment of
these conditions, and in the extent to which they have been taken into account.
A review of these issues is beyond the ambition of this annex. Amongst
the important parameters we can mention: further modernization and efficiency
increases in conventional agricultural production and livestock management are
essential, effective sustainability frameworks, proper zoning and evolution of
agricultural policies.

A range of
estimates is available for three major sources of biomass that could
support further growth of the bio-based industries as compared to the current
status.

A first source
of biomass relates to different types of agricultural residues and waste
that are currently underutilized. Estimates range from 70 million tonnes to 225
million tonnes in the 2030 timeframe. The lower estimates place strong
restrictions on collection of agricultural residues, e.g. for reasons related
to protection of soil fertility. In energy equivalent this corresponds to a
range from 44 to 141 Mtoe.

So far
however, a lack of studies was noted that quantify the biomass potential from
agricultural production while taking fully into account current and upcoming EU
policies on agriculture and environmental requirements. For instance, the
utilisation of straw that otherwise would be incorporated into the soil in all
cases reduces the carbon content in the soil. This can reduce soil fertility,
which can imply a loss of productivity, water and nutrient retention and
thereby overall increased greenhouse gas emissions. Life cycle analyses that
compare the greenhouse gas balance of straw utilisation with soil incorporation
in a quantitative way are not yet available.

Study || Agricultural Biomass Potential (million tonnes) || Comments

IEA, 2011 low scenario || 90,3 || assuming 10% of residues are collected

IEA, 2011 high scenario || 225,7 || assuming 25% of residues are collected

Elbersen et al., 2012 || 158 || assuming 20% of residues are collected

BNEF, 2012 || 150 || assuming 17.5% of residues are collected

EEA, 2006 || 70 || very high restrictions for straw availability

Panoutsou et al., 2009 || 123 ||

EUBIONET, 2011 || 98 ||

BEE, 2010 low || 73 ||

BEE, 2010 High || 207 ||

RENEW || 134 || Only cereal straw

DBFZ & Oeko Institute, 2010 || 110 || Only cereal straw

EEA, 2012 || 119 || For 2020, in Storyline 1(economy & market first)

de Wit et al., 2010 || 206 ||

Table 1

A second
source of biomass relates to additional biomass from sustainable forestry.
Compared to an estimated current use of 400 million tonnes, it is estimated
that EU forests could sustainably supply between 237 and 342 million tonnes of
additional woody biomass (an energy equivalent of between 162 and 233 Mtoe) by
2030.

 Study || Forest Biomass Potential (million tonnes) || Comments

EUWOOD low, 2010 || 625 || the total potential that could be supplied by forests in the EU, regardless whether it is used for material or for energetic use.

EUWOOD high, 2010 || 898

Elbersen et al., 2012 || 342 || Additional potential to exploit

EEA, 2006 || 326

Panoutsou et al., 2009 || 267

EUBIONET, 2011 || 237

BEE, 2010 low || 222 ||

BEE, 2010 High || 514 ||

RENEW || expecting data ||

EEA, 2012 || 330 || For 2020, in Storyline 1(economy & market first)

de Wit et al., 2010 || 750 ||

Table 2

Estimates strongly depend on assumptions related to the quality of
forest management, constraints that may apply in terms of biodiversity
safeguards as well as on projections with regard to future
"conventional" demand for wood (e.g. in the pulp and paper industry).

Potential
for increased mobilisation but need for better data:
A clear potential to increase forest utilisation for energy exists in most
countries of the EU as only 60 – 70% of the annual increment of EU forests is
harvested. Much of the potential for expansion can be found in small private
holdings, comprising forest residues and complementary fellings, namely first
thinnings. The pattern of supply of wood for energy varies widely between
countries, but calculations at EU – level on such a potential of wood for
energy differ significantly. It will be important to improve the information
available about it.

Forest fragmentation has an impact on mobilisation: The average size of forest ownership in the EU is only 12.7 ha
in case of private holdings and about 975 ha in case of public holdings.
However, there are also considerable differences in the average size of private
forest holdings between individual Member States and regions. A further
increase in the number of private holdings is expected in several Eastern
European countries due to on-going restitution or privatisation processes. In
other countries forest holdings may be subdivided, as a rule due to successive
inheritances. Fragmented forest ownership structures will be of increasing
relevance for the European forest sector, which has an impact on wood
mobilisation.

Need to
ensure sustainable forest management: For forest
based biomass, the principles of Sustainable Forest Management that ensure
safeguarding economic, ecological and social functions of forests should apply
for forest management activities. The implementation of the new EU Forest
Strategy will address this.

A third major
source of biomass relates to dedicated production of industrial crops on
agricultural land. Estimates for the EU in 2030 vary largely, see table 2.

Study || Agricultural Biomass Potential (million                tonnes) || Comments

EEA, 2006 || 325 || especially for innovative bioenergy crops.

EEA, 2012 || 217 || 16.7 million ha available in 2020 in Storyline 1 (economy & market first)

Elbersen et al., 2012 || 234 || 18.8 million ha in 2030, reference scenario - Biomass Futures project

 Fischer et al., 2010 || 575 || Agricultural land potentially available for growing biofuel feedstocks in 2030: EU27 & Ukraine/ LU-Env scenario: 44.2 million ha

Table 3

Net land
availability for dedicated industrial crops depends strongly on various
policies and trends (e.g. agricultural and environmental policies,
international trade), time-frame and geographical scope. Assuming steady
improvements in agricultural management, in line with what has been
historically achieved, and measures to ensure compliance with sustainability
criteria, industrial crops can be expected to represent a large resource
category.

A consolidated
picture then emerges, indicating that in addition to current uses of biomass,
some 100 million tonnes of agricultural residues + 300 million tonnes of forest
material + 250 million tonnes of biomass from industrial crops could serve as
sustainable feedstock for new bio-based industries. This represents a total of
650 million tonnes. This figure however needs to be ascertained through further
research addressing the potential of producing industrial crops in dependence
of EU sustainability criteria and policies.

