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# 52012SC0011

**COMMISSION STAFF WORKING DOCUMENT /\* SWD/2012/0011 final \*/**

  

TABLE OF CONTENTS

COMMISSION STAFF WORKING DOCUMENT.................................................................. 5

Introduction.................................................................................................................................. 5

1........... Aim of the Staff Working
Document................................................................................ 5

2........... The bioeconomy in Europe............................................................................................. 5

3........... Process, consultation and
preparation.............................................................................. 7

4........... The Bioeconomy Strategy and
Action Plan.................................................................... 11

Section A – Background to the Bioeconomy
Strategy and Detailed Action Plan........................... 12

1........... Background to the Bioeconomy
Strategy for Europe..................................................... 12

1.1........ Investments in research,
innovation and skills................................................................. 12

1.1.1..... Research and innovation funding.................................................................................... 12

1.1.1.1.. Horizon 2020............................................................................................................... 13

1.1.2..... Leadership in biosciences.............................................................................................. 14

1.1.3..... Implement multidisciplinary
education programmes across the EU.................................. 14

1.1.4..... Increasing opportunities for high-
and low-skilled labour forces...................................... 14

1.2........ Reinforced policy interaction and
stakeholder engagement............................................. 15

1.2.1..... Creating a favourable environment
for the bioeconomy: policy coherence and cross-sectoral interaction            15

1.2.2..... Policy coherence.......................................................................................................... 15

1.2.3..... Improved policy interactions......................................................................................... 16

1.2.4..... Engaging society, reaching
end-users and linking with policy makers............................... 17

1.2.5..... Regional approaches..................................................................................................... 18

1.2.6..... International cooperation for a
global bioeconomy......................................................... 18

1.2.7..... Social innovation........................................................................................................... 19

1.3........ Policy implementation and
enhancement of markets in the main bioeconomy sectors....... 19

1.3.1..... Agriculture and forestry................................................................................................. 19

1.3.1.1.. Land use and the transition towards
more sustainable production................................... 20

1.3.1.2.. Agriculture and climate change...................................................................................... 20

1.3.1.3.. Livestock production.................................................................................................... 21

1.3.1.4.. Forestry....................................................................................................................... 21

1.3.1.5.. Policies and public goods.............................................................................................. 22

1.3.1.6.. Agricultural advisory and support
services, extension services........................................ 22

1.3.2..... Fisheries and aquaculture.............................................................................................. 23

1.3.2.1.. Sustainable fisheries...................................................................................................... 24

1.3.2.2.. Sustainable aquaculture................................................................................................. 24

1.3.2.3.. Marine biotechnology................................................................................................... 24

1.3.3..... Bio-based industries..................................................................................................... 24

1.3.3.1.. Biorefineries................................................................................................................. 25

1.3.3.2.. Waste as an alternative biomass
source......................................................................... 26

1.3.3.3.. Biotechnologies............................................................................................................ 27

1.3.3.4.. Bio-based products...................................................................................................... 28

1.3.4..... Food chain................................................................................................................... 29

1.3.4.1.. Resource efficiency....................................................................................................... 30

1.3.4.2.. Food waste.................................................................................................................. 30

1.3.4.3.. Packaging..................................................................................................................... 31

1.3.4.4.. Food safety.................................................................................................................. 31

1.3.4.5.. Nutrition and dietary choices......................................................................................... 32

2........... The bioeconomy action plan for
Europe........................................................................ 33

2.1........ Investment in research,
innovation and skills................................................................... 33

2.2........ Reinforced policy interaction and
stakeholder engagement............................................. 35

2.3........ Enhancement of markets and
competitiveness in bioeconomy sectors............................. 37

Section B - Estimating the impact of EU level
research funding and better policy interaction in Bioeconomy         40

1........... The justification for EU action....................................................................................... 40

1.1........ A common view and a global answer
for the main challenges......................................... 40

1.2........ Overall economic added value in a
single market........................................................... 40

1.3........ A stronger EU commitment........................................................................................... 41

1.4........ The benefits of EU research and
innovation................................................................... 41

2........... Scenarios..................................................................................................................... 42

3........... Comparing the policy scenarios..................................................................................... 43

3.1........ How the options were compared.................................................................................. 43

3.2........ Comparison by criteria.................................................................................................. 44

3.2.1..... Policy interaction potential............................................................................................. 44

3.2.2..... Innovation performance of
scenarios............................................................................. 44

3.2.3..... Strengthening "public
good" policy................................................................................. 46

3.2.4..... Sustainability................................................................................................................. 46

3.2.4.1.. Environmental impacts.................................................................................................. 46

3.2.4.2.. Social impacts.............................................................................................................. 47

3.2.4.3.. Economic impacts......................................................................................................... 48

3.3........ Comparing and choosing the
Scenarios......................................................................... 49

COMMISSION
STAFF WORKING DOCUMENT

Accompanying the document

Communication on

Innovating for Sustainable Growth:
A Bioeconomy for Europe

Introduction

1.
Aim of the Staff Working Document

The present Staff Working Document
accompanies the Communication from the European Commission to the European
Parliament, the Council, the Economic and Social Committee and the Committee of
the Regions on "Innovating for sustainable growth: A bioeconomy for Europe"
(hereafter "the Communication"). The Communication presents a
Bioeconomy Strategy and Action Plan whose goal is to emphasise the importance
of the bioeconomy for Europe in addressing major societal and economic
challenges and to create a more favourable environment for its realisation.

The Staff Working Document presents in
Section A some background information, supporting facts and concrete examples
that demonstrate the critical importance of the Bioeconomy Strategy to address
the significant societal and economic challenges that Europe needs to overcome.
It is complemented by a more detailed version of the Bioeconomy Action Plan
that aims at implementing this ambition. Section B of the Staff Working Document
presents some scenarios based on Horizon 2020 and reinforced policy interaction
arising from the Bioeconomy Strategy..

2.
The bioeconomy in Europe

The bioeconomy encompasses the production
of renewable biological resources and their conversion into food, feed,
bio-based products[1]
and bioenergy. It includes agriculture, forestry, fisheries, food and pulp and
paper production, as well as parts of chemical, biotechnological and energy
industries. Its sectors have a strong innovation potential due to their use of
a wide range of sciences (life sciences, agronomy,
ecology, food science and social sciences), enabling and industrial
technologies (biotechnology, nanotechnology,
information and communication technologies (ICT), and engineering), and
local and tacit knowledge.

Based on available data from a wide range
of sources it is estimated that the European bioeconomy has an annual turnover
of about € 2 trillion and employs more than 22 million people and approximately
9% of the total EU workforce[2]
(see Table 1). With more than 80% of its land covered
by farms or forests and maritime areas supporting fisheries of global
significance, the EU is largely self-sufficient for many farm, forest and some
sea products. The EU also has a strong innovation potential arising from an
excellent science and technology base, which has given rise to many
well-established and world-leading food, pulp and paper, chemical and
petrochemical industries.

Table 1: The bioeconomy in the European
Union[3]

Sector || Annual turnover (billion €) || Employment (thousands) || Data source

Food || 965 || 4400 || CIAA

Agriculture || 381 || 12000 || COPA-COGECA, Eurostat

Paper/Pulp || 375 || 1800 || CEPI

Forestry/Wood ind. || 269 || 3000 || CEI-BOIS

Fisheries and Aquaculture || 32 || 500 || EC\*\*\*

Bio-based industries || || ||

 Bio-chemicals and plastics || 50 (estimation\*) || 150 (estimation\*) || USDA, Arthur D Little, Festel, McKinsey, CEFIC

 Enzymes || 0.8 (estimation\*) || 5 (estimation\*) || Amfep, Novozymes, Danisco/Genencor, DSM

 Biofuels || 6\*\* || 150 || EBB, eBio

Total || 2078 || 22005 ||

\*Estimation for Europe for 2009;
\*\*Estimation based on a production of 2.2 million tonnes bioethanol and 7.7
million tonnes of biodiesel at average market price in Europe; \*\*\*EC, Facts and
figures on the CFP, Basic Statistics Data, ISSN 1830-9119, 2010 Edition

3.
Process, consultation and preparation

The idea to consider, in a common context, various
sectors of the economy that produce, process and reuse renewable biological resources
has been discussed in Europe since the middle of the last decade. In 2005, the
UK Presidency of the EU organised with the Commission a conference on the
knowledge-based bioeconomy under the slogan “Transforming life sciences
knowledge into new, sustainable, eco-efficient and competitive products”. The
German Presidency supported this initiative and hosted in 2007 a conference
entitled “En Route
to the Knowledge-Based Bio-Economy”, where the Cologne Paper[4] was presented, a document prepared by
experts from both academia and industries and outlining a perspective for the
bioeconomy in Europe within the next 20 years.

On 13-14th of September 2010, the Belgian
Presidency, in cooperation with the Commission, hosted the conference on
"The knowledge based bio-economy towards 2020", the conclusions of
which have "highlighted the importance of the European bio-economy
today", "concluded that the EU has core strength in research in the
biological sciences", and "confirmed the strong commitment of all
stakeholders to build the European bio-economy for bringing the bio-economy to its
full potential, but through practical and concrete actions which will make a
difference to businesses and the way we lead our lives"[5].

These conclusions have urged the Commission
to prepare a Communication to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions entitled "Innovating
for Sustainable Growth: a Bioeconomy for Europe", as one of the
operational proposals of the Europe 2020 Strategy and its flagship initiative "An
Innovation Union", also contributing to other flagships, such as “A
Resource Efficient Europe”[6],
“An industrial policy for the globalisation era” and “An agenda for new skills
and jobs”. The Multi-annual Financial Framework for 2014-2020[7], and some of its key proposals,
such as Horizon 2020 and the Common Agricultural Policy (CAP) post-2013, duly
take into account the bioeconomy.

Many sources inspired the preparation of
the Communication "Innovating for Sustainable Growth: a Bioeconomy for
Europe" and this accompanying Staff Working Document. They build on a
number of important, recently published foresight reports, which call for
ambitious approaches incorporating and integrating all scientific disciplines
of the bioeconomy to address major societal challenges at European and global
level. Reports include, among others: “The Bioeconomy to 2030” by the
Organisation for Economic Co-operation and Development (OECD)[8], the World Wildlife Fund (WWF)
report on industrial biotechnology[9],
the report on the future of industrial biorefineries by the World Economic Forum
(WEF)[10],
the French "Agrimonde" study[11],
the British study on the future of food and farming[12], the 3rd foresight report of
the Standing Committee on Agricultural Research (SCAR)[13], the BECOTEPS final report[14] and KBBE-Net analyses. It has
also taken stock of the increasing number of bioeconomy initiatives launched at
Member States level, e.g. in Germany[15],
the Netherlands[16],
Finland[17],
France, Belgium and Sweden (non-exhaustive list).

The results of ex-post evaluations of projects
funded under past and the current Framework Programme for Research and
Technological Development, i.e. FP5, FP6 and FP7, in the field of Food,
Agriculture and Fisheries and Biotechnology have been another important source
of information, as they describe the achievements and shortcomings of European
funded research and innovation in the bioeconomy. Furthermore, two independent
experts groups have produced crucial background information on the social,
environmental and economic impacts of the bioeconomy, as well as on skills. The
latter were identified as a key element to support the development of the
bioeconomy in Europe. Finally, Commission services have benefited from the
support of an expert review group to assess the expected impacts of different
policy options to support the development of the bioeconomy in Europe.

In order to gather information and opinions
from stakeholders and civil society, the public consultation “Bio-based economy
for Europe: state of play and future potential”[18] was open from 22 February to 2
May 2011. It consisted of a series of multiple-choice and semi-open questions,
designed to collect views of stakeholders active in the field and of public at
large on the benefits, risks and concerns and potential of the bioeconomy today
and in the future. It further sought to gather their opinions on future
directions for policy interactions, research and innovation actions, actions in
relation to the promotion of bio-based industries and the involvement of the
public.

About 200 replies were received from the private
sector (42%), the academic sector (33%), the public sector (14%) and NGOs (11%).
Respondents also represented a wide range of economic sectors, mainly
agriculture (34%), environment (20%), food and feed (20%), industrial
biotechnology (16%), but also energy and biofuels, forestry, socio-economics,
chemicals, health, fisheries and aquaculture, transport, and others.
Respondents to the public consultation thus covered the main sectors of the
bioeconomy. Two independent experts assisted in providing quantitative and
qualitative analysis of the results of the public consultation and in outlining
main opinion trends.

·
Optimism over the potential of the bioeconomy
to address key challenges…

The outcome of the public consultation showed
that most respondents were optimistic over the potential benefits of the
bioeconomy. The main benefits perceived achievable in the short term were
reducing waste and pollution (73%), providing agricultural advisory services
and/or knowledge transfer systems to farmers (66%) and increasing the uses of
bio-waste and other waste streams (64%). It is important to observe that
respondents from public (61%) and private sector (51%) were more optimistic
over the short term benefits of the bioeconomy than academic sector (43%) or
NGOs (45%), which have a high share of respondents cautious over the
perspective for the bioeconomy (23%).

·
… but concerns related to risks associated to
the bioeconomy's expansion

Despite being mainly optimistic, an
important share of respondents (48%) perceived high risks in the development of
the bioeconomy. The main concerns were that food security and resources in
developing countries were put under pressure because of increased production
for non-food use (80%); natural resources were overexploited and biodiversity
decreased (70%); and deforestation increased due to food and non-food
production (63%). Opinions differed according to sectors of respondents; NGOs
(73%) and academic (54%) sectors believed that high risks were related to the
expansion of the bioeconomy, while public (46%) and private (38%) sectors tended
to minimise them. In terms of professional fields, while respondents from
industrial biotechnology were the only ones perceiving more frequently low
risks than high risks, an overwhelming majority of respondents from the
forestry sector (66%) perceived mainly high risks.

·
Necessity of developing a coherent policy
framework for bioeconomy

·
The involvement of a wide range of policies was
considered necessary to support the bioeconomy: Research and innovation (92%),
agriculture and rural development (86%), environment (83%), energy (80%),
industry (71%), and climate change (67%) are perceived as very important to
foster the development of the bioeconomy.

·
Barriers at EU and national levels prevent
the efficient development of a European bioeconomy today

Respondents observe that barriers hindering
the development of the bioeconomy exist at both EU and national levels (77%),
or mainly at EU level (9%). The main barriers perceived at both EU and national
levels are the insufficient links between decision makers and stakeholders from
the bioeconomy (76%), and the insufficient links between policies related to
the bioeconomy (73%).

