Challenges for the Future Bio-Economy

Challenges for the Future Bio-EconomyResults of an international web-survey

15.09.2011 Sitra, Landmarks Programme

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Motivation for the surveyBio-economy is here to stay But what is bio-economy today and in the future?

In the lack of a joint strategies and in the midst of varying opinions on bioeconomy,

the survey aimed at answering he following questions:

• Is bio-economy more than biomass-based production or biotechnologies? Can it also be seen as a wider societal issue, which affects all of us ?

• What are the most important challenges to establish the future bio-based economy in businesses and in society in general? And what are the solutions?

• How do individuals from different sectors see bio-based economy and its challenges (ie. farmers-forest-bioenergy-biobusiness. biotech)

The international web survey was conducted to support of the preparations and designing of resolutions for the international Koli Forum on “Resources for smart, sustainable and inclusive growth” held in Finland 14-1.9.2011.

1. How?Data collection and respondents

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Introduction

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Data collection method

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June-August 2011: Invitations by e-mail to various stakeholders, such as industry associations, Sitra mailing lists, EU institutions, Koli Forum mailing lists, etc.

Question: ”What are the challenges for the future bio-economy?”

Evaluation of importance of others’ responses

Elaboration: Why are these the most important for you?

Results summary

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Participation and respondent backgrounds (n=173)

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2. Results for the whole dataThemes arranged by importance and degree of agreement on the

importance

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Topics examined

• Biomass• Water• Nutrients• Supply• Business• Products• R&T&I• Economic

tools

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• Energy& Climate• Environment• Material flow• Global • Local• Norms• Communication• Societal system

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How the results are presented

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- Disagreement +

-

Import

ance

+

INTERPRETATION RULES

Size= Number of suggestions

Location= Importance= Level of agreement

Note: Location refers to relative, not absolute importance and agreement

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Framework for Interpretation of Impulses

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CHALLENGE CLEAR

=> Finding Solution

CONFLICT OVER THE CHALLENGE

=> Finding Agreement

NOT ON AGENDA

=> Consciously or not

POTENTIAL WEAK SIGNALS

=> Open eyed evaluation

AGREEMENT DISAGREEMENT

IMPORTANT

NOTIMPORTANT

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Bio-economy as a business sector

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BusinessPro-

duct

R&T&I

Supply

s

Economic tools

Norms

Climate & energy

Bio-mas

s

- Disagreement +

- Im

port

an

ce +

Business view - most common view to bio-economy

Important but not the most important aspect

Strong focus on biomass based production; yet disagreement on supply of raw materials

Material products and energy equally important; yet tension related to energy use

High agreement on the need of inputs in R&T&I and economic tools

Disagreement on norm control

Not on agenda

Common ground on important issues

Important but conflictuous issues

Low interest but deviating views

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Bio-economy as a societal strategy

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Local

Material flow

Water

Nutrient

Environment

Communication

Climate & energy

- Disagreement +

- Im

port

an

ce +



Not on agenda

Most often, bio-economy is viewed as a strategy related to energy & climate change

Maintaining a sustainable nutrient and water cycle is evaluated as the far most important challenge for future bio-economy

Biomass is rural, but rural aspects and local material flows are not on agenda

Communication challenges


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Bio-economy as an economic and social system

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s

Local

Material flow

Societal system

Global

- Disagreement +

- Im

port

an

ce +



Not on agenda

The importance of bio-economy as a societal strategy is recognised by few

High importance & conflictuous views

Major issue related to spatial scale of bio-economy (global+local)

How are material cycles organized between

- Global and local

- Nutrients & water


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Nutrient (Examples of respondents’ answers)

• Biomass production and usage is both an opportunity and a threat to the nutrient cycle; reaching a balance is necessary.

• Renewability of the resources and nutrients is only one side of the story; production of nutrients and the necessary energy have a large impact of their own. Renewables demand a lot of finites (water, fertilizer, land) in their production.

• The whole production chain has to understand and show commitment to the bio economical approach, and be aware of unintended consequences. Profitability must not be neglected.

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Water (Examples of respondents’ answers)

• Water leads the choices of sustainable production in every area; for example growing water-demanding food in water-rich areas.

• Water scarcity and its uneven global distribution is one of the main challenges.

• Closed circuit or the minimization of the use of nutrients, water or energy? There is some disagreement between participants concerning the priorities.

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Business (Examples of respondents’ answers)

• Business shifts the global balance of bio-economy as the speed of implementation and technology transfer differs.

• Favorable business environment is one of the key issues affecting change in the industrial structure.