The industry
vision document aims for 30 % of all chemicals to be bio-based by 2030. Taking
into account that the current share is approximately at 10 %, this would mean
that biomass use for production of chemicals will need to be multiplied by a
factor of approximately 3. Today's production of chemicals is primarily derived
from food crops, with an estimated use of less than 30 million tonnes (this
figures includes textiles). Extrapolating from the current status (and assuming
the use of food crops is maintained at the current level) we can thus estimate
that allocating around 60 million tonnes or only 10 % of the "additional
biomass potential" to industrial materials uses should go a long way in
supporting the projected transformation of the chemical industry to much
greater use of bio-based resources. This overall estimate makes abstraction of
specific types of biomass available and is obviously based on the assumption
that suitable conversion processes will be developed for the types of biomass
that is actually available.

If "industrial
materials" targets can be reached with 60 million tonnes, close to 600
million tonnes of biomass could be left for energy related uses over and above
current energy uses. This could represent an energy equivalent of 376.8 Mtoe.
With projected transport fuel consumption in 2030 at around 400 Mtoe, biomass
availability per se is not an obstacle to reach 100 Mtoe or a 25 % contribution
of advanced biofuels to the transport fuel mix, thereby liberating the 30
million tonnes of agricultural materials currently dedicated to first
generation biofuels. In fact, an additional 276.8 Mtoe could remain available
to expand other types of energy uses. Non biofuel energy uses (e.g. production
of electricity and heat, mainly based on wood resources) are estimated to
amount to approximately 73 Mtoe today and could thus be expanded to reach well
over 300 Mtoe. Biomass could thus support a total energy production (fuel +
non-fuel) of around 400 Mtoe by 2030. EU total energy consumption (now 1703
Mtoe) is expected to remain constant or to decline in overall terms; hence a
contribution of around 25 % renewable energy derived from biomass appears
within reach from the perspective of theoretical sustainable biomass supply potential.

Economic
factors such as cost of mobilising certain types of biomass and the
availability of capital for the rapid development of biorefinery infrastructure
are likely to lead to a growth scenario under which the theoretical potential
of available biomass will not be exhausted in the foreseeable future.

Annex 6– Overview of research and innovation at
regional and national level

Germany

The BioEconomy
Research and Technology Council (BioÖkonomieRat[8]),
was founded jointly by the German Ministry of Education and Research and the
Ministry of Food, Agriculture and Consumer Protection, and is an independent
advisory body to the German government for all matters relating to bioeconomy.
The Council is made up of experts from university and non-university research
institutes, the federal government’s own departmental research, and from
research in the private sector. The mission of the BioEconomy Council is to
improve parameters, accelerate the development of innovative technologies, and
identify the need for future research. Another task of the Council is to
analyse the strategic goals of Germany as a whole, the individual Regions, as
well as those set within the EU and other international partner countries. The
BioEconomy Council’s first term has been set at three years, and is supported
by an office in Berlin.

The concrete
aims of the BioEconomy Council are:

·
To offer an overview of the opportunities and
prospects of the bio-economy in Germany;

·
To deliver scientifically-based recommendations
for measures to improve parameters;

·
To develop scenarios to create parameters for
research, education and training, and student support;

·
To help strengthen networks of relevant actors
from science, business and politics with a view to achieving maximum
harmonisation on strategic questions.

In 2010, the
Council published its analytical “Bio-economy Innovation Report[9]”, placing
emphasis on increasing biomass yield volumes and more efficient production
processes in the food and energy sectors. Meanwhile, also two reports with recommendations
were published: the report “Combine disciplines, improve parameters, seek out
international partnership[10]”
suggested for a restructuring of research funding and recommended incentive
systems for private investment, and in the report “Priorities in Bio-economic
Research[11]”),
the BioEconomy Council defined the priorities with regard to relevance and
urgency of the research topics. The Council has recently been very critical
towards the focus on bioenergy alone, arguing for more actions on behalf of
industrial biomass use[12].

Germany also developed an “Action plan for the industrial use of renewable
raw materials[13]”.

In 2007, the
German Federal Ministry of Education and Research initiated the creation of
five German regional industrial biotech clusters. Among these clusters is
CLIB2021[14]
(cofounded by the Ministry of Innovation, Science and Research of the German State of NRW) with 32 founding members. Since then the cluster grew to include more
than 70 academic institutes, companies and investors, launched R&D projects
with a total volume of 50 million Euros, founded 5 start-ups and attracted 10%
international members. Another cluster is BioM WB[15] with two
demonstration plants for cellulosic ethanol and acetic acid, a new
multi-purpose pilot plant for and a degree programme of industrial
biotechnology at the Technical University of Munich.

In order to
develop visions for the next generation of biotechnological processes and their
realization, the German Federal Ministry of Education and Research (BMBF) has
started in 2010 a common and longterm (over the next 10-15 years) strategy
process together with German Research Organisations (Max-Planck-Gesellschaft,
Fraunhofer-Gesellschaft, Helmholtz-Gemeinschaft and Leibniz-Gemeinschaft) and
German Universities. The cooperation of the research organisations has been
documented in a Memorandum of Understanding. This strategy process is
accompanied and advised by a newly founded coordination committee, in which all
partners are represented. This strategy process brings the German research
organisations, universities and ministry of education and research together to
a common dialogue. Expert discussion meetings, a yearly congress and a website[16] describing a
national competence map and the progress of this strategy process have been
created to assist the strategy process. In addition a new research price has
been installed this year, which will stimulate promising researchers, because
they can apply for the creation and financing of their own independent research
group for up to five years if successful. It is by the cooperation of all
relevant drivers from science, industry and politics in the framework of this
strategy process, by which a roadmap will be developed describing the most
important scientific and technological milestones. This will form the base for
future funding initiatives, which will accelerate the development of a next
generation of biotechnological processes.

The Netherlands

In the Netherlands, the previous Cabinet of Economic Affairs, Agriculture and Innovation has
decided that the biobased economy is one of the strong emerging economic
pillars to be supported. The development of the national strategy was the
result of an on-going interaction between business, society, and science,
stimulated by policy makers. In April 2012, the Cabinet presented a mid- and
longterm vision and strategy for the biobased economy[17]. Also the new
Cabinet “Rutte 2” has taken up the biobased economy as one of the priority
themes.