·
The development of the bioeconomy requires
action at both EU and national levels

The outcome of the public consultation
shows that respondents request that action be taken at both EU and national
levels. This concern is fully taken into consideration in the Bioeconomy Strategy
and Action Plan, which set up objectives to aim at and actions to take at both
EU and Member States' levels. According to the respondents, the main actions
required at both EU and national levels are:

·
A coherent framework for effective policy
interactions and coordination:

–
Strengthen links between existing funding instruments
for the promotion of the bioeconomy (80%)

–
Provide a coordination mechanism for all
relevant policy portofolios related to the bioeconomy (78%)

·
Research actions necessary to implement the
European bioeconomy:

–
Support research into industrial applications
(78%)

–
Foster industrial involvement in research and
innovation projects (77%)

·
Support to bio-based markets, economic growth
and sustainable employment:

–
Improve access to finance for research and
innovation (82%)

–
Propose incentives for industries trying to take
innovative bio-based products to market (73%)

·
Better engagement of society and foster social
innovation in the bioeconomy:

–
Enhance actions related to communication and
dissemination of information on the advantages and risks of the bioeconomy (77%)

–
Improve information on bio-based products for
consumers (71%)

Overall, respondents were confident on the
potential benefits of a European strategy for a sustainable bioeconomy (44%
strongly, and 42% moderately). Strongest agreement is on the advantages of
securing a sufficient supply of food and biomass (57% strongly agree),
developing integrated, sustainable agricultural, aquatic and ecosystem services
(43%), and fostering the move towards a zero waste society (43%). However,
analysis of the results of the public consultation and of the 35 position
papers received show that NGOs tend to support a definition of the bioeconomy
more public goods-oriented, using natural inputs, expanding minimum amounts of
energy, and producing minimum amounts of waste.

An analysis of position papers received on
the public consultation on the EU Framework Programme for Research and
Innovation from the bioeconomy sector provided also useful indication on the
public request to engage more with society and to support Small and Medium
Enterprises efforts in research and innovation. Respondents underline that
primary objective of the bioeconomy should be to ensure food security, to
mitigate and adapt to climate change and to preserve natural resources.

4.
The Bioeconomy Strategy and Action Plan

The Bioeconomy Strategy through its Action
Plan strives to address the issues highlighted during the public consultation
and in discussion with various stakeholders. It aims to pave the way to a lower
emission, resource efficient and competitive society that reconciles food
security with the sustainable use of renewable resources for industrial
purposes and environmental protection.

Section A – Background
to the Bioeconomy Strategy and Detailed Action Plan

Section
A of this Staff Working Document provides further background information,
supporting facts and concrete examples to the Bioeconomy Strategy and Action
Plan. It does this by providing more comprehensive discussions of the main
elements that will be covered by the three large areas of the Strategy, which
is complemented by a more detailed version of the Action Plan that formulates
sub-actions to the main list of actions of the Communication.

1.
Background to the Bioeconomy Strategy for Europe

The Bioeconomy Strategy
focuses on three large areas: the investment in research, innovation and
skills, the reinforcement of policy interaction and stakeholder engagement and
the enhancement of markets and competitiveness in bioeconomy sectors.

1.1.
Investments in research, innovation and skills
1.1.1.
Research and
innovation funding

As highlighted in the Innovation Union, the
European research and innovation landscape is still deeply compartmentalised.
This also affects the bioeconomy: 85% of public research and development
(R&D) is programmed, financed, monitored and evaluated at national level
with only little trans-national collaboration or coordination. Less than 6% of
total R&D investment and only 15% of European publicly funded R&D is
financed in a cross-border collaborative manner[19], in particular through the EU
Framework Programmes for Research and Technological Development (FPs). Lack of
collaboration and coordination between national public R&D programmes is
one of the obvious causes for sub-optimal returns from R&D spending[20].

The setting up of 16 ERA-NETS and 2 Joint
Programming Initiatives (JPIs) related to the bioeconomy over the past years
has demonstrated the willingness and benefits of cross border collaboration in
public research. Supporting technology transfer or stimulating SMEs to
participate in “open innovation” programmes are also an essential procedure[21], for example through the
Competitiveness and Innovation Programme (CIP). Innovation is expected to play
a major role in driving the European science base, strengthening links with
policies and the exploitation of research results within the implementation of
policies. Moving to a strong bioeconomy would require leveraging further public
and private investment, increasing the positive effects of spill-over,
improving research productivity, launching public-private partnerships (PPPs),
and creating incentives for and reducing barriers to technology development and
research-based innovation.

Providing a scientific evidence base for
policy-making will remain an important objective of European research. The
bioeconomy will further enrich this function by making the research more
multidisciplinary through the integration of disciplines and sectors; in this
context it will also address societal challenges taking into account social,
economic, environmental and policy dimensions.

1.1.1.1.
Horizon 2020

The EU budget for Europe 2020[22] proposes a EU Framework
Programme for Research and Innovation “Horizon 2020” (2014-2020) with an
associated budget of € 87.7 billion. It aims to boost Europe's smart,
sustainable and inclusive growth by increasing excellence in the science base,
promoting competitiveness and industrial leadership, and tackling societal
challenges identified in Europe 2020.

Horizon 2020 is expected to address several
aspects of the bioeconomy. Research and innovation under several Horizon 2020 societal challenges are clearly
related to the bioeconomy, in particular under "Food
security, sustainable agriculture, marine and maritime research, and the
bioeconomy" – for which a dedicated budget of € 4.1 billion has been
proposed – but also under parts of other challenges such as "Climate
action, resource efficiency and raw materials", "Secure, clean
and efficient energy", "Health, demographic changes and
wellbeing" and "Inclusive, innovative and secure societies".
This will be complemented by actions to promote "Industrial Leadership
and Competitive Frameworks", through the development of various
enabling technologies including several relevant to the bioeconomy
(biotechnology, nanotechnology, ICT, advanced materials, manufacturing and
processing, and space), as well as by supporting innovation in SMEs and
providing access to risk finance. The European Institute of Innovation and
Technology (EIT) with its Knowledge and Innovation Communities (KICs) in
different areas will also address questions related to the bioeconomy. This
applies in particular to the theme "Food4future", which has been
suggested for one of the KICs to be selected after 2014. Finally, Horizon 2020
research and innovation under "Excellent science base" has
also a high potential to contribute to progress across various bioeconomy
sectors – through general support to frontier research, future and emerging
technologies, research infrastructures and to research training and career
development.

Recognising the need for increased
coherence among research and innovation funds and in order to achieve the
greatest possible impact of EU funding, Horizon 2020 will also aim at
developing closer synergies with national and regional research and innovation
programmes (e.g. through public-public partnering), as well as with other EU
programmes (e.g. in education, competitiveness and SMEs) and funds, such as the
structural and Cohesion Policy funds. This will help strengthening national and
regional research and innovation capacities and skills, also in the context of
the bioeconomy. PPPs will equally be sought, for research and innovation
agendas which are of strategic importance to EU competitiveness and to address
societal challenges, including in the bioeconomy. Commission services are
exploring the possibilities for establishing a PPP on bio-based industries.

1.1.2.
Leadership in
biosciences

Today, Europe is a global leader in various
fields of biosciences and -technologies, for example it has a competitive edge
in industrial biotechnology for chemical, enzyme, food and feed ingredients
industries. However, the US, Canada, Japan, India and China are also rapidly
adopting industrial biotechnology solutions and there are justified concerns
about the long-term competitiveness of the European industry[23]. Europe still has a very
strong advantage but is increasingly loosing out in pace to other global
players[24],
thus it has already lost leadership in plant biotechnology. Investment in
research and innovation and adapting education and training possibilities to
today's needs are prerequisites to maintain leadership in these areas.

1.1.3.
Implement
multidisciplinary education programmes across the EU

The transition to a bioeconomy creates new
scientific and technical occupations in key manufacturing and energy sectors,
requiring workers with specific mixes of qualifications and competences[25]. The bioeconomy will also need
professionals capable of moving at the interface of different areas,
understanding the economical and societal impact of their activities, fostering
cross-talk between sectors and meeting the public demand for transparency and
accountability[26].
Furthermore, the demand for people with the necessary skills to exploit the
results of this research and innovation (e.g. creativity, marketing, management
and entrepreneurship) will increase. It is also important to point out that
many SMEs in sectors such as agriculture, forestry, aquaculture and food often
lack in-house technical skills to undertake research or take up results of
innovation[27].

Technological advances and structural
changes require life-long learning. For example in rural and coastal regions,
new uses of biological materials require new skills in the primary production
sector. It is forecasted that 2.2 million skilled agricultural and fishery
workers will be needed by 2015[28].
This means that a mix of traditional and completely new competences will have
to be applied across various fields of activities in agricultural, aquaculture
and forestry sectors.

Establishing a Life Sciences and
Agricultural Universities Forum will be instrumental to facilitate the
uptake and development of the bioeconomy in academic contexts, by networking
and fostering appropriate education, training and research careers related to
the bioeconomy.

1.1.4.
Increasing
opportunities for high- and low-skilled labour forces

Given the strong potential mismatch between
the European workforce and labour market demands in the bioeconomy in the
future, actions are needed to ensure that the EU workforce has the right mix of
skills, including diversified curricula that are adapted to these needs and
more attractive for the younger generation. Support to the creation of new,
hybrid university curricula targeted at developing interdisciplinary
competences in a broad range of fields including life sciences, natural
sciences, engineering, business, economy, learning, and social sciences should
be intensified[29].
Mobility between country and cross-recognition of qualifications between Member
States, but also between sectors and stakeholder groups needs to be improved
and implemented. In addition a strong entrepreneurial and innovation culture
needs to be stimulated as well as life-long learning programmes, with short
modules leading to recognised European qualifications.

At the same time, studies related to
innovation in some bioeconomy sectors indicate that these often employ a
relatively important share of low skill employees. This has implications for
increasing EU job opportunities[30].

1.2.
Reinforced policy interaction and stakeholder
engagement
1.2.1.
Creating a favourable
environment for the bioeconomy: policy coherence and cross-sectoral interaction

Due to its broad scope, the bioeconomy is
subject to a wide range of policies at national, European and international
level, ranging from supply-side research through to demand-side support to
business and consumers. It also takes into account society’s legitimate
concerns about the safety, quality and origin of biological resources and
products. Owing to the cross-sectoral nature of the bioeconomy, many of its
activities are controlled by different public bodies or are part of wider
organisational structures in the private sector.

Poor coherence between decision-makers and
stakeholders are often at the origin of regulatory failures, as is the lack
coherent approaches between Member States and across sectors. The
incompatibility of market regulation with environmental and social regulation
can sometimes cause conflicts, such as the European targets on renewable energy
that distort the market for biomass. Subsidies or trade can also be an issue
due to irreconcilable international obligations or policy objectives.
Trade-offs are inevitable.

1.2.2.
Policy coherence

Developing and promoting a bioeconomy that
provides biological resources, products and public goods in a sustainable
manner is a relatively new concept. Accordingly, this observation was confirmed
by the results of the Public Consultation[31]
and stakeholder meetings (also see Section B of this Staff Working Document).
According to their findings regulatory and market failures as well as
fragmented policies and activities are the main obstacles to the efficient
development of the bioeconomy, as well as the lack of a coherent policy interaction
model.

The potential of the bioeconomy will only
be fully realised by working across several disciplines, policy areas and
sectors with a strong willingness to jointly address diverse responsibilities.
Areas where greater benefit could be obtained from better policy coherence may include
the identification and deployment of the most promising pathways for next
generation biofuels and bio-based products, facilitation of their
commercialisation and use, coordinated national planning with respect to waste
management and use, better consumer acceptance of new technologies, and
understanding the linkages between non-food use of food commodities and
agricultural land, on the one hand, and food price levels and volatility on the
other hand in view of adapting measures to prevent adverse effects.

The EU is engaged in the harmonisation of
legislation and monitors the implementation of European policy objectives. It
also promotes new instruments that could improve the achievement of different
kinds of objectives, such as the application of emission trading to the waste
issue. It has been demonstrated that such instruments could generate more
employment if financial benefits are invested in research and innovation.

One of the major objectives of the
Bioeconomy Strategy is to contribute to achieving the full potential of the
bioeconomy by providing the knowledge base for a coherent policy framework and
promoting relevant innovation activities, thereby giving specific support to
markets and policies related to the bioeconomy. The Strategy will achieve this
by building on FP7, Horizon 2020 and by complementing other relevant existing
policy initiatives, such as the EIPs.

1.2.3.
Improved
policy interactions

A bioeconomy interaction model will be
established, building on existing structures, to promote the bioeconomy by developing
synergies, complementarities and a more informed dialogue on policies and
programmes, increasing the availability of resources, developing joint actions,
involving stakeholders, and monitoring and reviewing progress. The creation of
similar interaction models in Member States will be encouraged.

The policy interaction model for the
bioeconomy will encompass the following elements:

A Bioeconomy Panel will provide a
discussion platform and flexible framework to support interaction, strategic
planning and implementation of the bioeconomy strategy. It will be mandated to:
(1) give advice on the implementation of the strategy, reinforcing interaction
between various policies and reinforcing synergies between national and
European efforts; (2) suggest European joint actions and measures; and (3)
monitor and evaluate progress in a systematic manner. The Bioeconomy Panel will
be composed of:

·
The relevant European Commission services
covering the main bioeconomy related policies and sectors (including the Directorates-General
for Research and Innovation, Agriculture and Rural Development, Enterprise and
Industry, Environment, Maritime Affairs and Fisheries).

·
Member States representatives from
bioeconomy-relevant ministries, with an overall balanced representation of the
main bioeconomy sectors and policies (i.e. agriculture and forestry, fisheries
and aquaculture, environment, research and education, enterprises and industry,
and health and consumer affairs), as well as of the different Member States.

·
Representatives of relevant stakeholders groups,
including respectively: i) industrial sectors associations ii) universities,
researcher organisations and the scientific community; iii) farmers, foresters,
fishermen; and iv) non-governmental environmental organisations.

The Panel participants will be invited and
the meetings will be chaired by the European Commission.

A regular Bioeconomy Stakeholders
Conference will provide opportunities for public awareness raising and for
an informed dialogue on the yearly progress of the Bioeconomy, involving
researchers, stakeholders, policy makers and the civil society at large.

A European Bioeconomy Information System
will be created (Bioeconomy Observatory) building on various existing
sources and databases. The Observatory will perform EU capacity mapping,
technology watch, bioeconomy policy outlook, and market monitoring in various
areas related to the bioeconomy, as well as forward looking analyses at EU and
world-wide levels. Collaboration with the Joint Research Centre (JRC), the
European Environment Agency (EEA) and Eurostat will be sought.

Broad advice will be provided through a
flexible system of Hearings, where various existing Commission working/advisory
groups or committees (e.g. Standing Committee for Agricultural Research; Ad-hoc
Advisory Group for Bio-based Products within the Lead Market Initiative, the EU
Food Sustainable Consumption and Production Round Table, etc) as well as
stakeholders groups can provide information and raise issues with the Bioeconomy
Panel. Links will be ensured also with relevant European Innovation
Partnerships, public-public partnering (e.g. Joint Programming Initiatives) and
public-private partnerships established in bioeconomy related areas.

1.2.4.
Engaging society,
reaching end-users and linking with policy makers

The Public Consultation[32] pointed out the importance of
developing suitable discussion and coordination platforms for the European
bioeconomy with wide participation of stakeholders. Open and informed public
debates should take place on bioeconomy related research and innovation issues
that may raise societal concerns, such as the “food versus fuel” debate. These
debates should involve the research and innovation community, stakeholders,
policy makers and society at large and thus provide a basic mechanism for reliable insight into the benefits and risks of innovative
technologies and existing practices, and more ample opportunities to discuss
new findings and their implications. Furthermore, citizens have to be provided
with more information about product properties (e.g. on sustainability) and the
impacts of consumption patterns and lifestyle (for instance on the issue of
waste), in order to enable responsible and informed consumer choices.