• Long-term investment for development and production is also seen as a challenge for the bio-economy.

• SME enterprises also face challenges in economies of scale when launching new sustainable production methods.

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Product (Examples of respondents’ answers)

• Food production is the most significant area of innovation for the future bio-economy.

• Various new research programmes and grants are needed for more targeted research and innovation.

• In today’s atmosphere products still need to carry the associated environmental costs in order for green solutions to be able to compete.

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Climate & Energy (Examples of respondents’ answers)

• The competition for resources between food and energy production will be strong in the future. The land area needed for bio energy production is a key question.

• Many see that the current prices of fossil fuels do not reflect the external costs of their production and use. Price matters a lot in the competition. Use of land or sea for biofuels?

• Overall energy consumption is expected to rise, which will also eventually have an effect on the feasibility threshold of different energy products.

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Biomass (Examples of respondents’ answers)

• The often low refining grade of biomass is problematic; If we produce biomass while resources are already scarce, we have to have the most effective processes possible in use. We especially need processes that also work in areas where biomass growth is rather low to actually skip inefficient use of resources.

• Biomass is readily available in tropical areas. The technology for converting biomass into energy is lacking in most tropical countries. The balance of technological, economic and social development is also dependent on investments in new technology. 14/04/2023

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R & T & I (Examples of respondents’ answers)

• Research and innovation are vital for technological development to secure the effective bio-economy.

• Sufficient research programs demand international coordination and networks.

• By nature, bio-economy’s research and implementation challenges are complex and require multidisciplinary approaches.

• In most parts of the world, scientific research is not well applied. It is a matter of education, which makes it hard in most regions of the world.

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Societal system (Examples of respondents’ answers)

• Solutions in the bio-economy should aim in sustainability in which economical, ecological and social factors are all working together and making the sustainable solution possible. How can the companies and societies in the bio-economy sectors work together so that the result is beneficial for both of them and better than what they would have reached alone?

• Bio-economy requires new technical and social processes, which require both money and time to be established. It is so much easier and often cheaper to rely on the old non-renewable and fossil methods.

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Environment (Examples of respondents’ answers)

• Environmental cost accounting and costing principles are one of the main topics throughout the discussion.

• To thoroughly understand the environmental impacts of choices is a controversial tropic. Several policies and practices, although originally well-intended, may end up wasting more resources than foreseen in the beginning.

• Governments should address the interdependency between economic and environmental systems.

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Norms (Examples of respondents’ answers)• The role of governments is seen to

be facilitating the change towards the bio-economy by implementing regulations and norms that support the bio-economy activities.

• Regulations have a big impact on the financial outcomes, access to markets of different operators and competition.

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Supply (Examples of respondents’ answers)

• Availability of biomass for the bio-economy in sufficient quantities and at a tolerable price for scaled-up production is doubted.

• Promising new supplies in by-products

and waste materials.

• There is a high agreement on the view that sustainable food production should be secured in every area. Securing the food production serves people in the area - without food production it may be impossible to live in such areas in the future, especially during possible times of crisis.

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Communication (Examples of respondents’ answers)

• Public attitude is a major challenge for future bio-economy. Education and communication may shift attitudes, but it takes time. It is unclear whether the public takes its lead from policymakers, or the other way around.

• People's mindset needs to change dramatically in order to give room to the success of bio-economy. True actions and true thinking are needed. In surveys, people are green because they aspire to be green. However, their consumption decisions are often anything but that.

• Ultimately, the public should be convinced that the shift is worth it.

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Economic tools (Examples of respondents’ answers)

• Long-term investment is one of the major challenges. The problem is that investors want rapid returns. Therefore, investment for development and production of primary products need much support from national and international levels.

• All too often is bio-economy seen as an action with no sound economic basis.

• The role of governments is to facilitate

the change towards the bio-economy by implementing regulations and norms that support bio-economy activities.

• Private investors and innovators are needed, but they require stable policies and regulatory frameworks.

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Material flow (Examples of respondents’ answers)

• A life-cycle approach in using materials is important for the bio-economy.

• One process’s waste should be another’s input.

• Should bio-economy be a ”growth” or a ”de-growth” economy?

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Global (Examples of respondents’ answers)

• Is it even possible to balance the many differing interests of developed, emerging and developing economies?

• Mechanisms of global coordination and cooperation are called for, but not specified.

• What is the way to find globally and locally satisfactory solutions? Global solutions tend to favor large corporations who have overwhelming resources and economies of scale.

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Local (Examples of respondents’ answers)

• Local challenges are inexorably intertwined with the global ones.