The innovation
contract biobased economy is a joint agenda developed by the industry and the
research organisations. It contains 6 working packages, each covering the
entire innovation chain (from more basic research to valorisation). ‘Biobased
materials’ is one of the working packages. In total more than 100 companies
will participate in the projects, and have committed more than EUR 200 million[18].

BE-Basic[19] (Biobased
Ecologically Balanced Sustainable Industrial Chemistry) is a public-private
partnership that develops industrial biobased solutions for a sustainable
society, and has an R&D budget of more than EUR 120 million. Half of this
is funded by the Ministry of Economic Affairs, Agriculture and Innovation.
BE-Basic was founded early 2010, and puts its international focus into practice
through strategic partnerships in a selected number of countries: Brazil, Malaysia, the US and Vietnam.

Sweden

In February
2012, the Swedish Government prepared a “Swedish Research and Innovation
Strategy for a Biobased Economy[20]”.
The following research and development needs were defined: the replacement of
fossil-based raw materials with biobased raw materials, smarter products and
smarter use of raw materials, change in consumption habits and attitude and
prioritisation and choice of measures (e.g. environmental consequences,
socio-economic consequences, governing policies).

France

In 2005, the
French General Directorate for Competitiveness, Industry and Services has
created the so-called Competitiveness clusters, an initiative that brings
together companies, research centers and educational institutions in order to
develop synergies and cooperative efforts. The French Government accompanies
cluster development by allocating financial support for the best R&D and
innovation platform initiatives via calls for projects or by seeking assistance
from local authorities, who can also provide financial support for cluster
projects (R&D, innovation platforms). One of the clusters is the
“Industries and Agro-Resources” Cluster or IAR[21].
This cluster unites stakeholders from research, higher education, industry and
agriculture in the Champagne-Ardenne and Picardy regions of France around a shared goal: the value-added non-food exploitation of plant biomass. In order to
achieve this ambitious objective, the IAR cluster has defined four strategic
fields of activity around the biorefinery concept: bioenergy, biomaterials,
biomolecules, and green ingredients. A large number of international-scale
R&D projects have already been launched covering the four target markets. A
special relationship has been build up with several international clusters in Canada, Finland, Hungary and elsewhere.

UK

In the UK, the Technology Strategy Board has created an Industrial Biotechnology Special Interest
Group (IB-SIG) to operate across its networks to implement the recommendations
of the 2009 Industrial Biotechnology Innovation and Growth Team[22].

Also in the UK, the “Integrated Biorefining Research and Technology Club (IBTI Club)” was launched in
2009. This group consists of a research and technology partnership involving
the Biotechnology and Biological Sciences Research Council, the Engineering and
Physical Sciences Research Council, Industry and the Bioscience for Business
Knowledge Transfer Network (KTN). The club will interface with the KTN's wider
Integrated Biorefinery Technologies Initiative (IBTI) and will invest around
GBP 6 million in industrially relevant, innovative, basic biological, chemical
and engineering research in biorefining technologies.

Norway

In Norway, an official “Norwegian Industrial Biotech Network[23]”
has been set up mid-2012. The main objective of the Industrial Biotech Network
is to stimulate innovation through partnerships and dissemination of knowledge.
The network will connect academia and industry across research disciplines, industry
sectors and geography. The network is the result of a joint initiative by
Innovation Norway, The Research Council of Norway, and SIVA[24].

In February
2011, a memorandum of understanding was signed between Innovation Norway and
the Technology Strategy Board in the UK. This collaboration agreement intends
to foster transnational collaboration between industries and research
institutions in the area of industrial biotechnology and biorefining. Beginning
of 2012, it was decided to work together to support nine new research and
development projects that will create innovative processes to generate
high-value chemicals through industrial biotechnology and biorefining. The UK
Technology Strategy Board has offered grant funding totalling GBP 1.82 million
to the nine UK-led projects (four full-scale collaborative R&D projects and
five feasibility projects) and four of these will also be supported by
Innovation Norway, which is providing additional funding of GBP 400,000 to the
Norwegian businesses that are taking part. The projects will look at how
industrial biotechnology and/or biorefining can be competitively applied to the
production of high value chemicals and will see collaboration between
industrial biotechnology developers, higher education institutions and the
chemicals sector.

Finland

Also Finland has not yet an official bioeconomy strategy yet, but the authorities are working on
an official strategy. In 2011, SITRA (the Finnish Innovation Fund) prepared a
report “Sustainable Bioeconomy: Potential, Challenges and Opportunities in Finland[25]”. The study
claims that the market for small-scale solutions is large, which provides a
basis for mass-production of bio-economic solutions. The side benefits can be
identified and measured. A fully integrated solution creates a hybrid where
different systems complement each other, thereby increasing the profitability
of the investment. In addition, a system consisting of many small production
plants is highly reliable. Functional modularisation provides economies of scale
and adaptability which can be turned into a business-driven offering. Last but
not least, the capability to develop, design, deliver and operate bioeconomic
solutions can be exported.

Also in Finland, the BioRefine 2007-2012 programme of TEKES has allocated 137 million Euro to the
development of innovative technologies, products and services related to
biorefineries and the processing of biomass in general for the international
market.

Denmark

Denmark has implemented a national bioeconomy strategy, via the 2009
agreement on Green Growth[26].
The purpose of the Agreement is to ensure that a high level of environmental,
nature and climate protection goes hand in hand with modern and competitive
agriculture and food industries. A total of 1.8 billion EUR funding until 2015
is foreseen, which is a 50% increase compared to previous initiatives.

Italy

Since the
launch of the EU Bioeconomy Strategy, the Minister of Economic Development has
set up a working group on green chemistry with the aim of starting at a national
level the elaboration of possible national strategy. In May 2012 the Minister
of Innovation launched a call for implementing clusters focused on top
innovative sectors for the country and one of them is green chemistry.