A stronger EU scale
dissemination of research and innovation results, continuous knowledge exchange
and information flow to end-users and policy-makers should be systematically
ensured. Reinforcing informed dialogue between bioeconomy research and policy
making and securing EU public funding for research in support to
bioeconomy-related policies will also be fundamental to ensure that public
research results provide a sound scientific basis for responsible political
decisions.

Organising meetings of leading scientists on
an ad-hoc basis would provide valuable opportunities to facilitate consensus
reaching and to promote the use of scientific evidence towards tackling
societal challenges as input for policy making, as well as for pinpointing
missing elements in the knowledge base.

1.2.5.
Regional approaches

The bioeconomy can significantly contribute
to the future development of rural and coastal areas because it will promote
both supply and demand actions with regional dimension, such as the creation of
supply chains for residues and waste as feedstock for bio-based industries, setting
up of a network of small-scale local biorefineries or developing aquaculture
infrastructures.

Research and innovation will have an
important upstream role in the development of these activities and will be supported
by Horizon 2020, as well as by the reformed CAP and Cohesion Policy. In
particular, the proposed reinforced focus of the future Cohesion Policy on
innovation and sustainable growth will offer broad opportunities to local and
regional authorities and stakeholders to co-finance programmes and projects
boosting the bioeconomy in the framework of national and regional strategies
for smart specialisation. Support to infrastructures within the management of
coastal and rural areas is also compatible with the Common Fisheries Policy
(CFP) and Cohesion Policy objectives. They contribute to the local and regional
economy[33]
which is the appropriate environment for the development of the above mentioned
technologies. However, scale-up dynamics for these activities must account for
a wide range of factors such as transport and storage costs, environmental
regulations, and land use aspects.

Adaptation to climate change will be
subject to regional choice of fund investment and social innovation initiative
will also strengthen local and regional development

1.2.6.
International
cooperation for a global bioeconomy

Engaging with global partners for a faster
advance of research and innovation related to the bioeconomy world-wide will be
essential to maximise the sustainable use of natural resources and to foster
positive socio-economic, environmental and climate change impacts. The
Bioeconomy Strategy will engage in systematic international policy dialogues
and strategic partnerships. Cooperation in research and innovation and other policy areas related to the bioeconomy can be reinforced through diverse partnerships.

These cooperations will include the G20 and
major trade partners (e.g. on globally relevant
criteria for sustainability of biomass production and use), major agricultural
producers (e.g. on cutting edge technologies for food safety, reduced water and
environmental impacts, and energy security), emerging economies, which are
showing very fast developments in bioeconomy strategies and actions, and
developing countries to address the Millennium Development Goals of tackling
hunger and ensuring environmental sustainability. The world initiative Rio+20
on green economy will also support bioeconomy activities. Adaptation to and
mitigation of climate change will have to be addressed in depth, taking into
account trade-offs between policies which could occur in various global
regions, in particular in developing countries.

1.2.7.
Social innovation

The bioeconomy
is a domain where many examples of social innovation could take place both at
European and international level. The aim of social innovation is to solve
social issues at large or at local scale through the promotion of innovative approaches
and practices. These should combine organisational development and new forms of
interaction and cooperation between organisations in the public, private and
NGO sectors, cutting across established responsibilities, learning environments
uses of technology, and socio-economic or scientific knowledge. Participation
of stakeholders is essential to ensure acceptance, end-user orientation and
benefits of the innovative solutions promoted, and to facilitate the exchange
of best practices. Social enterprises are key drivers for social innovation in
the bioeconomy domain

Bioeconomy
social innovation could include increasing energy and resource efficiency
through attitudinal and organisational changes, ways to re-use and recycle
bio-based products, treatment of end-use level waste, the development of local
networks for the production and distribution of food products requiring new
forms of production. The bioeconomy also offers a huge potential for social
innovation in the area of health, diet, education, and rural and coastal
development.

1.3.
Policy implementation and enhancement of markets
in the main bioeconomy sectors
1.3.1.
Agriculture and
forestry

Over the coming decades Europe will be
challenged by dwindling natural resources, the effects of climate change and
the need to provide a sustainable, safe and secure food supply for a growing
global population. The goal is to provide agriculture and forestry with the
required knowledge and tools to support productive, resource-efficient and
resilient systems that supply food, feed and other bio-based raw-materials
without compromising ecosystems services, while supporting the development of
incentives and policies for thriving rural livelihoods.

The expected 70% increase in world food
demand by 2050[34]
and a steep increase in the demand for biomass for industrial purposes will and
must trigger a supply reaction of EU agriculture, being one of the biggest
suppliers to global agricultural markets. EU agriculture has a share of 18% in
world food exports, worth € 76 billion. In production values, EU agriculture
provides more than 40% of total OECD food production. Stakeholders, including
farmers, businesses, industry consumers, and advisory services, need to be
provided with the solutions they need. To this end close collaboration and
synergies need to be ensured across all sectors, regions, and policy areas[35].

Policy has a major influence on primary
production. In particular environmental policy (e.g. through directives on
soil, biodiversity, water, nitrate) and the Common Agricultural Policy (CAP)
have an impact on agricultural production methods as well as on individual
agriculture market sectors concerning the quality and production of products
such as wine dairy, horticulture, cereals, etc. Agriculture also interacts with
and influences consumer, competition and health policy, along with industrial,
and information policies. Equally important, the agricultural sector is
concerned by and contributes to meeting international commitments, in
particular as regards policies for trade, biodiversity, climate change,
development and food security. The Bioeconomy Strategy will strive to ensure
that the strategic importance of the primary production sector is clearly
recognised in the light of these manifold – and often conflicting – demands. The
following issues were identified as crucial to the introduction of sustainable
production systems in the context of the bioeconomy.

1.3.1.1.
Land use and the transition towards more
sustainable production

In order to meet food and biomass demand
Europe should examine trade-offs concerning land resources. 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. More than 1000Km2
are subject to 'land take' every year for housing, industry, roads or
recreational purposes, including some of the most productive agricultural land[36]. Progress on remediation and
reuse of brownfield land remains slow, particularly in the continuing absence
of specific Union legislation on soil protection. Land abandonment in some
rural areas is a reality and linked with loss of biodiversity depending on
farming systems. Concerning non-food production 5% of land was dedicated to
industrial usage (mostly biofuel oilseed). Work on land as a resource to
develop the full range of ecosystem services, from crops to fresh water to
climate change mitigation and adaptation, and taking into account landscape
level effects and connectivity, is needed to meet this challenge. Balancing
food versus fuel demand will require greater study along with further research
into agri-environmental land management concerning landscapes in the context of
biodiversity, green infrastructure and interconnectivity of habitats, creating
eco-corridors while providing functional services for pest suppression carbon
sequestration or coexistence[37].

1.3.1.2.
Agriculture and climate change

Agriculture is a significant contributor to
climate change and is in return dramatically affected by climatic instability.
Agriculture and food production represent 40% of the total global industrial
energy demand (including emissions embedded in inputs)[38], while global direct agriculture
emissions (without carbon losses from land use and land-use change) make up 10-12%
of total greenhouse gas emissions[39].
Livestock ruminants alone provide a major portion of these emissions. Contrary
to the situation in EU, global nitrous oxide and methane emissions from
agriculture are projected to increase by 50% by 2030 due to the growing global
demand for meat and biomass for industrial and energy purposes[40].

Research and innovation will aim at
increasing the adaptive capacity of plants, animals and production systems to
cope with rapidly changing climate conditions and environments, as well as
increasingly scarce resources. This will include dealing with diversification
and specific adaptation, mixed farming systems and land use practices,
adaptation of plants, animals and cropping systems to biotic and abiotic
stress, conservation and use of biodiversity, as well as specific climate
change mitigation and stress adaptation measures at farm, forest and landscape
level to water scarcity, heat, highly saline soils, new diseases and pests,
etc, and in deploying different agricultural practices, including biotechnology
as an enabling technology. In addition research will promote the sustainable
management of soils, exploit advances in conservation agriculture and reduce
green house gas emissions from agriculture and forestry activities, while
enhancing sequestration of carbon in soils.

1.3.1.3.
Livestock production

Food demand is expected to increase by 70%
by 2050[41]
and many of today's food production systems already compromise the capacity of
the planet to produce sufficient future food supplies. Meat consumption, for
example, in both the developed and developing world, is projected to double
from the 229 million tonnes produced worldwide in 1999/2001 to 465 million
tonnes in 2050[42].
In the future, livestock production will increasingly be affected by
competition for natural resources particularly land and water, by the need to
reduce fossil energy dependency and environmental impact, and by societal
concerns concerning animal welfare.

Developments in breeding, nutrition, and
animal health will contribute to increasing potential production and further
efficiency and genetic gains. In this respect the tools of molecular genetics could
have considerable impact, in particular marker assisted selection for traits
that are difficult to measure, such as meat quality and disease resistance. The
availability of increasingly annotated genome sequences of most livestock
species and the decreasing price for sequencing offer
unprecedented opportunities for advances in evolutionary biology, animal
breeding and animal models for human diseases. For instance, genomic selection
should be able to significantly improve different production traits in the cattle
industry, such asfeed efficiency and disease resistance. Livestock
breeding will need to check that selection for certain traits (e.g.
productivity) are not made at the expenses of other traits (e.g. fertility,
welfare). In parallel, the preservation of farm animal genetic resources will
be critical for ensuring that livestock systems can adapt to climate change and
other challenges. Indeed, the objective should be to rear the optimal animal
for a defined production system with fine-tuned management support. Therefore,
the whole spectrum of production systems, from the extensive, low input,
organic ones to the intensive indoor systems will equally require attention.

1.3.1.4.
Forestry

The EU has a total forest area of
approximately 177 million ha (around 40% of the EU territory), of which 130
million ha are available for wood supply[43]
and the production of non-wood goods and services (cork, resins, berries,
mushroom, hunting for example). The forest-based industries are a very
important EU economic sector (woodworking industries, pulp and paper, printing
industries), with a production value of € 365 billion, and an added value of
around € 120 billion created by more than 3 million jobs[44].

Forests play a crucial role in the global
carbon cycle and the fight against climate change. The demand for wood, and for
wood fuel in the context of increasing renewable energy demand, is a strong
stimulus for increasing forest growth and productivity and for improving
management practices more wood and residues could be harvested and mobilised
while demand for forest products is growing for material and energy uses as a
way to reduce carbon emissions by substituting products that cause higher
emissions. However, increased harvest reduce carbon sinks. There is a need for
speeding up production rates and developing forest raw materials with new
properties. Forests of the future will be increasingly dedicated to producing
fibres, timber, energy or customised needs, which will have considerable
impacts on the provisioning of a broad range of public goods.

Forests serve multiple and interrelated
social, economic and environmental functions. Besides providing jobs, income
and raw material to industry, forests contribute to soil fertility and prevent
soil erosion, mostly by limiting runoff and lowering wind speed. They also
regulate and purify freshwater supplies, and act as a water buffer, reducing
flooding. In addition, forests act as carbon sinks thus contributing to the
mitigation of climate change and as significant carbon stocks, that are important
to protect. They conserve biodiversity, protect against landslides and
avalanches, and provide recreation, vibrant rural landscapes, and a wide range
of commercial non-wood products. An important goal is to mobilise more wood in
appropriate areas while safeguarding biodiversity and other public goods
delivered by forests.

1.3.1.5.
Policies and public goods

Agriculture and forestry are unique systems
delivering commercial products but also wider non-marketed ecological and
societal public goods. Research will address these manifold roles and explore
their non-market value, thus supporting the provision of important non-material
benefits to society (landscapes and recreation) as well as of ecological goods
and services (functional and in-situ biodiversity, pollination,
prevention of nutrient leaching, enhanced carbon sequestration, water and
climate regulation, control of soil erosion). Research will provide the
necessary tools to policy makers and other actors to support the implementation
and monitoring of relevant strategies, policies and legislation to prevent
perverse effects by correcting for externalities and to encourage synergistic
outcomes. Research will include socio-economic and cost-benefit analysis,
support to cross-sectoral agro-meteorological models for short-term harvest
forecasts linking to climate change modelling as well as comparative assessment
of farming systems, including aspects of multifunctionality and interactions
with forestry, in addition to an analysis of long term developments and potentials
to guide long-term decisions.

1.3.1.6.
Agricultural advisory and support
services, extension services

Many recent reports have all identified an
information and knowledge transfer gap that exists between innovators,
researchers, and biotechnologists and the farming community. Transferring the
latest research results, best practice approaches and improved methodologies,
including biotechnological advances, to the farming community, is key to
advancing agricultural productivity while limiting environmental impacts.
Organised exchanges through re-constituted extension services must be put in
place together with instruments and mechanisms to make knowledge transfer more
efficient at the European scale, such as the European Innovation Partnership
(EIP) for "Agricultural productivity and sustainability".

A specialised support infrastructure for
SMEs across the EU would be beneficial. It could advise interested
stakeholders, for instance on strategic use of instruments (e.g. standards,
labels, certificates), and assist with specific sustainability tools, access to
demonstration, testing and certification facilities, or mediate investments.

Finally, it will be necessary to support
pilot and demonstration activities for up-scaling of practices and processes.
Increased investments into demonstration plants and actions will therefore be
needed.

1.3.2.
Fisheries and
aquaculture

The maritime sector accounts for nearly 5
million jobs in Europe, of which 20% are in fisheries, aquaculture and food
processing[45].
The sustainable management of fisheries, combined with the competitive
development of EU aquaculture and seafood processing industry, are key issues
for supplying quality and safety seafood to European citizens and supporting
livelihoods in European coastal areas. While these activities mainly fall under
the Common Fisheries Policy (CFP), the Integrated Maritime Policy (IMP), the
Water Framework Directive (WFD) and the Marine Strategy Framework Directive
(MSFD), they also form the “marine pillar” of the bioeconomy. Marine biotechnologies
are estimated to grow at a rate of 12% per year with a current global market of
€ 2.4 billion[46].
The added value of the bioeconomy approach to these issues is the potential,
through research and innovation, to address aquatic living resources on a broad
sense: fisheries management; aquaculture development; food waste; by-products;
seafood safety; and “blue biotechnologies” for food and non-food use.

Seas and oceans provide a vital
contribution to the Europe 2020 goal of smart sustainable and inclusive growth.
But they also represent a largely unknown territory, changing rapidly through a
combination of human and natural pressures (including climate change), which
will have major implications for our health, our well-being, food and energy
supply. To conquer this new frontier, advanced knowledge on marine living
resources is necessary to maximise its exploitable value in a sustainable way,
optimise the response to climate change and mitigate human impacts on the
marine environment as well as ensuring a Good Environment Status (GES) of EU
waters by 2020[47]
and optimising the planning of marine space.