• Resources, capital and knowledge are unevenly distributed, even when the supply is adequate on the global level.

• Production of food without increasing pollution and with the controlling of carbon dioxide emissions, in a way also economically sensible for the producer, needs a lot of development.

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3. Examples of individual suggestions

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HIGH RELEVANCE, LOW DEVIATION• Bio-economy requires new technical and social processes

• It is a major challenge to change the attitudes and short-term thinking in the political arenas – peoples’ mindsets need to change dramatically

• Social rejection and ignorance – if people do not understand it, they will not accept it

• It is a challenge to change the existing economic point of view of people (i.e. changing the motivation factors of buying, from low prices to how it was produced)

• The society must understand the importance of cascade use

• Resource limits – methods for defining the optimal use of bio-resources are needed

• The expected growth of general energy and resource demand will bring tremendous pressure to, already scarce, land, water and fertilizers

• Securing the supply of natural resources is a challenge to meet out current lifestyles and the increasing use of them

• The government should save the renewable resources from privatization so that they are in the reach of everyone

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HIGH RELEVANCE, LOW DEVIATION (contin.)• Cooperation is needed throughout the chain to make bio-economy profitable

• The public and private sector have to put their greed aside and work together

• Private: venture capital; public: incentive framework

• Politicians are not able to make the unpopular costly decisions

• Training people for the rural bio-economy in the urban society

• The basic needs of developing countries’ people have to be fulfilled before talking about bio-economy to them and using their resources

• Food production has to be secured everywhere, meeting the existing local needs

• The scientists and industry should develop solutions effective both in the bio-economy and the private economy

• Climate change is the biggest challenge in the circumstances of growing needs of food and energy

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HIGH RELEVANCE, HIGH DEVIATION• Pricing. Oil is still cheap compared to bio energy.

• New pricing mechanisms are needed – what is the cost of renewable resources against conventional non-renewables

• It is a requirement for the bio-based products to be cost-effective, they should not exceed the price of non-bio-based products

• How to mature everything ”bio” with the cheap fossils competing

• New process technologies are needed for finding new business models

• It is important to balance the sustainable use of resources with the increasing needs of people

• With the existing laws, the demand for bio-energy will increase

• Land availability is a global challenge for the future – sustainability of biomass for bioproducts will face major challenges outside Europe

• Climate change will bring radical changes in weather and crops

• The attitude of the old core of economics – earlier Greenwash harms a lot of rethinking. The EU and its enterprises need to adapt the pioneer’s role in developing and building new bio-economy

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LOW RELEVANCE, HIGH DEVIATION

• A multidiciplinery approach is needed in bio-economy solutions – cooperation between everyone in different sectors, companies and research fields

• The challenges and opportunities are endless. With or without bio-economy, we are driven even further to innovate in order to maintain the proper functioning of a global economy of seven billion people and growing.

• International relations of producing and consuming countries will rise on the agenda

• We have to focus degree programs on bio-economy

• Sectors are already competing for the utilization of bio-resources – How should the sustainability be ensured whe nthe demand is growing fast

• We need to invest more in creative ideas (i.e. products) in creating a new bio-economy beyond energy

• In Finland, we don’t need education in bioenergy, lots of young bio-engineers are without jobs.

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LOW RELEVANCE, HIGH DEVIATION (contin.)• Combining sustainablity with growth – bio-ecomomy shall provide a model of continuous

development towards the limits of the self-restoring capacity of nature

• Difficulties and fears of thinking differently, it is easy to do ”business as usual”

• Producing countries will be different compared with the fossil era

• Bioenergy is temporary. It will be replaced by geoenergy and wireless transfer

• The safety of biomass for certain applications has to be ensured (i.e food)

LOW RELEVANCE, LOW DEVIATION

• Small scale is not appreciated – only big enterprises have power in economic policy

• Differing cultural philosophies of various groups (i.e. nimby vs pimby)

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Examples of individual suggestions:

HIGH RELEVANCE, LOW DEVIATIONHigh level of agreement => Search for solutions

• ”Society must understand”

- People’s mindset needs to change dramatically; our ways of working, thinking and consuming need to be completely renewed

- Politicians who think that next years are not important and are not able to make the unpopular costly decisions

• ”Totally new structures are needed”

- Bio-economy requires not only new technology, but new social processes and infrastructure

• ”We are not alone”

- Cooperation and common language and is needed between different bioeconomy sectors, and between public and private actors.