Ireland

Already in
2008, Ireland published its Foresight Report “Towards 2030 – Teagasc’s Role in
Transforming Ireland’s Agri-Food Sector and the Wider Bioeconomy[27]”. The four
pillars are: food production and processing, value-added food processing,
agri-environmental products and services, and energy and bio-processing. In
addition, in 2009 the Irish High-Level Group on Green Enterprise published
“Developing the Green Economy in Ireland[28]
”. The key actions of the “Green Economy” strategy are:

·
Promote green sectors that drive exports and job
creation (e.g. renewable energy, energy efficiency and management, waste
management, water/wastewater);

·
Deliver green zones and a green international
financial services sector (IFSC[29]);

·
Create world-class research centres and human
capital;

·
Remove hurdles to the development of the green
economy (e.g. technical, regulatory and planning barriers to the
development of renewable energy projects; implementing green public procurement
in Ireland; ensuring that green firms can access finance and developing Ireland’s brand).

Belgium

In Flanders, an interdepartmental working group started first half of 2012 to develop a
regional vision and strategy for the biobased economy. A study was performed to
to support the Government of Flanders in developing its own strategy for a
biobased economy and to draft recommendations for an integrated and sustainable
economic innovation policy. In order to develop this strategy, Flanders’ assets were identified and used as the basis for defining policy choices. Key
objective is to see how Flanders can optimally use its positive starting
position with a strong chemical industry, a limited
(in terms of surface area) but highly intensive agricultural and horticultural
and thus likewise food industry, and a high population density with large and
well-managed waste streams, in the transition to a sustainable biobased
economy.

Annex 7 – Example of a regional bioeconomy cluster
moving up-scaling activities outside the EU[30]

The bio-based industries have a strong
foothold in Bazancourt-Pomacle, in the North-East of France. Driven by a number
of large agricultural cooperatives and well embedded in the strong Industry and
Agro-Resources (IAR) bioeconomy cluster, an impressive site integrating several
biorefineries has developed. The site harbours sugar industry, starch industry,
ethanol production, production of cosmetic ingredients and a cogeneration
plant. A lot of synergies between these activities are being exploited. For
more than 20 years, the cooperatives and industries active on this site have
jointly developed ARD, a research enterprise with approximately 100 employees
now. ARD aims to develop innovation for the bio-based industries and to bring
it to market.

ARD decided in 2008 to build a 2000 tonne
demonstration plant for innovative bio-based processes (BIODEMO). This
represented a total investment of € 22 million of which € 17 million were
privately funded and € 5 million were obtained from public funding (€ 2.5
million regional and € 2.5 million from the European Fund for Regional Development).
This decision was made in the context of a partnership with an American
technology company to develop an innovative process for the production of
bio-based succinic acid, which is an important building block for the chemical
industry. The research was successful. A bio-based manufacturing process was
developed and optimised. It was shown to be economically competitive and to
bring significant sustainability benefits.

Nevertheless, hopes to see the construction
of a flagship type facility at industrial scale on site failed to materialise.
The partners concluded a joint venture with Mitsui & Co. They were
attracted to Ontario (Canada), apparently due to substantial levels of public
funding. The government of this province explains on its website, that it
granted about Canadian $ 35 million in "loans and subsidies" on a
total investment of C$ 80 million. A facility with a projected capacity of
34,000 tonnes bio-based succinic acid is now reported to be under construction
in Sarnia, Ontario. Europe thus misses out on an opportunity to bring the
results of its successful research and demonstration work to commercial
fruition on EU territory.

Annex 8 – Definition of Technology Readiness Levels
(TRLs)

Technology
Readiness Levels (TRLs) are used to define the different research and
innovation (R&I) steps from fundamental research to the commercialisation
of a product. Financing instruments for R&I activities may focus on certain
ranges of TRLs, e.g. Horizon 2020 on TRLs from 1 to 8, see Figure below.

Definition of TRL
levels:

–
TRL 1 Basic principles observed and reported:
Transition from scientific research to applied research.
Essential characteristics and behaviors of systems and architectures. Descriptive
tools are mathematical formulations or algorithms.

–
TRL 2 Technology concept and/or application
formulated: Applied research. Theory and scientific
principles are focused on specific application area to define the concept.
Characteristics of the application are described. Analytical tools are
developed for simulation or analysis of the application.

–
TRL 3 Analytical and experimental critical
function and/or characteristic proof-of concept: Proof
of concept validation. Active Research and Development (R&D) is initiated
with analytical and laboratory studies. Demonstration of technical feasibility
using breadboard or brassboard implementations that are exercised with
representative data.

–
TRL 4 Component/subsystem validation in
laboratory environment: Standalone prototyping implementation
and test. Integration of technology elements. Experiments with full-scale problems
or data sets.

–
TRL 5 System/subsystem/component validation
in relevant environment: Thorough testing of
prototyping in representative environment. Basic technology elements integrated
with reasonably realistic supporting elements. Prototyping implementations
conform to target environment and interfaces.

–
TRL 6 System/subsystem model or prototyping
demonstration in a relevant end-to-end environment (ground or space): Prototyping implementations on full-scale realistic problems. Partially
integrated with existing systems. Limited documentation available. Engineering feasibility
fully demonstrated in actual system application.

–
TRL 7 System prototyping demonstration in an
operational environment (ground or space): System
prototyping demonstration in operational environment. System is at or near
scale of the operational system, with most functions available for
demonstration and test. Well integrated with collateral and ancillary systems.
Limited documentation available.

–
TRL 8 Actual system completed and
"mission qualified" through test and demonstration in an operational
environment (ground or space): End of system
development. Fully integrated with operational hardware and software systems.
Most user documentation, training documentation, and maintenance documentation
completed. All functionality tested in simulated and operational scenarios.
Verification and Validation (V&V) completed.

–
TRL 9 Actual system "mission
proven" through successful mission operations (ground or space): Fully integrated with operational hardware/software systems. Actual
system has been thoroughly demonstrated and tested in its operational
environment. All documentation completed. Successful operational experience.
Sustaining engineering support in place.