Exploring seas
and oceans and making the most of our aquatic resources are research challenges
of considerable complexity with an important socio-economic dimension. Horizon
2020 should support multidisciplinary collaborative research as well as large
cross-cutting and technological actions between marine and maritime research
addressed in different major societal challenges e.g. resources efficiency,
transport, energy, food security and bioeconomy in order to boost innovation
and stimulate exchanges and complementarities between the marine and maritime
sectors. The Bioeconomy Strategy will contribute to strengthening synergies at
European level and within regional seas as well as improving scientific advice
to support relevant policies (e.g. CFP, IMP, MSFD, WFD etc) in line with
"Innovation Europe" and "Resource Efficient Europe"
flagships.

1.3.2.1.
Sustainable fisheries

The economic
and social viability of fisheries can only result from restoring the
productivity of fish stocks. It is then necessary to rebuild European fisheries
resources by maximizing their sustainable yield as targeted in the latest
reform of the CFP. This will require developing research in order to improve
scientific knowledge and innovation for supporting a robust decision making,
the move towards an ecosystem approach and the necessary fishery sector
adaptation. A comprehensive research effort should also target innovative
solutions for the "greening" of the fisheries sector by reducing its
ecological footprint on the marine ecosystems, including reducing discards and
wastes and making the best use of by-catches. Fisheries rely directly on the
productivity and health of aquatic ecosystems, which are under increasing
pressures, including impact from other sectors and conflicting claims for the
use of maritime space. Fisheries related research shall therefore address how
marine ecosystems function, what constitutes healthy and productive marine
ecosystems, and how one can develop harvest strategies which ensure services to
society while maintaining the integrity of the ecosystems.

1.3.2.2.
Sustainable aquaculture

The huge potential for the development of a
competitive European aquaculture sector should be supported by strengthening
the knowledge base for the sustainable exploitation of aquatic biodiversity
(fish, shellfish, micro and macro algae etc) through farming, taking into
account the existing legal framework, the interactions with the environment
(including environmental services), as well as, the social and economic
dimensions of aquaculture, including the competition in the global markets and
the consumer needs. As the coastline is getting more crowded with growing
population and diverse economic activities competing for the use of the
maritime space, there is a strong drive to move activities further off-shore
which poses considerable challenges both from a technological and spatial
planning perspective. It can be expected that applications from blue biotechnology
will contribute to the production of sustainable and healthy aquaculture
products by ensuring better control of reproduction processes, developing
innovative methods for selective breeding, feed ingredient optimisation and
industrial processing, health and welfare monitoring, disease control and
mitigation, preservation and bioremediation of aquatic ecosystems, energy
production.

1.3.2.3.
Marine biotechnology

New innovative
products and services could be brought to the markets by promoting further
exploration of marine biodiversity and strengthening marine biotechnology.
Components derived from marine organisms through biotechnology are already
being used in food, pharmaceutical, cosmetic and chemical industries. The
unexploited potential of the sea is even bigger since more than 90% of marine
biodiversity remains unexplored, offering a huge potential for discovery of new
species and applications derived from biotechnologies, which is foreseen to
generate a 10% annual growth for this sector.

1.3.3.
Bio-based industries

Bio-based industries are industries, which
either use renewable resources and/or apply bio-based processes in their
production processes. Europe has a number of well-established traditional
bio-based industries, ranging from the food, pulp and paper and other
forest-based industries, starch and biotechnology to the chemical, eco- and
energy industries. The European chemical industry employs almost 1.2 million
people in the EU and directly accounts for 1.1% of the total EU GDP; it is the
manufacturing sector with the highest value added per employee[48]. The EU’s eco-industry has a
turnover of about € 319 billion[49]
and employs more than 3.4 million people[50].
The European energy sector has an annual turnover of almost € 900 billion and
employs over 1.2 million people[51].
Today, only a small fraction of these industries are part of the bioeconomy,
however, these are likely to gain significantly in importance in the future:
the OECD estimates that biotechnology's share of all chemical production alone
is likely to increase from less than 2% in 2005 to 25% in 2025[52].

Significant increase in economic activity
is expected to arise from the innovation potential of industrial biotechnology
and biorefineries, which provide the opportunity to develop new bio-based
industries, transform existing ones, and open new markets for bio-based
products. Estimates foresee that industrial and plant
biotechnology will overtake health biotechnology by 2030 and account for 75% of
the total gross value added from the biotechnology sector[53]. While Europe's position in
plant biotechnology is modest, it is still a world leader in the area of
industrial biotechnology with about 70% of the world enzyme production[54]. It is therefore important for
Europe to maintain its competitiveness in this sector and to foster
interactions with other bio-based industries.

To build a competitive and sustainable low
emission society in the EU, it will be critical to provide stakeholders in
these industries and along the entire bioeconomy value chain with a
technological toolbox that includes a range of Key Enabling Technologies
(KETs), such as biotechnology, nanotechnology, ICT and advanced materials. The
Bioeconomy Strategy recognises the importance of the KETs for opening new markets to established and rising industries and for
delivering on many European policy objectives, such as the development and promotion of bio-based products under the Lead Markets
Initiative[55],
the targets set by the Renewable Energy and Fuel Quality Directives[56] and the Strategic Energy
Technology (SET) plan[57],
as well as the objectives of the flagship initiative on "A Resource
Efficient Europe". Furthermore, the Strategy will contribute to enhancing the
availability of biomass and biowaste at a competitive price without interfering
with food security.

1.3.3.1.
Biorefineries

The concept of biorefineries is analogous
to that of petrochemical refinery processes, which produce a wide range of
products and fuels from fossil resources. Biorefineries aim to produce multiple
bio-based products and fuels using renewable resources as a carbon source and
bio-based processes. Ideally, they should adapt their inputs and outputs in
response to market supply of different types of biomass and wastes and to the
demand for bio-based products, biofuels and bioenergy.

Biorefineries should adopt a cascading
approach to the use of their inputs, favouring highest value added and resource
efficient products, such as bio-based products and industrial materials, over
bioenergy. The principle of cascading use is based on single or multiple
material uses followed by energy use through burning at the end of life of the
material, including taking into account the greenhouse gas emissions (GHG)
mitigation potential [58].
By-products and wastes from one production process are used to feed into other
production processes or for energy. Biorefineries can thus contribute to the
principles of a "zero-waste society".

The biorefinery concept can be integrated
in a wide range of environments, ranging from small-scale plants using
agricultural residues in remote rural areas to large plants using waste from
surrounding industries and municipalities in a symbiotic manner. The FP7
project Star-COLIBRI formulated a European Biorefinery Vision for 2030 and
strategic research recommendations for 2020.

Pilot and demonstration activities

In order to enhance the competitiveness and
growth and maintain the leading role of European industries in the sector of
biorefineries, it will be necessary to support pilot and demonstration
activities for up-scaling of products and processes. A mapping on existing
biorefineries at pilot plant or demonstrator scale in Europe[59] has shown that there are a
large number of pilot plants already, but only a very limited number of
demonstrators. Increased investments into demonstration plants will therefore
be needed, possibly through PPPs, financial instruments, regional funds, etc.

Networks, clusters and logistics

Supply of sufficient quantities of good
quality renewable raw materials at a competitive price is critical for the
success of biorefineries. A supply chain for feedstock needs to be developed
across Europe that allows compensating fluctuations in one feedstock, by using
another. This includes improving infrastructures for storage and transport, and
developing the necessary logistics. Cascading use of biomass should be possible
at regional, national and European level. Supply chain and logistics should be
linked to a wide network of integrated and diversified biorefineries. Where
appropriate, a cluster approach could be applied

1.3.3.2.
Waste as an alternative biomass source

Every year, more than 300 million tonnes of
biodegradable household and household-like wastes, industrial wastes and other
wastes are generated in the EU and remain largely unexploited. The bioeconomy
offers a wide range of added value solutions for the prevention and management
of biodegradable waste streams in line with the Waste Framework Directive (WFD)[60]. The Directive includes the
use of by-products and secondary raw materials, but not that of agricultural
and forestry residues.

Many sectors are starting to recognise the
potential economic value of biodegradable waste (e.g. the agricultural,
chemical and energy sectors). For certain types of biodegradable wastes, too
many sectors are already competing for a limited resource, for example in the
pulp and paper industry. At the same time, differences in national
implementation of waste legislation (e.g. on landfilling) and in the
classification of certain waste streams exclude many of them from being used
for biotechnological conversion, e.g. wood from construction/demolition sites,
animal by-products, composts, etc. While protecting human health and the
environment should always be a priority when exploring potential uses of waste,
end-of-waste criteria that could make restricted wastes more accessible for
re-use need to be considered.

Using waste efficiently

As with biomass, waste may not always be
directed to the most efficient and highest value uses. Life cycle thinking and
prospective studies will be critical in determining which use of a waste will
be the most efficient in a given context. It will assist in assigning a waste
to its optimal use through a cascading approach in line with the waste
hierarchy of the WFD (e.g. measuring the added value of bio-based products
against that of biofuels and incineration), but also to justify any deviation
from this waste hierarchy (e.g. when distance makes transforming a waste into
biofuel or energy more efficient than other uses).

Guidance on the development of life cycle
thinking in bio-waste management is being developed by the Joint Research Centre
(JRC) and the Directorate-General for Environment. This initiative should be
extended to other waste streams that could undergo biological transformation in
order to ensure their optimal use. It should also take into account factors,
such as waste fluctuations, logistics and transport.

Future waste streams

While priority should be given to
investigating major existing waste streams and their potential uses, it will
also be important to anticipate, which biodegradable waste streams are likely
to gain significant volumes in the future (e.g. bioplastics) and to predict
future waste streams. Life cycle thinking should be an intrinsic part of any
product development. Furthermore, the likely shifts in waste and by-product
quantities and distributions as a consequence of the waste hierarchy
implementation should be assessed in future scenarios and associated
socio-economic and environmental assessments. Some work on the environmental
impacts associated to Member States' waste management systems is ongoing at the
JRC for the Directorate-General for Environment.

1.3.3.3.
Biotechnologies

Industrial biotechnology can contribute to
making production processes more resource efficient and environmentally
friendly. Bio-based processes can substitute individual production steps or
entire production processes. They convert carbon sources more efficiently (both
fossil and renewable), use less solvents and have a lower water and energy
intensity, which also results in significant cost savings. Bio-based processes
in some cases can be used to eliminate or substitute process steps involving
particularly hazardous substances[61].

Environmental biotechnology can contribute
to the development of more sustainable bio-based products and processes and the
cleaning and preventing environmental pollution, including hazardous substances
(e.g. through bioremediation and biological water treatment).

Synthetic biology is highly likely to
influence a wide range of areas of our economy and society. Designing and
constructing artificial micro-organisms for a given application could have a
huge potential for biotechnological applications, such as protein design and
production, metabolic engineering, carbon fixation, biomass production,
biocatalysis, biofuels and bioremediation.

Systems biology aims to understand the operation
of biological systems rather than its component parts. Combined with systems
engineering it can assist product and process development, for example through
virtual or in silico set-ups that predict process conditions. This
reduces the need for experiments and saves cost and time.

Nanobiotechnology develops nanotechnology
products with the basic components of biomolecules and living cells. This
provides innovative scientific and technical approaches to address existing or
to create new applications, especially in the area of biocatalysis, which will
contribute to the development of innovative and cost-efficient bio-based
products and solutions.

1.3.3.4.
Bio-based products

Bio-based products are wholly or partly
derived from materials of biological origin, excluding materials embedded in
geological formations and/or fossilised[62].
The advantages of these products over conventional products range from more
sustainable production processes, to improved functionalities (e.g.
enzyme-based detergents that work more efficiently at lower temperatures, save
energy and replace phosphorus) and characteristics (e.g. better
biodegradability, lower toxicity).

Standardisation and certification

The EU is taking an active role in driving
the development of clear and unambiguous standards for bio-based products at
European and international level (e.g. on bio-based content, biodegradability,
sustainability and functionalities) and ensure their consistency across
sectors. Standards are also central for the development of labels for bio-based
products.

To be comparable and reliable,
sustainability assessments for bio-based products need to be standardised and
be certifiable. Sustainability criteria for bio-based products and biofuels
should be comparable and take into account factors, such as the calculation of
GHG emissions and criteria for sustainable biomass production. Life cycle
assessments (LCAs) can contribute to improving the sustainability of products
and processes. They should be clear, objective, science-based, easy to handle
and implement[63]
and do not add significant costs to the development of innovative products or
hinder market access for SMEs. Guidance on good practice in LCAs is being
prepared by the JRC. The LCA approach is also being further developed towards a
sustainability assessment in the FP7-funded PROSUITE[64] and Global-Bio-Pact[65] projects.

Labelling

Labelling can
play an important role for the commercialisation of bio-based products. They
provide consumers with clear information on the environmental performance of
the products and guide their purchasing behaviour towards sustainable choices.
Labels can also be critical for the uptake of bio-based products by green
public procurement.

In view of the
proliferation of national and international labelling schemes, there are
benefits in associating bio-based products to a successful existing scheme with
a harmonised and standardised approach across the EU, such as the European
Ecolabel[66].
Although its criteria are not fully congruent with those of a sustainability
assessment under the European industrial policy, it already includes products
with renewable carbon content under various product groups (e.g. lubricants and
detergents). Creating additional product groups covering bio-based products
could be considered, as well as the further development and improvement of the
Ecolabel criteria.

Advisory and support services

Bio-based products create entirely new
markets or enter markets dominated by well-established petro-chemicals
suppliers. This implies specific challenges both for start-ups and mature
companies wanting to enter a bio-based market either as a supplier or a
customer.

A specialised support infrastructure for
SMEs across the EU would be beneficial. It could advise interested stakeholders
on the strategic use of instruments (e.g. standards, labels, certificates) and
assist with specific LCA and sustainability tools, bio-based eco-design
aspects, access to demonstration, testing and certification facilities, or
mediate investments. An EU wide approach bringing together suppliers and
potential users downstream in the bio-based products value chain would increase
chances to alleviate market failures and earn societal benefits earlier,
contributing to a lead market advantage. The BIOCHEM project[67] funded under the EU Competitiveness
and Innovation Programme (CIP) serves as a pilot for such services.