- The option of bio-economy has to be offered also for developing nations

• ”Bio-economy is about land, sun, water and nutrients”

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IMPORTANT BUT CONFLICTING VIEWSHighly tensious issues => Find common ground

• ”Bio-businesses struggle with competitiveness”

- Although increasing demand, bio-businesses are struggling with cheap oil, cost effectiveness, land availability, and problems related to new technologies and innovation

• ”Bio-businesses are the key”

- Bio-economy is needed to combat climate change

- The attitude of the old core of economics

• ”Sustainable management and optimization of resources is the key?”

- Will there be enough resources for the bio-economy?

- Land struggles and climate change will affect our resource base

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LOW RELEVANCE, HIGH DEVIATIONPotential weak signals => consider with open eyes

• Bio-energy is temporary. It will be replaced by geo-energy and wireless transfer

• International relations of producing and consuming countries will rise on agenda

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LOW RELEVANCE, LOW DEVIATIONNot on agenda => Shoud it be? • Small-scale is not appreciated – only big enterprises have

power in economic policy

4. Themes by participant background

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What themes different sectors mention more/less often than others?

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Agriculture

+ Material flow+ Norm control+ Economic tools+ Societal system

- Business- Biomass- Environment- Climate&Energy- Communication

Bioenergy

+ Climate&Energy+ R&T&I

- Environment

Forest + Environment+ Societal

system+

Communication

- Material flow- Local- Nutrients- Water- Climate&Ener

gy- Norm control- Product- R&T&I

Environment

+ Water+ Environment+ Climate &

Energy

- Societal system

- Economic tools

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Strong sectoral differences in thinking about major challenges of future bio-economy

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Sector Use rhetorics more often others Use rhetorics less often than others

Agriculture Bioeconomy as a new societal system based on sustainable local material flows

Focus on norm control and economic tools

Biomass based business opportunities

Climate, energy and environmental issues

Forest Bioeconomy’s impact on environment and ecosystem services

Focus on communication on the importance of the forest sector for society

Local business opportunities related to material flows, nutrients and water

Climate & Energy issues

Product development and R&T&I

Bioenergy Bioeconomy as a strategy to full fill growing energy needs and combat climate change

Focus on R&T&I

Environmental impacts of bioeconomy

Environ-mentalist

Concern over (both positive and negative) environmental impacts of bio-based economy, e.g. climat change, water and ecosystems

Bioeconomy as a societal strategy or the use of ecoomic tools to promote bioeconomy

5. Summary of the results

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Interpretation of the web-survey results

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AGREEMENT DISAGREEMENT

IMPORTANT

NOTIMPORTANT

Ignored aspects:

Local production and small-scale biobusinesses

Biowaste and material flows

Cultural differences between sectors

Potential weak signals:

Bioenergy is temporary

International relations will rise in agenda

Safety of bioproducts, e.g. food

Models related to the self-restoring capacity of nature

Conflicts to be resolved:

Bioeconomy in society:

Bioeconomy & Sustainability (Ecosystems and climate change)

Bioeconomy as business:

Biobusiness struggle with competitiveness

Biobusinesses are the key

Will there be enough resources?

Energy vs material production

Solutions to be sought:

Bioeconomy in society:

Bioeconomy is about land, sun, water and nutrients – food and energy are the keys

Society must understand; totally new structures are needed

We are not alone, solutions for developing coutries are needed, too

Bioeconomy as business:

Need for economic tools and R&T&I

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Main findings of the web survey- WHEN ASKED (first thought):

- Competitiveness of bio-businesses as a whole (access to biomass + use of biotech)

- Enabling environment needed (policy frame, regulation, financing, incentives)

- Internal competition between different bio-businesses over infinite resources (e.g. material vs energy)

- WHEN EVALUATING OTHER’s SUGGESTIONS (giving it some thought):

- Bioeconomy is essentially about nutrients, water, land, … NOT biomass !

- Strong call for paradigm shift in thinking related to natural resources and well-being

- New societal structures are needed to secure food and energy for the growing population in conditions of resource limits

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- WHEN LOOKING OUT OF THE BOX:- Bioenergy is only temporary- International relations will rise

on the agenda- Safety of bioproducts, e.g. food

- HARDLY EVER REMEMBERED: - Business potentials / societal

importance of material flows and ecosystem services

- Potentials of local production and material cycles

http://www.slideshare.net/Maamerkit/bioeconomy-challenges

More information :Eeva Hellström, Sitra, [email protected] Kokkonen, Sitra, [email protected]

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http://www.sitra.fi/en

http://www.sitra.fi/en

http://www.slideshare.net/Maamerkit/bioeconomy-challenges

mailto:[email protected]

Challenges for the Future Bio-Economy

Technology

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