Annex 9 – Detailed description of the specific
objectives and link to wider policy context

Specific objectives || Operational objectives/results

Up-scale and validate at demonstration scale entirely new building blocks for the chemical industry produced from biomass of European origin. || By 2020: 5 new building blocks, to be increased to 10 by 2030)

Develop new bio-based materials (e.g. specialty fibres, plastics, composites and packaging solutions), which either substitute existing petro-chemical materials or offer entirely new characteristics and functionalities. || By 2020: 50 new bio-based materials

Demonstrate new, close to the market consumer products (advanced prototypes) that have been enabled by using bio-based chemicals and materials. || By 2020: 30 new consumer products

Set up flagship biorefinery plants for the production of new bio-based materials, chemicals and fuels from the PPP, which have proven to be close to cost-competitive to comparable fossil-based production plants. || By 2020: At least 5 flagship biorefinery plants (at least one per bio-based value chain, see above).

Establish new bio-based value chains, which will integrate players along the whole value chain. They will ensure sufficient supply of sustainable feedstock, develop conversion solutions for the transformation of the biomass, up-scale these conversion processes to commercial scale, develop new bio-based products, and support the uptake of these products by consumer markets. || By 2020: 10 new bio-based value chains

Create new cross-sector interconnections in bioeconomy clusters (new bridges creating cooperation between nine different sectors, i.e. farmers, agrofood industry, horticulture, forestry, pulp and paper, chemicals, pharmaceuticals, materials, fuel/energy)) || By 2020: 36 new cross sector interconnections

Support cooperation projects through cross-industry clusters. || By 2020: >200 projects

The implementation of the specific
objectives of the proposed Bio-based PPP will directly or indirectly contribute
towards reaching a number of strategic medium- to long-term EU policy
objectives.

In an attempt to link its specific
objectives to the policy objectives, industry formulated a number of additional
indicative objectives in the SIRA. These objectives have not been addressed in
the Impact Assessment since they are likely to be subject to change in line
with EU policy developments. Furthermore, their completion will not solely
depend on the PPP's activities and progress would therefore be difficult to
monitor.

Industry objectives || Indicative operational objectives/results

Help to guarantee a secure and sustainable supply of lingo-cellulosic biomass (including waste) for European biorefineries through the development of integrated and sustainable agricultural and forestry value chains ||

Contribute to valorising better currently underutilised or not used agricultural land by improving its utilisation or putting it back into production. ||

Contribute to increasing the current biomass supply in Europe by enhancing productivity and mobilisation in a sustainable manner while making best use of innovations in agriculture and forestry practices. ||

Stimulate the mobilisation and utilisation of currently unused by-products and wastes from various bio-based sources (e.g. agriculture, forestry, waste water treatment, sludge, organic household waste, yard waste, food processing waste, debarking waste). || By 2020: 15% in the total amount of waste used By 2030: 25%

Contribute to maintaining and further developing a competitive and knowledge intensive rural economy in Europe based on biorefineries, which results in new, higher and more diversified revenues to farmers and cooperatives and creating new skilled jobs of which more than 80% will be in rural and today underdeveloped areas || By 2020: up to 400.000 new skilled jobs created by PPP By 2030: 700.000

Contribute to protein isolation and valorisation from additional biomass processing, that will result in 15% reduced import of protein (e.g. soy) for feed in Europe in 2020 (50% by 2030). || By 2020: 15% reduction in protein import for feed By 2030: 50%

Optimise soil fertility programmes including recovery and use of phosphate and potash, leading to reduced import of those components for fertilizers applied to feedstock production. || By 2020: 10% reduction in fertiliser component imports By 2030: 25%

Contribute to and trigger industrial deployment of bio-based chemicals, biomaterials and advanced biofuels, to: ||

· Increase the share of bio-based production of chemicals and materials in Europe. The share today is of 10% || By 2020: 20% By 2030: 30%

· Ensure that there is a share of sustainable advanced biofuels in European fuel mix. || By 2020: 2% By 2030: 25%

· Realise first-of-their-kind flagship plants to optimise biomass conversion technology and ensure price-competitiveness for a second wave of commercial production to kick-in. || From 2017: 5 flagship plants

Contribute to the ambition that in 2020, the market supplied by bio-based polymers and composites at comparable quality-price ratio compared to the fossil alternatives will be 5 times higher than today (factor 10 in 2030. || By 2020: 5x higher market supplied By 2030: 10x

Annex 10 – Examples illustrating the potential
socio-economic impact of a option i-PPP

1.           Examples
of flagship biorefinery plants from the SIRA (see Annex 3) [31]

Example
1: Direct economic impact of a successful flagship biorefinery plant processing
1.3 million tonnes of forest material (value chain 2)

Outputs: High
value fibers for textiles, bio-plastics, green power

Projected annual turnover: € 176 million

Projected annual feedstock cost: € 64 million, i.e. € 50 million revenue to primary
 producers and € 14 million transport costs

Jobs
(recurring): 440

Example
2: Direct economic impact of a successful flagship biorefinery plant processing
1 million tonnes of biomass (value chain 5)

Investment: € 120 million

Outputs: Green power, cellulose fibers,
chemicals.

Projected annual turnover: € 145 million

Projected annual feedstock costs: € 100 million, i.e. € 80 million revenue to primary producers and
€ 20 million transport cost.

Jobs (recurring): 35

2.           EU
annual economic potential for advanced bioethanol through replication of a
successful bio-ethanol flagship plant

Feedstock: 225 million tonnes of
agricultural & forestry residues and biomass fractions of municipal waste,
sustainably mobilised.

Output: 75 billion litres of ethanol
(energy equivalent of 10 % of current EU transport energy consumption).

Trade balance impact: Savings in EU
gasoline importation of € 26 billion.

Infrastructure: 788 biorefineries across
the EU (near biomass sources), representing a total investment of € 74 billion.

Jobs: 124.000 (peak associated with
construction of biorefineries) levelling off to 87.000 in residue collection,
transport to biorefinery and biorefinery operations

Farmer revenue potential: € 15 billion

3.           Social
impact of competitiveness in the bio-based segment of the chemical industry

European chemical industry in 2010 realised
total sales of € 491 billion[32].
Extrapolating from total sectoral employment, bio-based chemical sales of € 50
billion can be estimated to involve 120.000 direct and 340.000 total jobs. The
vision paper prepared by the industry group backing the Bio-based PPP aims to
increase the share of bio-based chemicals from 10 to 30 % by 2030.