1.3.4.
Food chain

With a turnover of € 954 billion, and 4.2
million people employed in over 310,000 companies, the food and drink industry
is the EU’s single largest manufacturing sector. SMEs represent 99.1% of food
and drink companies and generate almost half of the industry's turnover. In
terms of turnover, R&D expenditure is quite low at 0.37% - the lowest of
developed countries.[68]

The combined pressures of an
ever-increasing global population, climate change impacts, limited natural
resources, complex socio-economic and culturally influenced dietary choices and
an increasing demand for meat, pose significant and unprecedented challenges in
ensuring future food security and safety. Over recent years, food consumer
retail prices have risen at a higher inflation rate than all other items and
the prices of agricultural commodities have shown an extreme volatility.[69]

The central goal of the
Commission's food safety policy is to ensure a high level of protection of
human health and consumers' interests in relation to food, taking into account
diversity, including traditional products, whilst ensuring the effective
functioning of the internal market. The White Paper on Food Safety[70] provides guiding principles for
applying an integrated approach from farm to table covering all sectors of the
food chain, including feed production, primary production, food processing,
storage, transport and retail sale.Over the last three decades obesity levels
in the EU have risen dramatically, particularly among children. This is
indicative of a worsening trend in poor diets and low physical activity levels
across the EU population which can be expected, in turn, to increase future
levels of a number of chronic conditions. In the long term, this will result in
a negative impact on life expectancy in the EU, and a reduced quality of life
for many. Tackling this important public health issue entails the integration
of policies across the board; from food and consumer, to sport, education and
transport. The Bioeconomy Strategy sets out concrete actions to help ensure that
consumers have access to sufficient, safe, nutritious and affordable food at
all times while decreasing the burden of diet-related diseases, including
obesity by promoting healthier diets and by facilitating sustainable and
value-based consumption patterns.

1.3.4.1.
Resource efficiency

The food industry is a very large consumer
of water, energy and packaging materials. Water is used throughout the
processing chain, not only as an ingredient, but also in processing for
cleaning, heating and cooling. Reductions in water usage by up to 20 % in
Europe should be achievable by improving the efficiency of existing processes
and by applying new technologies and processing methods. Likewise, a more
efficient use of energy in food processing, transport and distribution will
increase the industry's competitiveness by lowering costs and have a positive
impact on the environment. Alongside improvements to traditional processes, new
technologies should be applied more widely and novel technologies should be
developed in order to maximise recycling and minimise energy usage and waste at
all stages of the food supply chain.

1.3.4.2.
Food waste

An estimated 90 million tonnes of food,
(approximately 180 kg per capita) goes to waste in Europe each year, with up to
80% of that waste coming from the manufacturing and household sectors alone[71]. Worldwide, approximately 1.3
billion tonnes or one third of all food produced for human consumption is lost
or wasted annually[72].
Food waste also contributes to global carbon emissions and is ethically unjustifiable
in a world where close to 1 billion people remain undernourished. Urgent,
global and integrated measures are urgently needed to prevent avoidable food
waste together with strong public engagement as a prerequisite in moving
towards sustainable and equitable food systems.

The Commission is already addressing the
issue actively and is cooperating closely with all relevant stakeholders to
explore how to minimise food waste. It works with retailers in the framework of
the EU Retail Forum on sustainability, with the EU Sustainable Consumption and
Production Food Round Table, with the High Level Forum for a Better Functioning
Food Supply Chain and with the Member States. Food waste is also a topic under
analysis by the Commission and other EU members of the OECD, in the context of
the recently formed Food Chain Analysis Network. The forthcoming proposals for
the reform of the Common Fisheries Policy will also address the issue of
eliminating discards of edible fish.

It is essential that consumers are provided
with the information necessary to enable them to make informed choices and to
avoid throwing away food that is still edible. Current education and consumer
education tools such as The Europa Diary[73]
and Dolceta[74]
touch already upon the reduction of food wastage and the European Commission is
currently undertaking an evaluation of its consumer education actions although
further actions are still urgently needed.

1.3.4.3.
Packaging

Food packaging plays a critical role in
ensuring food safety, enhancing shelf-life, preserving taste, protecting goods,
providing information to consumers and providing convenient portion sizes but
also generates large quantities of waste and poses a significant environmental
burden. The development of new, biodegradable, thinner and/or lighter packaging
materials that can be fully re-used, recycled or recovered as energy sources,
while ensuring food safety, are urgently needed in order reduce heavy
environmental footprint currently brought to bear. While sustainable packaging
must be considered against the background of food safety and economic
sustainability, innovative advances in this field would have significant
positive impacts on the competitiveness of the European food and packaging
industries while paying a key role in reducing environmental impacts of this
sector

1.3.4.4.
Food safety

Over recent
years there has been an alarming increase in food safety incidents which have
increased consumer concern worldwide. In industrialised countries, the
percentage of the population suffering from food borne diseases each year has
been reported to be up to 30%. In the USA, around 76 million cases of food
borne diseases, resulting in 325,000 hospitalisations and 5,000 deaths, are
estimated to occur each year[75].
Complex food production chains and the globalisation of food markets have
further increased potential food safety risks. The very heavy socio-economic
burden caused can not be underestimated and, in light of increasing food
demand, is likely to increase in the short-term. Innovative approaches, integrated
policy developments and further investment in research and innovation aimed at
enhancing food safety, from production to consumption, are urgently needed.
Research and innovation should also address the social aspects of the seafood
sector which is essential for the cohesion of the social tissue in European
coastal areas.

It will be essential that
"fit-for-purpose" and effective food safety regulations are in place
to protect consumers and consumer confidence while ensuring food safety and
reducing wastage. Measures should be taken to reduce, where possible, mitigate
the cost of compliance with regulation and the possible negative effects of
compliance on innovation should also be carefully assessed and reviewed.

1.3.4.5.
Nutrition and dietary choices

Adequate nutrition is fundamental for
normal growth and development, health, prevention of disability and disease and
well-being. In Europe, the burden of disease due to poor nutrition is related
primarily to food choices that lead to the excessive intake of energy-dense,
nutrient-poor foods.

There is a need for more dialogue between
governments, public health groups and industry in raising consumer awareness of
the link between food and health, and in creating incentives for informed food
choices. This includes possible reformulation programmes to reduce nutrients
associated with health risks, including sodium, sugar, saturated fat and
energy, and increasing the fibre, wholegrain, fruit and vegetable content of
commonly consumed processed and pre-prepared foods. These activities should be
supported by strategies to standardise and reduce portion sizes. Consumer
demand is driven by readily available, affordable, convenient and safe foods,
however consumers are showing an increasing interest in environmental issues
(where and how food is produced, transport distances including carbon printing)
and social values (fair trade) which are increasingly influencing food
purchasing decisions.

Sustainable consumption patterns and
healthy diets are key drivers for Europe’s growth and prosperity and the
synergies between “healthy” and “environmentally friendly” food must be further
explored at political level in Europe. Appropriate measures to improve the
health of citizens, when acceptable to society and beneficial to the environment,
can result in significant environmental and socio-economic benefits as well as
improvements in competitiveness. The food sector is currently experiencing an
increasing demand for meat at the same time as a steady increase in the world
population and ever increasing competition for resources. The transition
towards increased sustainability, equitability and security in food supplies
will need to reconcile a complex range of factors that include economic
viability, environmental protection together with societal needs and
expectations.

2.
The bioeconomy action plan for Europe[76]

The Bioeconomy Strategy includes a set of
objectives and actions to be taken at EU and Member States levels. This
accompanying Staff Working Document presents a detailed Action Plan whose
implementation will allow meeting the objectives of the Strategy. The
sub-actions of the action plan include, where relevant, the corresponding time
frame, actors involved, and funding instrument to be used. The execution of
some of these actions and sub-actions will require dedicated impact
assessments.

The detailed Action Plan below describes
the Commission's actions for the implementation of the Bioeconomy Strategy
objectives, building on the Seventh Framework Programme for Research and Technological
Development (FP7), Horizon 2020 and other relevant existing policy initiatives,
such as the European Innovation Partnerships (EIPs). It also invites Member
States and stakeholders to engage.

2.1.
Investment in research, innovation and skills

N° || Action || Timeframe[77] || Actors[78]

A1 || Ensure substantial EU and national funding as well as private investment and partnering for bioeconomy research and innovation. Develop further JPI and ERA-Net activities in order to strengthen coherence and synergies between public programmes. Support bioclusters and KICs under the EIT for partnering with the private sector. Outline the main research and innovation concepts and priorities for food, sustainable agriculture and forestry and for marine and maritime activities under Horizon 2020.

A1.1 || Increase EU public funding for research and innovation related to the bioeconomy, with dedicated and enhanced efforts on food security, sustainable agriculture, forestry, fisheries and aquaculture, and bio-based industries (e.g. FP7 and Horizon 2020). Encourage sufficient national public spending on bioeconomy research and development. || Short- to long-term || EU, MSs

A1.2 || Strengthen coherence and synergies between EU and national/regional programmes that support research and innovation relevant to the bioeconomy, through EIPs and specific public-public partnering initiatives (e.g. ERA-Nets, Joint Programming Initiatives). || Short- to long-term || EU, MSs, Regional authorities

A1.3 || Boost the bio-sciences knowledge base, related emerging technologies and biological research infrastructures, through relevant activities in FP7 followed by Horizon 2020 “Excellent Science Base”. Support research and innovation to address bioeconomy-related challenges in FP7 and then Horizon 2020, particularly under “Food security, sustainable agriculture, marine and maritime research, and the bioeconomy” and parts of other relevant societal challenges. Establish close interactions among the respective activities in Horizon 2020. || Continuous: Short- to long-term || EU

A1.4 || Cooperate with the EIT and relevant KICs in the area of the bioeconomy, including entrepreneurship promotion activities. || Continuous: Short- to long-term || EU

A1.5 || Establish close interactions between the relevant parts in Horizon 2020 and other related EU programmes in areas such as education, technology and knowledge transfer and acquisition, competitiveness and SMEs, development aid as well as structural funds - Cohesion policy Funds, Rural Development funds, Regional funds, European Fisheries Funds, etc. || Continuous: Short- to medium-term || EU

A1.6 || Outline the main research and innovation concepts and priorities for sustainable agriculture and forestry and for marine and maritime activities under Horizon 2020. || Short-term || EU

A2 || Increase the share of multi-disciplinary and cross-sectoral research and innovation in order to address the complexity and inter-connectedness of societal challenges by improving the existing knowledge-base and developing new technologies. Provide scientific advice for informed policy decisions on benefits and trade-offs of bioeconomy solutions.

A2.1 || Continue the co-operation with and ensure the sustainability of European Technology Platforms relevant to the bioeconomy. || Continuous: Short- to long-term || EU

A2.2 || Support knowledge acquisition and technology exchange, advisory and support services, cooperation and training opportunities among all actors of the supply chain and end-users of bioeconomy research and innovation, for example new businesses in the bio-based product market with particular attention to first users in applying sectors downstream in the value chain. Reinforce rural and coastal advisory services. || Continuous: Short- to long-term || EU, MSs

A2.3 || Develop further an EU SME support infrastructure advising producers, businesses and stakeholders, for example on strategic use of instruments (e.g. standards, labels, certificates) and for assistance with specific sustainability tools, access to demonstration, testing and certification facilities, or mediate investments. || Short-term (2014) || EU, MSs, Industry

A2.4 || Reinforce the dialogue between bioeconomy research and policy making and ensure EU funding of research in support to bioeconomy-related policies, in order to ensure that public research results provide a sound scientific basis and promote responsible political decisions. || Continous: Short- to long-term || EU, MSs

A2.5 || Boost the development of technologies related to bio-based industries and to the bioeconomy at large - including biotechnologies, nanotechnologies, ICT, advanced materials, manufacturing and processing - through FP7 and then Horizon 2020 “Industrial Leadership and Competitive Frameworks”. || Continuous: Short- to long-term || EU

A3 || Promote the uptake and diffusion of innovation in bioeconomy sectors and create further feedback mechanisms on regulations and policy measures where necessary. Expand support to knowledge networks, advisory and business support services, notably through EIPs and bioclusters.

A3.1 || Identify barriers and work out solutions to promote the uptake if knowledge and innovation in different bioeconomy sectors. || Continuous: Short- to long-term ||

A3.2 || Provide a level playing field for patent development and improve patent law related to the bioeconomy. || Medium-term || EU, MSs

A3.3 || Enhance the role of SMEs, primary producers and end customer servicing industries in the novel bioeconomy supply chains, in EU research and innovation programmes. Support "Innovation in SMEs" and provide "Access to risk finance" for innovative companies in the bioeconomy (Horizon 2020). || Continuous: Short- to long-term || EU

A3.4 || Organise on an ad-hoc basis meetings of leading scientists, which will provide a platform for discussion and uptake of scientific evidence for policy making as well as for pointing out missing elements in the knowledge base. || Continous: Short- to long-term || EU

A4 || Build the human capacity required to support the growth and further integration of bioeconomy sectors by organising university fora for the development of new bioeconomy curricula and vocational training schemes.

A4.1 || Promote EU talented researchers training, mobility, career development and exchange opportunities and enhance the development of an open European market for researchers across borders and public and private sectors in the bioeconomy areas. Increase the role and visibility of Marie Curie Actions (FP7 and Horizon 2020) and the European Research Area (ERA). || Continuous: Short- to long-term || EU

A4.2 || Stimulate the development of bioeconomy skills in higher education by encouraging interaction with bioeconomy sectors, creating more academic posts in relevant scientific and technological disciplines, adjusting higher education curricula, and providing realistic prospects and career opportunities. Where appropriate consider financial subsidies or other incentives. Promote bio-literacy in school curricula. || Short- to medium-term || EU, MSs

A4.3 || Establish a Life Science, Marine and Agricultural Universities Forum, to foster the development of the bioeconomy throughout academic excellence and networking in education, training and research. || Short- to medium-term || EU

2.2.
Reinforced policy interaction and stakeholder
engagement

N° || Action || Timeframe || Actors

A5 || Create a Bioeconomy Panel that will contribute to enhancing synergies and coherence between policies, initiatives and economic sectors related to the bioeconomy at EU level, linking with existing mechanisms (by 2012). Encourage the creation of similar panels at Member State and regional level. Foster participation of researchers, end-users, policy-makers and civil society in an open and informed dialogue throughout the research and innovation process of the bioeconomy. Organise regular Bioeconomy Stakeholder Conferences.

A5.1 || Establish an EU-wide bioeconomy interaction system to strengthen coherence and synergies across sectors, policies and activities, through a Bioeconomy Panel involving relevant European Commission services, Member States and stakeholders, and building where possible on existing structures. || Short- to medium-term || EU, MSs

A5.2 || Engage with civil society and promote informed public debates on bioeconomy issues, research and innovation activities and societal implications, through stakeholders discussion platforms involving scientists, entrepreneurs, policy makers and civil society at large. Organise regular Bioeconomy Stakeholders Conference to facilitate and promote communication activities on a yearly basis at EU level from 2012-2017. Encourage similar conferences at national level. || Continous: Short- to long- term || EU, MSs

A5.3 || Improve availability and quality of information on bioeconomy products and processes, and on their socio, economic and environmental impacts, to facilitate informed societal choices. Raise awareness with and involve local authorities and stakeholders in the building of the bioeconomy and in reaching out to the general public. Promote "zero-waste" campaigns. || Continous: Short- to long-term || EU, MSs

A5.4 || Promote further stakeholders involvement in the discussion of research priorities, in research activities and uptake of research results; promote best use of available scientific knowledge to underpin the development of national strategies and guidelines. || Short-term || EU, MSs, EATIP

A6 || Establish a Bioeconomy Observatory in close collaboration with existing information systems that allows the Commission to regularly assess the progress and impact of the bioeconomy and develop forward-looking and modelling tools (by 2012). Review progress and update the Strategy at mid-term.