These basic Figures help to define a key
challenge for the EU chemical industry: How to be a leader in the high growth
bio-based segment, creating jobs in Europe to transform biomass grown in Europe into high-added value products with good prospects on the global markets. From 2011
to 2030, 20 % of the chemical industry business, corresponding today to some €
100 billion in revenue, will shift from fossil-based to bio-based. It is
crucial for the competitiveness of the EU chemical industry to develop a
position of strength in this market segment in order to maintain or grow its
share in the domestic and global markets. Over the period from now to 2030, the
difference between a position of leadership or a position of relative weakness
will obviously have a major impact on the EU chemical industry's revenue and
employment.

The impact on EU agriculture and forestry
will also be substantial. Feedstock costs in a typical biorefinery are
estimated to amount to between 25 and 40 % of final product value[33]. Taking 25 %
of an estimated € 100 billion new bio-based product market value in 2030 (at
2010 prices) would then imply feedstock costs of € 25 billion. Allowing 20 % of
this amount for transportation and logistics of the biomass supply chain, this
could well represent around € 7.5 billion in revenue potential for EU farmers
and foresters. This corresponds to >1 % of the total 2010 revenue for
agriculture and forestry/wood combined and to >12 % of the support level
provided by the EU's Common Agricultural Policy (with a total cost of € 55
billion).[34]

Annex 11 – Bibliography of the Impact Assessment

EU documents:

·
European Court of Auditors (2013) Special Report
2: Has the Commission ensured efficient implementation of the Seventh Framework
Programme for Research?
http://eca.europa.eu/portal/pls/portal/docs/1/22482779.PDF

·
MEMO/12/989
http://europa.eu/rapid/press-release\_MEMO-12-989\_en.htm

·
DG COMP Seminar on State Aids January 2013

·
COM(2012) 710 – Decision on a General Union
Environment Action Programme to 2020 “Living well, within the limits of our
planet”
http://ec.europa.eu/environment/newprg/pdf/7EAP\_Proposal/en.pdf

·
COM(2012) 595 – Amending Directive 98/70/EC
relating to the quality of petrol and diesel fuels and amending Directive
2009/28/EC on the promotion of the use of energy from renewable sources
http://ec.europa.eu/clima/policies/transport/fuel/docs/com\_2012\_595\_en.pdf

·
COM(2012) 582 – Communication “A Stronger
European Industry for Growth and Economic Recovery”
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0582:FIN:EN:PDF

·
COM(2012) 79 – Communication “on the European
Innovation Partnership 'Agricultural Productivity and Sustainability' ”
http://ec.europa.eu/agriculture/eip/pdf/com2012-79\_en.pdf

·
COM(2012) 60 – Communication “Innovating for
Sustainable Growth: A Bioeconomy for Europe”
http://ec.europa.eu/research/bioeconomy/pdf/201202\_innovating\_sustainable\_growth.pdf

·
SWD(2012)11 – Commission staff working document
accompanying the COM(2012)60, "Communication on Innovating for Sustainable
Growth: A Bioeconomy for Europe"
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2012:0011:FIN:EN:PDF

·
CDR1112-2012 – Working Document of the
Commission for Education, Youth, Culture and Research " Innovating for
Sustainable Growth: A Bioeconomy for Europe "
http://cor.europa.eu/en/activities/stakeholders/Documents/working-document-educ-v-024.pdf

·
DG RTD (2012) Roadmap for a Joint Technology
Initiative in the field of Bio-based industries
http://ec.europa.eu/governance/impact/planned\_ia/docs/2013\_rtd\_007\_biobased\_industries\_en.pdf

·
DG REGIO (2012) Connecting Smart and Sustainable
Growth through Smart Specialisation: A practical guide for ERDF managing
authorities http://ec.europa.eu/regional\_policy/sources/docgener/presenta/green\_growth/greengrowth.pdf

·
Public Consultation on "Bio-based
industries, towards a public-private partnership under Horizon 2020?"
http://ec.europa.eu/research/consultations/bio\_based\_h2020/consultation\_en.htm

·
Conference “Partnering for the Bioeconomy in
European Regions” co-organised by DG RTD and the Committee of the Regions (CoR)
on 12 October 2012 at the CoR, Brussels Belgium
www.eurosfaire.prd.fr/.../1347636965\_designed\_programme\_14\_se...

·
COM(2011) 809 – Proposal for a regulation
establishing Horizon 2020 “The Framework Programme for Research and Innovation
(2014-2020) ”
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0809:FIN:en:PDF

·
COM(2011) 808 – Communication “Horizon 2020 -
The Framework Programme for Research and Innovation”
http://ec.europa.eu/research/horizon2020/pdf/proposals/com(2011)\_808\_final.pdf

·
COM(2011) 572 – Communication “Partnering in
Research and Innovation”
 http://ec.europa.eu/research/era/pdf/partnering\_communication.pdf

·
COM(2011) 244 – Communication “Our life
insurance, our natural capital: an EU biodiversity strategy to 2020”
http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/2020/1\_EN\_ACT\_part1\_v7[1].pdf

·
COM(2011) 112– Communication “A Roadmap for
moving to a competitive low carbon economy in 2050”
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0112:FIN:en:PDF

·
SEC(2011) 1427 – Impact Assessment Accompanying
the Communication from the Commission “ Horizon 2020 - The Framework Programme
for Research and Innovation”
http://www.europarl.europa.eu/registre/docs\_autres\_institutions/commission\_europeenne/sec/2011/1427/COM\_SEC(2011)1427\_EN.pdf

·
Public consultation “Bio-based economy for Europe: state of play and future potential” from 22 February to 2 May 2011
http://ec.europa.eu/research/consultations/bioeconomy/consultation\_en.htm

·
DG RTD Expert Group (2011) First interim
evaluation of the Fuel Cell and Hydrogen JU, Expert Group Report 24862
http://www.gppq.fct.pt/\_7pq/\_docs/brochuras/online/EvalFuelCellHydroReport2011\_ALLBROCHUREWEB.pdf

·
DG RTD Expert Group (2011) First interim
evaluation of the Fuel Cell and Hydrogen JU, Expert Group Report 24862

·
European Industrial Bioenergy Initiative (EIBI)
(2011) “Boosting the contribution of Bioenergy to the EU climate and energy
ambitions Implementation Plan 2010 – 2012”
http://ec.europa.eu/energy/technology/initiatives/doc/implementation\_plan\_2010\_2012\_eii\_bioenergy.pdf

·
DG ENER (2011) Key Figures – Market Observatory
for Energy – June 2011

·
Eurostat (2011) http://epp.eurostat.ec.europa.eu/statistics\_explained/index.php/Climate\_change\_statistics

·
Designing together the “ideal house’ for
public-private partnerships in European research JTI Sherpas” Group Final
Report 2010
http://ec.europa.eu/invest-in-research/pdf/workshop/amanatidou\_h2.pdf

·
DG RTD (2010) Biotechnologies panel report, Food
Agriculture and Biotechnology 25/02/2011 prepared in the context of the impact
assessment of Framework Programme Activities in FAFB.

·
DG RTD Expert Group (2010) Interim Evaluation of
the Seventh Framework Programme
http://ec.europa.eu/research/evaluations/pdf/archive/other\_reports\_studies\_and\_documents/fp7\_interim\_evaluation\_expert\_group\_report.pdf

·
DG ENTR (2009) Taking Bio-based from Promise to
the Market – A report from the Ad-hoc Advisory Group for Bio-based Products in
the framework of the European Commission’s Lead Market Initiative
http://ec.europa.eu/enterprise/sectors/biotechnology/files/docs/bio\_based\_from\_promise\_to\_market\_en.pdf

·
Directive 2009/30/EC amending Directive 98/70/EC
as regards the specification of petrol, diesel and gas-oil and introducing a
mechanism to monitor and reduce greenhouse gas emissions and amending Council
Directive 1999/32/EC as regards the specification of fuel used by inland
waterway vessels and repealing Directive 93/12/EEC
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0088:0113:EN:PDF

·
Directive 2009/28/EC on the promotion of the use
of energy from renewable sources and amending and subsequently repealing
Directives 2001/77/EC and 2003/30/EC
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=Oj:L:2009:140:0016:0062:en:PDF

·
COM(2008) 468 – Communication vers une
programmation conjointe de la recherche “Travailler ensemble pour relever plus
efficacement les défis communs”
http://ec.europa.eu/research/press/2008/pdf/com\_2008\_468\_fr.pdf

·
COM(2007) 860 – Communication “A lead market
initiative for Europe”
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0860:FIN:en:PDF

·
FP7 Ex-ante Impact Assessment (SEC(2005)430)
http://cordis.europa.eu/documents/documentlibrary/72661491EN6.pdf

·
Directive 2003/30/EC
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:123:0042:0042:EN:PDF

Other documents:

·
BIC (2012) Biobased for Growth – A
public-private partnership on biobased industries http://www.biobasedeconomy.nl/wp-content/uploads/2012/07/Bio-Based-Industries-PPP-Vision-doc

·
Bloomberg New Energy Finance (2010) Next-generation
ethanol and biochemicals: What's in it for Europe
http://www.novozymes.com/en/sustainability/benefits-for-the-world/biobased-economy/white-papers-on-biofuels/Documents/2010%20-%20Bloomberg%20-%20Next-generation%20ethanol%20and%20biochemicals%20what's%20in%20it%20for%20Europe.pdf

·
Burill & Company (2012) Biotech 2012:
Innovating in the New Austerity; Burill & Company's 26th Annual Report on
the Life Science Industry
http://www.burrillandco.com/content/news/PR-April%202012-final.pdf

·
CEFIC (2012) The European chemical industry in
worldwide perspective Facts and Figures 2012
http://www.cefic.org/Documents/FactsAndFigures/2012/Facts-and-Figures-2012-The-Brochure.pdf

·
CEFIC (2011) Annual Report 2011 “The chemical
industry in Europe: Towards Sustainability”
http://www.cefic.org/Documents/Learn%20and%20Share/Cefic\_Sutainability\_Report2011-2012.pdf

·
Coyle, W. (2010) The Future of Biofuels: A
Global Perspective, Economic Research Service, USDA
http://aoatools.aua.gr/pilotec/files/bibliography/Future%20of%20Biofuels-0572659200/Future%20of%20Biofuels.pdf

·
Dalberg (2011) Biorefinery Feasibility Study
http://www.europabio.org/industrial/press/bridging-gap-between-research-and-market

·
EPO (2012) Analysis of EPO data on industrial
biotechnology patents provided by Novozymes

·
Festel, G. (2011) Presentation at the 4th Annual
European Forum for Industrial Biotechnology & The Biobased Economy, Amsterdam, 20 October 2011
www.efibforum.com/Core/DownloadDoc.aspx?documentID=9007

·
Futuris (2012) Supporting the set-up of
industrial demonstrators in Europe - Position paper

·
Hermann, Blok and Patel, Producing Bio-based
bulk chemicals. Using industrial biotechnology saves energy and combats climate
change. Environ. Sci. Technol. 2007, 41, 7915-7921
http://igitur-archive.library.uu.nl/chem/2008-0416-200513/NWS-E-2007-187.pdf

·
Inman, M. (2013) The true cost of fossil fuels,
Scientific American, April 2013

·
Mantau, U. (2012) Wood Flows in Europe
www.cepi.org/system/.../2012/CEPIWoodFlowsinEurope2012.pdf

·
McKinsey (2009)
http://www.dsm.com/en\_US/downloads/sustainability/white\_biotech\_mckinsey\_feb\_2009.pdf

·
OECD (2011) Industrial Biotechnology and Climate
Change: Opportunities and Challenges
http://www.oecd.org/sti/biotech/49024032.pdf

·
OECD (2009) The bioeconomy to 2030: Designing a
Policy Agenda
http://www.oecd.org/futures/long-termtechnologicalsocietalchallenges/42837897.pdf

·
Star-Colibri (2011) Joint European Biorefinery
Vision for 2030
http://www.star-colibri.eu/files/files/vision-web.pdf

·
USDA BioPreferred Program www.biopreferred.gov

·
WEF (2010) The future of Industrial
Biorefineries
http://www3.weforum.org/docs/WEF\_FutureIndustrialBiorefineries\_Report\_2010.pdf