A6.1 || Establish a Bioeconomy Observatory to follow the evolution of bioeconomy markets and the impacts (socio-economic, scientific technological, market and legislation) of policies, where such mechanisms do not yet exist, as well as research and innovation activities affecting the bioeconomy in Europe and beyond. Support existing databases and develop new databases and indicators for bioeconomy impacts analyses, EU and global models integrating economic both macro and sectors levels, environment, technological development and territorial dimensions. Link the system to a global monitoring system to follow the world-wide developments and impacts of the bioeconomy, with a focus on strategic third countries partners and also to guide international co-operation strategies (including in Horizon 2020). Review regularly the progress and delivery of EU and national/regional bioeconomy strategies, including research and innovation by Horizon 2020. || Continous: Short- to medium-term || EU

A6.2 || Produce regular foresights and forecasts and updates of ex-ante impacts assessments for the bioeconomy, contributing to policies' orientations as well as research and innovation directions. || Continous: Short- to long-term || EU, MSs

A6.3 || Contribute to the mapping of EU, national and regional bioeconomy policies, research and innovation capacities, activities and infrastructures, as well as public and private investments in research and innovation. Produce regularly Capacities Maps, Technology Maps, Policies Maps and Projects Maps for the bioeconomy in Europe. || Short- to medium-term || EU, MSs

A7 || Support the development of regional and national bioeconomy strategies by providing a mapping of existing research and innovation activities, competence centres and infrastructures in the EU (by 2015). Support strategic discussions with authorities responsible for rural and coastal development and Cohesion Policy at local, regional and national level to maximise the impact of existing funding mechanisms.

A7.1 || Contribute to national and regional bioeconomy strategies by supporting discussions with authorities responsible for rural and coastal development and Cohesion Policy. || Medium- to long-term || MSs

A7.2 || Enhance short chain, local economic activities and urban-rural and coastal interlinkages to cater for the increasing demands for regional and diversified food and non-food products (e.g. through support in regional development programmes). || Continous: Short- to long-term || EU, MSs, Regional Authorities

A8 || Develop international cooperation on bioeconomy research and innovation to jointly address global challenges, such as food security and climate change, as well as the issue of sustainable biomass supply (from 2012). Seek further synergies between the international cooperation efforts of the EU and Member States and reach out to international organisations.

A8.1 || Foster international policy dialogues (including monitoring and foresight) and joint S&T international cooperation actions in the area of bioeconomy in Horizon 2020 research and innovation to efficiently address global challenges related to the bioeconomy, such as food security, sustainable agriculture and fisheries, and greening the industry. Continue work with established fora, such as the International Knowledge-Based-BioEconomy Forum, the EC-US Task Force on Biotechnology Research, etc. Contribute to the development of global standards for bioeconomy sectors. || Continous: Short- to long-term || EU, strategic third countries partners

A8.2 || Promote international cooperation and synergies among R&I programmes related to the bioeconomy in the EU, Member States and strategic third countries, also through the expansion of existing fora such as the Strategic Forum for International Cooperation (SFIC). || Continous: Short- to long-term || EU, MSs, third countries

2.3.
Enhancement of markets and competitiveness in
bioeconomy sectors

N° || Action || Timeframe || Actors

A9 || Provide the knowledge-base for sustainable intensification of primary production. Improve the understanding of current, potential and future availability and demand of biomass (including agricultural and forestry residues and waste) across sectors, taking into account added value, sustainability, soil fertility and climate mitigation potential. Make these findings available for the development and review of relevant policies. Support the future development of an agreed methodology for the calculation of environmental footprints, e.g. using life cycle assessments (LCAs).

A9.1 || Develop tools to aggregate data on biomass and biowaste availability and their use in bio-based industries, bioenergy and food sectors in order to examine the use of available resources and the need for imports from third countries. Ensure that the developed knowledge base is communicated to the different sectors to revise the strategy if appropriate. Determine the sustainable biomass trading potential with third countries, taking into account the findings of the observatory to the GEOSS (Global Earth Observing System of Systems) of the Group on Earth Observations (GEO). || Medium-term || EU, MSs, Industry

A9.2 || Enhance the markets in Europe for quality biomass and waste to provide producers of bio-based products, biofuels and bioenergy with equal accessibility. || Medium-term || EU, MSs, Industry

A9.3 || Contribute to the development of an agreed methodology for the calculation of environmental footprints, e.g. using LCAs || Medium-term || EU

A9.4 || Develop the knowledge base for carbon balance and for assessment of sustainable uses of biomass || Medium-term || EU

A9.5 || Provide data, tools and models to examine potential trade-offs between various types of land uses in agriculture and increase capacity to analyse complex scenarios (e.g. on trade or food security versus biofuels issues) || || EU

A9.6 || Support the development of appropriate diagnostic tools, reference material and coordination mechanisms to tackle quarantine pests along with support to relevant authorities || Continous: Short- to long-term || EU, National Plant Health Authorities

A9.7 || Provide extension services and farmers/foresters with (predictive) tools on pests and disease outbreaks as well as with comprehensive information on measures for integrated pest control || Continous: Short- to long-term || EU, MSs, Regional and extension services

A9.8 || Improve the knowledge base for the implementation of policy actions under the Common Agricultural and Fisheries Policies (CAP and CFP), the Integrated Maritime Policy and many environmental (including biodiversity, resource efficiency and waste), industrial, employment, energy and health policies. || Short- to long-term || EU, MSs

A10 || Promote the setting up of networks with the required logistics for integrated and diversified biorefineries, demonstration and pilot plants across Europe, including the necessary logistics and supply chains for a cascading use of biomass and waste streams. Start negotiations to establish a research and innovation PPP for bio-based industries at European level (by 2013).

A10.1 || Promote the launch of a public private initiative for bio-based industries involving research and innovation supporting the sustainable use of renewable resources for the production of bio-based products. It will embrace the entire value chain from crop development, biomass production and collection to industrial conversion into a range of biobased products, notably biochemicals and biomaterials. || Short-term (2013) || EU

A10.2 || Support the establishment of a network of diversified biorefineries across Europe, as well as the creation and networking of one or more clusters of integrated and diversified biorefineries in every Member State. Assist in the creation of supply chains and the necessary logistics for the cascading use of biomass and waste by the biorefinery networks and clusters. || Medium-term || EU, MSs

A11 || Support the expansion of new markets by developing standards and standardised sustainability assessment methodologies for bio-based products and food production systems and supporting scale-up activities. Facilitate green procurement for bio-based products by developing labels, an initial European product information list and specific trainings for public procurers. Contribute to the long-term competitiveness of bioeconomy sectors by putting in place incentives and mutual learning mechanisms for improved resource efficiency.

A11.1 || Contribute to the development of methodological standards for bio-based products (e.g. using LCAs) with regard to, e.g. bio-based content, biodegradability and functionalities. || Medium-term || EU, CEN, ISO

A11.2 || Improve the accessibility to existing and invest into additional pilot plant infrastructures and activities in order to support the up-scaling of bio-based products and processes. Increase investments in demonstration infrastructures and activities in order to support the up-scaling of processes for the manufacturing of bio-based products. || Medium-term || EU, MSs

A11.3 || Better integrate research projects with the use of pilot and demonstration activities and advice to further the development of new products, technologies and production systems ("Spread Best Practice") || Continous: Short- to long-term || EU , MSs (through extension services)

A11.4 || Develop the knowledge base for certification schemes and labels (e.g. Eco-label) for bio-based products in order to promote their uptake in consumer markets and green public procurement. || Medium-term || EU

Launch a study in 2013 to assess different labelling options for bio-based products, in particular whether bio-based products are adequately covered by existing EU labelling criteria (e.g. Eco-label) and possibly to create a bio-based product category if necessary. || Short-term (2013) || EU

A11.5 || Contribute to the creation of an initial European product information list for bio-based products to promote uptake in consumer markets and green procurement. || Short-term (2013) || EU

A11.6 || Develop new technologies and processing methods aimed at reducing both energy and water consumption in the food processing industry. Stimulate the development of new, biodegradable, thinner and/or lighter packaging materials that only can be fully re-used, recycled or recovered as energy sources, while ensuring food safety. || Medium-term || EU

A11.7 || Boost the development of innovative production systems, products and services deriving from the exploitation of aquatic living resources and the management of their environment to stimulate blue growth. || Medium-term || EU, MSs

A11.8 || Develop innovative production and management systems and technologies to improve aquaculture competitiveness while consolidating the position of the sector at the forefront of technological development. || Medium-term || EU, MSs

A11.9 || Explore the possibilities of more demanding process and efficiency criteria in food processing and manufacturing. A consultation forum will be set-up and convene during 2012/2013 to deliberate on first draft implementing measures and possible self-regulatory initiatives. || Medium-term || EU, MSs

A11.10 || Provide the knowledge base for existing policy incentives (and if necessary for new policy initiatives, at both European and national level) with a view to reducing food wastage in food production, storage, transport, distribution and households. Support scientific research for the development of novel processing systems for converting food waste by-products for soil fertility, climate change mitigation or into higher value end-products. || Medium-term || EU, MSs

A12 || Develop science-based approaches to inform consumers about product properties (e.g. nutritional benefits, production methods and environment sustainability) and to promote a healthy and sustainable lifestyle.

A12.1 || Improve consumer awareness of healthier food choices in order to promote a dietary shift towards healthier diets and encourage sustainable consumption patterns across Europe. || Medium-term || EU, MSs

A12.2 || Promote research and innovation activities to further our understanding of the complex factors affecting food choices and their impact on the environment, and to develop new process technologies to enhance the functionality, quality and nutritional value of food and responding to consumers medical needs. || Medium-term || EU, MSs

A12.3 || Analyse new and existing policy and economic incentives to encourage industry to reformulate their products to reduce nutrients associated with health risk, including sodium, sugar, saturated fat and energy, and to increase the fibre, wholegrain, fruit and vegetable content of commonly consumed processed and pre-prepared foods. || Medium-term || EU, MSs

A12.4 || Establish and communicate to the society scientific evidence about environmental and social services provided by agriculture and by fisheries and aquaculture, as well as evidence on positive effects of seafood consumption. || Medium-term || EU

A12.5 || Offer full transparency to authorities and consumers on the origin of seafood products "from net/cage to plate" and promote the consumption of safe, nutritious and healthy European seafood. || Medium-term || EU

Section B - Estimating
the impact of EU level research funding and better policy interaction in
Bioeconomy

1.
The justification for EU action

Europe has an important role to play at two
levels, firstly in ensuring necessary policy coherence and enhancing market
development in the bioeconomy sectors, but also facilitating the new knowledge
and innovations that can loosen constraints and define a new frontier for the
bioeconomy. The EU's right to act in Research and Innovation policies is set
out in the Treaty on the Functioning of the European Union under Articles 179
to 181. Articles 38 to 44 (for agriculture and fisheries), Article 173 (for the
competitiveness of industry), and Articles 191 to193 (for the environment) give
basis to define a Strategy of interaction between these sectoral policies.

1.1.
A common view and a global answer for the main
challenges

The bioeconomy encompasses sectors of the
economy that are interrelated across the European geographical, economic,
social, environment policy levels. It has become obvious in the recent past
that the most effective way to address new global issues such as climate
change, global trade, food security, energy security, is to build global
answers for the main regions of the world. No one European country would be
able to answer alone; no one sector can be isolated from the other interrelated
ones. The EU policies of the Treaty, in particular for agriculture, research
and the environment, particularly climate change, have a direct interface with
the bioeconomy. Interaction between these policies is necessary as is also the
case for innovation and knowledge interrelations.

The legitimacy of EU and Member States' intervention
was strongly recognized in the public consultation already mentioned in this
Staff Working Document[79].
93% of respondents agreed that action is needed to realise the potential of the
bioeconomy, and 81 % thought initiatives should be taken at both EU and
national levels.

1.2.
Overall economic added value in a single market

The benefits of the grand market and the
elimination of institutional barriers as described in the "Cecchini
report"[80]
apply also to the bioeconomy. This supposes inter alia a standardisation
of the specification of manufactured products, healthcare, food additives, and
various other products. A grand European market for the bioeconomy will provide
a clear playing field for economic actors, and enterprises will be subject to
greater competition and will be prone to invest more in R&I in order to
reduce costs, improve product quality and develop new products to maintain
market positions. Measures to reduce market failures will be in particular significant
for the bioeconomy because its activities both produce and are constrained by
significant positive and negative externalities.

1.3.
A stronger EU commitment

Global and societal challenges need global
answers and shared views. European Union has a long tradition of organising
consensus and common policies; in addition, its capacity of promoting
scientific knowledge is bigger compared to individual Member States. This is
particularly true for bioeconomy which represents an important part of the
world trade; this theme is also more and more debated in the international
conventions or initiatives (food security, climate, development). There are
also common positions to take at the EU level. Better monitoring and policy
interaction is useful at two levels: between Member States and European
Institutions; between stakeholders, including policy making, consumers,
industry, etc.

1.4.
The benefits of EU research and innovation

Research and innovation can help to resolve
some societal challenges; it can also advance the technological frontier as
defined by the trade-offs between different metrics (costs, performance,
environmental and social impacts). The bulk of research in bioeconomy is
implemented at a national level; but a European research policy, based on
European funding is necessary; this conclusion follows from the application of
the subsidiary principle.

Secondly, specific characteristics of the
bioeconomy, the process and the products that are concerned also indicate an
important role for Europe. Some aspects of the bioeconomy represent rather
“young” research activity so the uncertainty of outcome and therefore the risks
are high and this impedes the necessary efforts; a common effort can reduce
perceived risk. A European effort is justified thirdly by the contribution that
these technologies can make to the grand societal challenges identified as
issues that require a European response. Lastly, the role of bio-technologies
will be wide spread amongst all the productive activities; it is desirable
therefore that research is coherent across Europe and that the benefits of
“knowledge spillovers” are maximized; this can be assisted by specific European
level interventions.

The integration of research and innovation
at European level comprises:

·
Interaction of the different countries research.
Avoidance of overlapping and duplication of research;

·
Increase of the spillovers of research and
promotion of the transfer of best practices, while protecting intellectual
property;

·
Increase of the volume of R&I in order to
reach the critical mass when compared to other countries, for instance USA.

All these measures increase the knowledge
spillovers, the productivity of ‘”knowledge” and therefore the leverage effect.

Risk can also be reduced by demand-side
measures. The European institutions for research and the associated actions are
mainly “supply side” measures that take little account of demand driven by the
market, but recently, there has been a clear policy shift to create effective
supply-demand[81]
matching in research and for the particular role of demand driven innovation
for growth, welfare and well-being. One way to increase demand driven
innovation is the creation of lead markets. The lead marked initiative[82] for bio-based products
launched by the European Commission (Directorate-General for Enterprise and
Industry) is exemplary. Public procurement is another effective way to create
demand for new innovative products.

The leverage effect describes the
multiplier effect of subsidies on R&I expenditures. Analysis of results and
impacts of FP funded projects in the food, agriculture, fisheries and
bio-technology areas show that participation in FP funded projects had leverage
effects and facilitated access to additional funding sources such as national agencies
or private foundations. Stronger links between research and innovation
encourage the private sector to invest more in R&I as it has been described
in previous studies about the Framework Programme.

For FP7, the “institutional effect” of EU
finding is 0.33 (projects are funded at 75% by EU and
€ 1 from FP is followed by € 1.33 R&D Iexpenditures), but a greater
leverage has been in fact observed. The Impact Assessment of Horizon 2020
retained € 2.1 for private and € 1.6 for public research as effect of € 1
R&D expenditure. Greater leverage could be expected in the bioeconomy with
specific stimulating actions and support to innovation policies.

2.
Scenarios

Four Scenarios (SOs) have been considered to
assess how to best unlock the innovation and employment creation potential of
Bioeconomy research. The
analysis of the social, economic and environmental impacts of the four scenarios
will allow for identification of the most efficient one to achieve the
objectives, while respecting the principles of subsidiarity and
proportionality.

SO1: The bioeconomy under “business
as usual” conditions: SO1 is the baseline
scenario described in Section 2.3.

SO2: A Non-EU coordinated Research
and Innovation in bioeconomy: In this option,
EU research efforts in the bioeconomy are discontinued, but are undertaken by
Member States. Coordination of research and innovation efforts between Member
States is very limited. However, policies related to the bioeconomy continue
under present arrangements at both EU and national levels, on a sectoral
approach and with minimal coordination.

SO3: The bioeconomy is supported by
enhanced efforts in research and innovation: In
this scenario, the bioeconomy research benefits from a new approach supporting
the implementation of the Innovation Union through the Horizon 2020 programme:
research is performed under an integrated research and innovation approach
specifically aiming at tackling societal challenges, and in an effort to
support innovation to allow a better deployment of products and processes on
the market and to enhance social innovation. It is also supported by
instruments to foster excellence in the science base and create industrial
leadership and competitive frameworks. The different policies related to the
bioeconomy continue to work on a sectoral approach at both EU and Member
States' levels. As stated in the Multiannual Financial Framework Proposal[83] (MFF), Research and innovation
in the bioeconomy benefit from an increased funding compared to FP7: € 4.5 billion
for the 2014-2020 period.

SO4: The bioeconomy supported by
reinforced policy interaction and enhanced efforts in research and innovation: In this option, the bioeconomy is given a coherent interaction framework
of supportive public policies that aim at reconciling competing activities and
overlapping initiatives. Research and Innovation is structured so as to match societal
challenges and policy objectives. This scenario links with the CAP and CFP, as
well as industry, environment and energy related policies, due to the potential
of innovation in these sectors. The future European Innovation Partnership
(EIP) on "Agricultural Productivity and Sustainability" as proposed
in the reform package for the CAP post 2013 and the Communication "Innovation
Union" will, for example, become a key tool for inducing innovation in
agriculture. Regional policy contributes to the development of new innovative
businesses and infrastructures in Europe. Provision of appropriate human
capital requires coordination with training and educational policies. As in
SO3, the bioeconomy research benefits from a new approach supporting the
implementation of the Innovation Union through the Horizon 2020 programme: research
is performed under a new cross-disciplinary approach specifically aiming at
tackling bioeconomy societal challenges, and in an effort to support innovation
in order to allow a better deployment of products and processes on the market.
Research and innovation in the bioeconomy benefit from an increased funding
compared to current level, as stated in the MFF.

3.
Comparing the policy scenarios
3.1.
How the options were compared

The four scenarios identified and presented
in Chapter 2 were compared according to a range of criteria, chosen to identify
the extent to which the various options contribute to the solution of the
problems. The selected criteria have been grouped into four sets covering the
policy interaction model, innovation, public goods and sustainability. The
groups include within them a variety of sub-criteria including: strengthening
the policy interaction model of the bioeconomy; improving the efficiency of
research and innovation through spillovers and leverage effect, contributing to
innovation in the bioeconomy, providing EU added value, stimulating high
skilled jobs; contributing to the supply of public goods; contributing to
positive environmental, social and economic impacts.

The approach draws on the public
consultation already summarised in this Staff Working Document, various
consolidated sources of expert opinion, evaluation studies of FP6 and FP7
funded projects and specially commissioned economic modelling. Scientific
evidence provided by the JRC publications or FP6/7 projects from “Agriculture,
Fisheries and Biotechnologies” has also been taken into account.

3.2.
Comparison by criteria
3.2.1.
Policy interaction
potential

In SO1 and SO2, no positive improvement of
policy interaction was projected. SO3 will contribute significantly to the
coordination of research in the bioeconomy through the deployment of ERA
activities[84].
It will not however facilitate the provision of a sufficient knowledge base for
polices, nor for coordinated actions. Benefits brought to the bioeconomy from
sectoral and horizontal policies at EU and national levels will not be enhanced
by a specific coordinated approach. This scenario will go some way towards
reducing perceptions of risk through the Risk-Sharing
Finance Facility (RSFF). SO3 has little direct impact on product standards,
market failures or the consistency and effectiveness of regulation, although it
can provide scientific evidence on which to base intervention policies.

It is among the main aim of SO4 to improve informed
dialogue by the establishment of EU-level bioeconomy platforms and by the development
of national and regional bioeconomy development strategies inspired by a common
European approach. In particular, a reinforced interaction can (1) reconcile
potentially overlapping policies and measures, taking into account trade-offs;
(2) reinforce the impacts of supporting policies and measures; and (3)
facilitate the removal of market failures in a coherent manner across the EU
and the introduction of effective and appropriate regulation. Research can
contribute strongly to a better informed dialogue by improving forward-looking
analytical tools that represent the bioeconomy satisfactorily and by further
development of assessment methodologies such as life cycle analysis and multi-criteria
analysis. SO4 has the potential fully to exploit the opportunities of European
level monitoring and interactions along the paradigms of resource efficiency
and green growth.

Coherence of research policy with other
policies under SO4 will strengthen the impacts of research in whichever
direction policy may lead and can inform sectoral decisions. For example, the
longer term impacts of bioenergy on agricultural forestry will largely depend
on the rules, standards and incentives introduced for the production of biomass
and the effectiveness of their implementation[85].
The integration between the biomass utilisation for bio-based products and
bioenergy by multi-product use and cascading is expanding which leads to
improved resource efficiency, optimised environmental benefits and waste
reductions.

International cooperation is essential to
ensure that bioeconomy-related global challenges are well addressed at the
appropriate level, and to develop common standards, coherent surveillance and
control and consistent regulations that do not impede trade.

3.2.2.
Innovation performance
of scenarios

The non-Europe option SO2 envisages that
the EU would withdraw from research in the field and that policy cooperation
with Member States and among sectors would evolve without any guiding strategy.
There would be negative impacts for this option. Innovation potential for
agriculture would remain largely unused. The impacts
from overcapacity in fishing and overexploitation of stocks would worsen as the
lack of publically funded EU-wide research would prevent adoption of optimal
policies. Both SO3 and SO4 are conducive to high levels
of innovation as a consequence of the improved research funding. SO4 can be
expected to be more successful in ensuring that innovations are adopted because
of the greater involvement of stakeholders and encouragement of local and
regional initiatives. In SO4, enhanced interaction within research activity and
with other policies, promotion and exploitation of research results, acting on
both supply and demand of bio-based products will strengthen the so-called
"externalities", in particular spillovers, both sectoral and
international ones. The additional benefits, or spillovers will be strengthened
in SO4 compared to the BAU and SO3; in particular the international spillovers
through a better dissemination of results and intensification of exchanges. The
inter-sectoral spillovers would be potentially more important in SO2 through
for example regional policies and development of competitiveness poles, but at
the detriment of the international spillovers.

The development of competitive
bio-industries would be delayed in SO2 as a consequence of continued problems
of access to markets, finance and knowledge and conflicting regulations and
standards across the Union. In option SO3 the enhanced research into second and
later generation bio-refineries and the extension of the product range will
provide the basic scientific underpinning of a broadly-based bio-based
industry, in particular chemical industry. Under SO4, public policy will be
informed to better reflecting external costs, allocating risk rationally,
providing financial support for demonstration plants and creating a long-term
strategy to stimulate demand through incentives and public procurement. Innovation
variables will have an important impact, in particular in SO4 aiming at
promoting strongly further private investment.

For the food chain, the non-Europe option
SO2 will be similar to SO1, but exacerbated by a lack of underlying scientific
knowledge and poor coordination of research. The underlying structural tensions
in the food-chain will continue. The potential health benefits from coordinated
European interventions in regulations and practices based on publically-funded
scientific research would be lost or delayed. SO3 will make a substantial
contribution to an improved food chain and will have beneficial impacts through
improved predictive risk assessment, effective control measures, global
surveillance systems, new food safety technologies and detection methods, microbial
and chemical hazards and their control, inclusion of biosensors in food
packaging, intelligent packaging with embedded information, a better
understanding of obesity, satiety, dietary requirements of the elderly and the
epidemiology of environmental and chemical risks.

The link between research and innovation
with education and skills is emphasized in Innovation Union; it is particularly
relevant for the bioeconomy, and SO4 will be able to address this
characteristic. The fact that multidisciplinary approaches are needed will
imply development of innovative systems of formation and dissemination of
knowledge. Furthermore, many social innovations could take place within the
food chain in relation for example to the distribution of food, lifestyles
changes, food and health. These forms of innovation can be encouraged both by SO3
and SO4, but it is likely that they would flourish better under SO4 because of
the greater involvement of stakeholders from beyond the conventional research
community. A particularly strong support can be expected from the post 2013 CAP
which, through its rural development pillar, will put in place specific tools
to enhance innovation.

3.2.3.
Strengthening
"public good" policy

Bioeconomy sectors provide and support a
wide range of public goods – i.e. goods that cannot be provided efficiently by
private market activities – in the fields of education,
knowledge and Research and Innovation (R&I), health, land infrastructures,
water, environmental quality, protection of nature. Many of them are
characterised by spillovers and cross-border effects that make EU action
particularly relevant.

The lack of incentives for private
producers means that there is an inadequate provision of public goods
associated to the bioeconomy. This is one of the challenges that have to be considered
in the evaluation of scenarios. SO3 is likely to stimulate the provision of
public goods only modestly, to the extent of the additional funding of public
R&I efforts that could be devoted to activities in the public domain such
as those listed above.

SO4 addresses the public good question
better. The creation of a sound knowledge base for coherent policies – enhanced
by SO4 would contribute to achieving the objectives of increasing efficiency,
production and jobs in market activities of the bioeconomy as well as improving health, social and environmental conditions, expanding the
provision of non-market services and related employment. The nature of R&I supported by EU policies would take into
account in a more systematic way the co-existence of such different objectives;
innovations introduced in products and processes would give consideration to
improvements in knowledge, nutrition, wellbeing, resource savings and environmental
sustainability, as well as to economic factors. A wide range of activities
could result, both in market and non-market spheres. The outcome would be a
greater ability to satisfy non-market needs, with more
effectiveness and efficiency.

3.2.4.
Sustainability
3.2.4.1.
Environmental impacts

Under SO2 the negative environmental
impacts of SO1 will remain insufficiently addressed by research, relevant data
and improvements in existing models. The impacts of SO3
on the environment will be generally positive, as it links greening economic
activities and integrated environmental protection with resource efficient
production and economic performance. Emerging risks of new production and
consumption systems may be identified that could not be considered in solution-oriented,
short-term research designs. From this perspective, public research on
environmental systems is particularly important to complement private research.

The European level concerted approach of SO3
is especially important for fisheries and aquaculture, because the marine
environment is international in most cases. Management measures contained
within the reformed CFP and required by the Marine Strategy Framework Directive
would reduce environmental impact from aquaculture and help achieve Good
Environmental Status over the next decade.

In SO4, the increased utilisation of waste
and by-products and share of dedicated perennial crops and integrated cropping
systems could increase the efficiency of land-use, enhance carbon storage and
reduce water pollution. A more favourable commercial and financial environment
and improved regulation and standards will promote bioenergy, chemical and
materials manufacture.

In the food chain, changes towards a more
environmentally friendly diet and a reduction in food spoilage and greenhouse
gas emissions in households will be aimed at. In addition, well-informed,
mature and independent consumers will reduce environmental impacts of the food
chain, particularly with regards to resource use and GHG emissions and waste
reduction[86].
Bio-diversity will benefit from an increase of sustainable farming practices,
if it is assured that within the supporting measures for farming also the
obligation to maintain (or create) diverse land structures is included.

3.2.4.2.
Social impacts

The impact of bioeconomy research funding
and improved policy interaction on employment is potentially significant. The pre-requisite for job creation is that skilled entrepreneurs and
project managers can develop and implement business models creating new value
chains and value-added bio-based products that are successful in the global
marketplace. Creating high-skilled jobs within the
bioeconomy depends on success in creating competitive bio-industries. For this
reason neither SO1 nor SO2 are likely to create many jobs in the area.

Under SO3 the number of jobs created in the
bioeconomy increases substantially as a consequence of the economic growth
following the stimulus to innovation provided by the increase in research
funds; 120,000 jobs would be created in the bioeconomy by 2025 (gross
increase). For SO4, 11,000 more jobs than for SO3 are
expected by 2025. This is fewer than the incremental employment generated in
moving from SO1 to SO3 because the main economic benefits of SO4 appear as
productivity gains rather than as employment. SO4 will
generate new jobs particularly in those sectors which will invest in the
non-food applications of biomass, e.g. energy, chemicals, eco-innovation.

SO4 contributes to achieving a diverse
multifunctional European agriculture that will provide ecosystem services as
coproduction with support from a strong and more targeted CAP[87]. Technology, social and
management innovation will make a strong contribution to rural development and
open new non-food markets for the farmers. The closer interaction of research
and policy under SO4 can be helpful here also not least in the promotion of bioeconomy uptake in rural development strategies.

Foreign investment in agricultural land
could be spurred by the expanding market for biofuels in SO4. The expansion of bioenergy production and bioenergy and biofuel use
in Europe may have profound impacts in global environmental aspects,
particularly land use changes in Brazil[88].
This is a potential negative aspect of SO4; it may be partially alleviated by
main-streaming the bioeconomy into the technical cooperation policy of the EU.

Food availability, safety and quality will get
strong support by SO4 as a result of an increase in improved knowledge, helping
the variety of both food products and channels, which will also bear positively
on consumer choice. Understanding long term consumer behavior will be more
developed in SO4. Confidence and consumer acceptance are known to correlate
strongly with the stringency of the regulatory framework. The prospects for poverty
alleviation are rather moderate in all options, with however a slightly rosier
picture for SO4, notably as a result of the generalized efficiency increase and
the increases in food availability, and the expected rise in the share of local
food supply characterizing this option.

The current crisis could affect these
results, but not in a dramatic way. Recent statistics show that investments
into research and innovation have remained at the same level of GDP real growth
(%) even in the 2008 crisis.