·
WWF (2009) http://wwf.panda.org/?174201/Biotechnology-could-cut-C02-sharply-help-build-green-economy

·
WWF(2009) Industrial Biotechnology: More than
green fuel in a dirty economy
http://www.bio-economy.net/reports/files/wwf\_biotech.pdf

·
Wit and Faaij (2010) Biomass and Bioenergy
http://ac.els-cdn.com/S0961953409001457/1-s2.0-S0961953409001457-main.pdf?\_tid=ce18d5fa-9164-11e2-a05c-00000aacb361&acdnat=1363787471\_aa7b26e16c05b3214bd061d090157b9a

[1]               Estimating the environmentally compatible bioenergy
potential from agriculture EEA Technical Report No 12/2007 How much bioenergy can Europe produce without
harming the environment?          
EEA Report No 7/2006

[2]               Respondents who chose the residual category, i.e.
“Other”, could specify their answers with a textual comment. The content
analysis allowed to re-classify the open answers Into one of the four
categories. The same criterion has been adopted for the re-categorization of
the professional field.

[3]               Plans available under
http://ec.europa.eu/energy/renewables/transparency\_platform/action\_plan\_en.htm

[4]               Bio‐based Economy in the EU-­‐27: A first quantitative assessment of biomass
use in the EU industry; nova-Institut, August 2012.

[5]               According to Wood Flows in Europe (U. Mantau) 577.1
million m3 of wood resources are used in the EU (estimated to correspond to
appr. 450 million tonnes) ; with 36 % used for energy applications, 18,7 % for
pulp and paper and 45,2 % for the woodworking industry.

[6]               See
e.g. Global wood chip trade for energy Lamers et al. 2012 – IEA Task 40

[7]               Appr. 57 % out of a total
renewable energy production of 150 Mtoe.

[8]               http://www.biooekonomierat.de

[9]               BÖR (2010). Bio-economy
Innovation: Research and technological development to ensure food security, the
sustainable use of resources and competitiveness. Bio-Economy Research and Technology Council. ISBN 978-3-942044-03-5.
http://bioeconomy.dk/bioeconomyinnovationreport2010.pdf

[10]             BÖR (2009). Combine
disciplines, improve parameters, seek out international partnerships. First
recommendations for research into the bio-economy in Germany. Bio-Economy
Research and Technology Council. ISBN 978-3-942044-16-5. http://bioeconomy.dk/GermanBioeconomyCouncil\_RecommendationsNo.1.pdf

[11]             BÖR, (2011). Priorities in
Bio-economic Research. Recommendations of the Bio-economy Council.
Bio-Economy Research and Technology Council. ISBN 978-3-942044-20-2. http://bioeconomy.dk/GermanBioeconomyCouncil\_Recommendations\_No2.pdf

[12]             BÖR, (2012). Nachhaltige Nutzung von Energie aus
Biomasse im Spannungsfeld von Klimaschutz, Landschaft und Gesellschaft. Bio-Economy Research and Technology Council. http://www.bioenergie.uni-goettingen.de/fileadmin/user\_upload/admin/PR/Bioenergie2011Projekt-lowres.pdf

[13]             BMELV (2009). Aktionsplan der Bundesregierung zur
stofflichen Nutzung nachwachsender Rohstoffe. Bundesministerium für
Ernährung, Landwirtschaft und Verbraucherschutz. http://www.bmelv.de/SharedDocs/Downloads/Broschueren/AktionsplanNaWaRo.pdf?

[14]             http://www.clib2021.de

[15]             http://www.biom-wb.de

[16]             http://www.biotechnologie2020plus.de

[17]             Dutch Cabinet (2021). Hoofdlijnennotitie
Biobased Economy. Kamerstuk 02-04-2012, EL&I.

[18]             Innovatiecontract Biobased Economy 2012-2016 (2012). Groene
groei: van biomassa naar business.
http://www.biobasedeconomy.nl/wp-content/uploads/2012/04/7250-ELI-Innovatierapport-aanpv3.pdf

[19]             http://www.be-basic.org

[20]             FORMAS (2012). Swedish Research and Innovation
Strategy for a Biobased Economy. The Swedish Research Council for
Environment, Agricultural Sciences and Spatial Planning. ISBN
978-91-540-6068-9. http://bioeconomy.dk/Sweden\_Strategy\_Biobased\_Economy.pdf

[21]             http://www.iar-pole.com

[22]             IB- IGT (2009). IB 2025:
Maximising UK Opportunities from Industrial Biotechnology in a Low Carbon
Economy. Industrial Biotechnology Innovation and
Growth Team. http://www.berr.gov.uk/files/file51144.pdf

[23]             http://www.indbiotech.no

[24]             Industrial Biotech Network Norway (2012). Virksomhetsplan for Industrial Biotechnology Network Norway (Network Vision and Strategy). http://www.indbiotech.no/sites/default/files/Virksomhetsplan%20Norwegian%20Industrial%20Biotech%20Network%20ver10juni12%20%282%29.pdf

[25]             http://www.sitra.fi/julkaisut/Selvityksi%C3%A4-sarja/Selvityksi%C3%A4%2051.pdf

[26]             http://www.mim.dk/NR/rdonlyres/54887891-D450-4CD7-B823-CD5B12C6867A/0/DanishAgreementonGreenGrowth\_300909.pdf

[27]             TEAGASC (2008). Towards 2030.
Teagasc's Role in Transforming Ireland's Agri-Food Sector and the Wider
Bioeconomy (Foresight Report). http://www.teagasc.ie/publications/2008/20080609/ForesightReportVol1.pdf

[28]             FORFAS (2009). Developing
The Green Economy In Ireland. High-Level Group on Green Enterprise. http://www.forfas.ie/media/dete091202\_green\_economy.pdf

[29]             http://www.ifsc.ie

[30]             Information provided by the Industry and Agro-Resources
(IAR) bioeconomy cluster

[31]             Note: These figures have been provided by the BIC.

[32]             CEFIC (2011) Annual Report 2011.

[33]             Dalberg (2011) Biorefinery Feasibility Study

[34]             Note: These figures are estimates based on information
from the BIC.

[Top](#document1)