3.2.4.3.
Economic impacts

The Actions envisaged in the different
scenarios have been subject of simulations with the European econometric sectoral
model NEMESIS. For SO1, SO2 and SO3, the same general assumptions for research
and innovation variables have been used as for the Horizon 2020 Impact
Assessment. The budgets of € 80 billions dedicated to the whole "Horizon
2020" and € 4.5 billions for "food security, the bio-economy and
sustainable agriculture" as indicated in the Multi-annual Financial
Framework[89]
have been introduced into SO3. Compared to the reference scenario SO1, the
impact of Horizon 2020 on the value added of the bioeconomy activity alone
would be an increase of 0.61% (€ 9 billion),
with the creation of 120,000 jobs by 2025 when the full impact of the
"Horizon 2020" will have taken place.

SO4 has then been simulated through sensitivity
analysis of SO3 relative to the main variables characterizing innovation
economics, e.g. research productivity, spillovers, subsidies, leverage effect
(see Table 2). It is obvious that the impact of such variables is less important
than the impacts of the budgets which are considered in SO3, even if these
variables would also induce in SO4 some additional R&I expenditures from
private and public sectors (due to the increase of leverage effect). According
to a scenario where the economic performance of innovation variables is
increased by 40% due to successful implementation, the impact of SO4 on the
bioeconomy activity in 2025 would represent 0.14% of its value added (€ 2.4 billion) compared to SO3; this impact would
come in addition to the € 9 billion generated
by SO3; this would correspond to 11,000 additional jobs to the 120,000 jobs
creation in SO3 by 2025. In cumulated terms, over 12 years from 2013, the SO4
option would then generate employment of 790,000 jobs-year and € 45 billion of
value added. It should be underlined that these increases correspond to direct
impacts of research funding on the bioeconomy sectors. Indirect impacts on the
rest of the economy would also be important.

The SO2 scenario relative to a renationalisation
of European research would have negative impacts on bioeconomy value added
which would fall about -0.27% compared to the SO1 level in 2025.

Table 1: Summary of comparative economic
impacts of scenarios in 2025

|| SO2/SO1 || SO3/SO1 || SO4/SO3 || SO4/SO1

Added value created (bioeconomy only, %) || - 0.27 % || + 0.61 % || + 0.14 % || + 0.75 %

Added value created (bioeconomy only) || - € 4 billion || €9 billion || €2.4billion || €11.4 billion

Employment created (bioeconomy only) || - || + 120 000 || + 11 000 || +131 000

3.3.
Comparing and choosing the Scenarios

Scenario characterisation, mechanisms at
work, simulation model and overall effects are the different steps to consider
for the Policy Options economic comparisons. The comparison of the impacts on
some possible key aspects of the innovation and market variables is presented
in Table 2.

Table 2: Synopsis of scenarios, Main Key
Actions related to Innovation and mechanisms of change

|| Coefficients of the simulation model || Potential market effects || Non-market effects

Policy Option || Actions || R&I Fund. & Subsidy || LeverageRate of Private R&I || Spillov. Coeff. of Knowl. || Skills || Market behav. || Productiv. of Knowl. & Diffus. Effects || New Product markets || New Process, Lower Prices || New Priv. Invest. || Higher Productiv. || High. GDP and empl. || Higher provision of public goods || Social Well-being || Envir. Quality

SO2 || Non-EU || + || || + || || || || || || || || || || ||

SO3 || Enhance support to “bioeconomy” || +++ || || || + || || || +++ || + || ++ || ++ || +++ || +++ || ++ || ++

SO3 || Use instruments of European Research Area || || + || +++ || + || || + || ++ || ++ || ++ || ++ || ++ || + || + || +

SO3 || Strengthen links between different funding instruments || ++ || ++ || ++ || + || || ++ || + || + || + || + || + || ++ || ++ || ++

SO3 || Coordinate public/private research || || +++ || ++ || || || + || ++ || + || ++ || + || ++ || ++ || + || +

SO4 || Foster product and agriculture process innovation || ++ || + || + || + || + || +++ || + || +++ || ++ || +++ || ++ || + || + || +

SO4 || Market organisation and demand driven || || ++ || + || || +++ || || ++ || + || ++ || ++ || ++ || + || ||

SO4 || Education and Training policies || || || + || +++ || || + || + || + || || ++ || ++ || ++ || ++ || +

Table 3 shows how each scenario compares to
BAU according to the selected criteria.

Table 3: Impacts of Policy Options
compared to BAU option

Option Criterion || SO2 || SO3 || SO4

Interaction || -- || + || ++

Building knowledge base for regulation || -- || + || ++

Knowledge base for remedying market failure || -- || + || ++

Supporting International cooperation || - || = || +

Promoting innovation || - || + || ++

Providing EU added value || -- || + || ++

Sustaining primary production || = || + || ++

Building knowledge base for sustainable and competitive bio-based industries || = || + || ++

Building knowledge base for sustainable and productive food chain || = || + || ++

Stimulating high skilled jobs || = || + || ++

Promoting "public goods” || -/+ || = || +

Environmental impacts || - || + || ++

Social impacts || - || + || ++

Economic impacts || = || + || ++

The selection of a preferred scenario is
simple as SO3 is superior to SO2 in every way, recognising the clear advantages
brought by European research programmes for the Bioeconomy; and SO4 is superior
to SO3 in every respect as it not only benefits from all the advantages of SO3,
but also from a supportive policy, regulatory and market environment. The
Strategy "Innovating for Sustainable Growth: a Bioeconomy for Europe"
has been developed according SO4, the most advantageous Scenario.

[1]               Note: 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, CEN - Report on Mandate
M/429

[2]               BECOTEPS
(2011) The European Bioeconomy in 2030: Delivering Sustainable Growth by
addressing the Grand Societal Challenges

[3]               Table adapted from Table 1
(page 14) of The Knowledge-Based Bio-Economy (KBBE) in Europe: Achievements and
Challenges, Full Report, presented at the KBBE Conference on 14 September 2010 –
www.kbbe2010.be/en/kbbe2010/about-kbbe/kbbe-report

[4]               German Presidency (2007) En Route to the
Knowledge-Based Bio-Economy (Cologne Paper)

[5]               Belgian Presidency (2010) The Knowledge Based Bio-Economy
in Europe: Achievements and Challenges

[6]               COM(2011)21

[7]               COM(2011) 500/I final and COM(2011) 500/II final

[8]               OECD
(2009) The Bioeconomy to 2030: Designing a policy agenda

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

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

[11]             Agrimonde (2011) AGRIMONDE
foresight study on global agriculture and food between now and 2050

[12]             The Government Office for Science
(2011) Foresight. The Future of Food and Farming. Final Project Report

[13]             SCAR (2011)
The 3rd SCAR Foresight Exercise; Sustainable food consumption and production in
a resource-constrained world, Standing Committee on
Agricultural Research (SCAR), February 2011

[14]             The Bio-Economy Technology Platforms project; Final
report: "The European Bioeconomy in 2030: Delivering Sustainable Growth by
addressing the Grand Societal Challenges"

[15]             BioÖkonomieRat (2010) Bio-economy Council Report 2010:
Bio-economy Innovation

[16]             Wetenschappelijke en Technologische Commissie voor de
Biobased Economy (2011) Kennis- en innovatieagenda voor de biobased economy:
Naar groene chemie en groene materialen

[17]             Bio-based economy for Europe:
state of play and future potential - Report on the European Commission’s Public
on-line consultation http://ec.europa.eu/research/bioeconomy/news-events/news/20110926\_en.htm

[18]             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

[19]             Communication
from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the committee of the Regions. Towards Joint
Programming in research: Working together to tackle common challenges more
effectively. Brussels, COM(2008) 468.

[20]             Communication
from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the committee of the Regions. Towards Joint
Programming in research: Working together to tackle common challenges more
effectively. Brussels, COM(2008) 468

[21]             Belgian
Presidency (2010) The Knowledge Based Bio-Economy in Europe: Achievements and
Challenges

[22]             COM(2011) 811/3

[23]             Directorate-General for Enterprise and Industry (2007).
Competitiveness of the European biotechnology industry.

[24]             Directorate-General Research and
Innovation (2011) Review group for the Staff Working Document related to the
Impact Assessment of the bioeconomy strategy, September 2011

[25]             COM(2009)512

[26]             Belgian Presidency (2010) The Knowledge Based
Bio-Economy in Europe: Achievements and Challenges

[27]             Directorate-Genaral Research and
Innovation (2011) Review group for the Staff Working Document related to the
Impact Assessment of the bioeconomy strategy, September 2011

[28]             Cedefop
(2008) Skillsnet sectorflash: agrifood

[29]             Directorate-General Research and Innovation (2011) Experts
group report for "Skills needs in the future bio-based economy"
(p.46) June 2011

[30]             Directorate-General Enterprise and Industry (2009)
Ecorys Study on the "Competitiveness of the EU eco-industry" (p.56)
October 2009

[31]          European Commission Public Consultation "Bio-based economy for
Europe: state of play and future potential", Feb-May 2011

[32]          European Commission Public Consultation "Bio-based economy for
Europe: state of play and future potential", Feb-May 2011

[33]             COM(2010) 1183

[34]             FAO (2009) How
to Feed the World in 2050, High-Level Expert Forum,
Rome 12-13 October 2009

[35]             Directorate-General for Agriculture and Rural
Development (2011) Roadmap for the European Innovation Partnership "Agricultural
Productivity and Sustainability"

[36]             Gundula Prokop, Heide Jobstmann
and Arnulf Schönbauer, Overview of best practices for limiting soil sealing or
mitigating its effects in EU-27, Environment Agency Austria, Final report on
behalf of the Environment Directorate-General of the European Commission, 2011
(http://ec.europa.eu/environment/soil/sealing.htm).

[37]             European Environment Agency: http://www.eea.europa.eu/themes/landuse

[38]             FAO (2009) How to Feed the World in
2050, High-Level Expert Forum,
Rome 12-13 October 2009

[39]             IPCC Fourth Assessment Report http://www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4-wg3-chapter8.pdf

[40]             FAO (2002) World Agriculture
towards 2015/2030: Summary Report

[41]             The 3rd
SCAR Foresight Exercise; Sustainable food consumption and production in a
resource-constrained world, Standing Committee on Agricultural Research (SCAR),
February 2011

[42]             FAO (2006) Livestock's Long Shadow

[43]                    Directorate-General
for Agriculture and Rural Development: http://ec.europa.eu/agriculture/fore/index\_en.htm

[44]             COM(2008)
113 final

[45]             ECOTEC Research & Consulting
(2006)
An exhaustive analysis of employment trends in all sectors related to sea or
using sea resources

[46]             COM(2008) 534

[47]             Directive 2008/56/EC

[48]             Cefic (2011) Cefic European Facts and Figures

[49]             Ecorys
(2009) Study on the Competitiveness of the EU Eco-industry, prepared for
Directorate-General Enterprise & Industry

[50]             Ecorys (2011) Revision of Ecorys (2009) Study on the
Competitiveness of the EU Eco-industry

[51]             Eurostat
(2009) Statistics in Focus 72/2009: Energy Sector in Europe

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

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

[54]             SusChem (2005) Innovating for a Better Future:
Sustainable Chemistry Strategic Research Agenda 2005

[55]             COM(2007)860

[56]             Directives 2009/28/EC and 2009/30/EC

[57]             COM(2009)519

[58]             Nova Institute (2010) The development of
instruments to support the material use of renewable materials in Germany
(Summary)

[59]             FP7 project Star-COLIBRI (2010)
http://www.star-colibri.eu/files/files/Deliverables/D2.3.1-Mapping-of-Research-Projects-main-report.pdf

[60]             Directive 2008/98/EC

[61]             Regulation (EC) 1907/2006

[62]             Note: This definition refers to the well-known
short-cycle of carbon, i.e. the life cycle of biological materials (e.g.
plants, algae, marine organisms, forestry, micro-organisms, animals and
biological waste from households, agriculture, animals and food/feed
production). The bio-based product is normally characterised by the bio-based
content. CEN- Report on Mandate M/429.

[63]             Ad-hoc Advisory Group for Bio-based Products in
the framework of the European Commission’s Lead Market Initiative (2009) Taking
bio-based from promise to market: Measures to promote the market introduction
of innovative bio-based products.

[64]             FP7 project PROSUITE: http://www.prosuite.org/

[65]             FP7 project Global-Bio-Pact:
http://www.globalbiopact.eu/

[66]             Directorate-General for
Environment: http://www.ecolabel.eu

[67]             CIP
project BIOCHEM:
http://www.europe-innova.eu/web/guest/eco-innovation/eco-innovation-platform/biochem/about

[68]             CIAA (2011) Data & trends
of the European Food and Drink Industry 2010.

[69]             CIAA (2011) Data &
trends of the European Food and Drink Industry 2010.

[70]             Com(1999)719 final

[71]             Bio Intelligence Service (2010) Preparatory
Study on Food waste across EU 27. DG ENV, 2009

[72]             Global Losses and Food Waste (2011) Gustavsson, J.,
Cederberg, C.,Sonesson, U. Swedish Institute for Food and Biotechnology,
Gothenburg Sweden – Report commissioned by the FAO

[73]             The Europa Diary:
http://ec.europa.eu/consumers/europadiary/docs/europa\_diary\_uk.pdf

[74]             Dolceta: http://www.dolceta.eu/

[75]             WHO Fact Sheet N° 237, March 2007

[76]          Note: Actions are not placed in a priority order

[77]             In the context of the detailed action plan, and if not
specified otherwise, "short-term" stands for 2-3 years,
"medium-term" for 5-6 years, and "long-term" for anything
beyond 2020

[78]             Acronyms used for different actors: 1) European Union
(EU); 2) Member States (MSs)

[79]             Public consultation by the European Commission (open
from 22 February to 2 May 2011) "Bio-based economy in Europe: state of play
and future potential". Full reports available at: http://ec.europa.eu/research/bioeconomy/news-events/news/20110926\_en.htm

[80]             P Cecchini et al, (1988) The European Challenge 1992: the
benefits of a single market

[81]             E. Mann, L. Soete, F. Gannon, A. Hibon, E. Nowotny and
C. Vela (2010) Mid-Term Evaluation of the Risk-Sharing Financial Facility
(RSFF) – Final draft of the Group of Independent experts

[82]             Lead Market Initiative for Bio-based Products Ad-hoc
Advisory Group– Brussels, 2011 February.

[83]             COM(2011) 500/I final and COM(2011) 500/II final

[84]             European Commission (2011) Impact Assessment
accompanying the European Commission proposal for "Horizon 2020, the
Framework Programme for Research and Innovation CSF Impact Analysis"

[85]             Standing Committee on Agricultural Research (2011) The
3rd SCAR Foresight Exercise; Sustainable food consumption and production in a
resource-constrained world

[86]             Standing Committee on Agricultural Research (2011) The
3rd SCAR Foresight Exercise; Sustainable food consumption and production in a
resource-constrained world

[87]             European Commission (2011) The CAP towards 2020:
Assessment of Alternative Policy Options (SEC(2011) 1153)

[88]             A.G. Prins, B. Eickhout, M. Banse, H. Meijl, W. Rienks,
and G. Woltjer (2011) Global impacts of European agricultural and biofuel policies,
in Ecology and Society 16(1)

[89]             COM(2011) 500/I final and COM(2011) 500/II final

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