EuropaBio

Dirk Carrez, Public Policy Director for EuropaBio talks to Jane Gardiner from theparliament.com about their latest Industrial / White Biotechnology Policy Agenda for Europe.  The Policy Agenda addresses EuropaBio’s position that the EU needs a Knowledge-Based Bio-Economy to help drive the industry forward. A copy of the Policy Agenda is available under further reading as either a summary or full paper.

What is industrial or white bio-technology?
How does it have the potential to form the basis of a future knowledge-based bio-economy (KBBE)?

Industrial or white Biotechnology is the use of biotechnology for the processing and production of chemicals, bioplastics and biofuels. 

Biotechnology has the potential to form the basis of a future EU Knowledge-Based Bio-Economy (KBBE) and make European society both more sustainable and more competitive.

The Knowledge-Based Bio-Economy’s aim is to use more biomass as a renewable resource and to be less dependent on fossil fuel. 

We therefore need all the technologies, biotechnology being one, to be used to transform biomass into a range of different products.  These products range from fuels, chemical applications, energy, pulp and paper, detergents, plastics, clothing, textiles and so on. 

 Biotechnology and biomass derived products already touch our every day lives. For example biofuel such as bioethanol, enzymes in detergents which mean effective washing can take place at 30°C instead of 60°C , biodegradable plastics for packaging, wrap and drinking cups, fibres for clothing and carpets, vitamins and dyes to name a few.

Please explain the knowledge-based bio-economy (KBBE) and its importance for Europe. What political measures could support this?

The importance for a Knowledge-Based Bio-Economy in Europe is that through these technologies the EU will become less dependent on fossil fuel, which is of both economic and environmental importance. 

It has been shown by different independent studies that bioprocesses often have a much lower environmental footprint compared to the more conventional technologies and processes.

Why? Because biomass produced products not only use less energy to produce the same chemicals, materials and plastics as conventional practices but also produce less waste and less CO2. 

Considering Europe’s commitment to the Kyoto protocol this is a very important impact.  This is why a Knowledge-Based Bio-Economy in Europe is so important.

Where energy is concerned, biotechnology however is not just limited to growing energy crops where many are concerned about the sustainability of such land use. So when the Commission recently communicated its energy strategy, “second generation” biofuels were an important topic within the whole climate change policy of Europe – this involves using biotech processes to use the waste left over from agriculture and convert it into bioenergy.  That is also why DG Environment has taken up Industrial Biotechnology as a key technology in its Environmental Technologies Action Plan (ETAP). 

Sometimes we need political measures and incentives to develop further these technologies and this is the aim of ETAP.  It is also important to create a comprehensive roadmap to chart the way towards the Bio-Based Economy and prevent fragmentation of EU policies.

What is the danger of fragmented EU policies?

Industrial biotechnology drives a lot of forces, delivered by a lot of DG’s and this is very positive.

The Commission has taken up industrial biotechnology as an important technology and it has been incorporated into many European policies, the most important being research and innovation, sustainable development, climate change and energy, biofuels and finally the European biotechnology strategy itself.

There is a biofuels technology platform, there are biofuels directives, a biomass action plan and a European biofuels strategy. DG Agriculture is working on the reform of the sugar regime – and industrial sugar is important for biotech fermentation processes.  DG Environment has also taken up industrial biotechnologies into the environmental technologies action plan, and so on. 

However every DG is developing its own strategy in quite an independent way and there are dangers associated with this. For example, biomass has to be used to produce biofuels.  The target for biofuels to replace classical fuel for transport has previously been set at 5.75% by 2010.    But calculations show that using the available current technologies around 20% of the land available in Europe is needed to achieve this target.

The Commission recently announced that by 2020, 10% of transport fuels should be biofuels.  This means we need even more biomass than the previous estimation and we need to seriously think about how we are going to achieve this. 

This requires effective and coherent strategic research.  We cannot afford to have the effectiveness reduced via fragmentation of delivery. 

Other DG’s, along with industries, are also working on the fact that we can produce chemicals and plastics from biomass. This is another biotechnological strategy working toward sustainability that also requires coordination.

What we need is an independent overview to ensure we are developing a coherent policy to achieve these targets otherwise competitive biomass could become deadlocked.  For example, if demand of biomass is high then the price will be high and the competitiveness of the industry will be affected. This is a danger.

The aim of a Knowledge-Based Bio-Economy is to achieve a sustainable technology in a sustainable industry which is good for the environment while still being economically competitive.

According to your policy agenda, how do you see support towards biomass and the knowledge-based bio-economy (KBBE) being implemented?

When politicians talk about innovation they talk often about research funding.  In the area of industrial biotech we are very happy to see that the Commission has developed technology platforms as a tool to develop the content of FP7 – the largest of Europe’s research programmes run by EU Commission. 

EuropaBio is coordinating the industrial biotechnology section of the Technology Platform on Sustainable Chemistry (SusChem) and is also a major stakeholder in the Biofuels and Plants for the Future Technology Platforms. The aim of these technology platforms was to develop the Strategic Research Agendas that we need in Europe for the next ten to fifteen years to develop this technology. 

The Commission is now really looking to these research agendas to develop the content of the next FP7 programme.  This is very positive and FP7 has allocated funds to KBBE.  But also a lot of Member States are starting up programmes in the area of industrial biotechnology and there is an EC funded network called ERA-NET which brings together the various budgets in the area of white biotechnology from Research Councils around the Member States.

However, if you are to develop a competitive knowledge-based industry in Europe, you have to transform the knowledge that is created by research into new products and processes that can be commercialised. This brings new money that can be reinvested back into research. So this requires going one step further than only research funding. 

To help transform this knowledge into new products there is a real need for demonstration projects and research oriented pilot plants.  If industry together with academia, Member States and Commission, in public-private partnerships, can invest in this type of pilot plants then they can test whether a certain process can be scaled up.   If it can be shown that this process works on a larger scale, then industrial partners can have the confidence to start making the huge investments needed to create these production plants.

I am confident that the development in Europe of the KBBE will occur through the already positive support of DG Research and the European Investment Bank, both of whom have expressed initial interest in developing such demonstration projects.

Beyond the research phase what practical steps can be taken and how can this be implemented at European and Member State level?

After the innovation part, you can also stimulate and promote the use of bio-based products and processes.  Sometimes they are more expensive so we need to explain the benefits and provide some incentives to promote the use and purchase of bio-based products in the market. 

To do this we can provide, both at European and Member State level, some market incentives to stimulate the commercialisation of bio-based products.  For instance public procurement rules could be very helpful. This has been developed in France and is working well.

Temporary pricing measures and tax breaks can help to introduce a product onto the market until critical volume and so commercial viability is reached. 

The whole area of biofuels is a good example of this.  Biofuels are more expensive than classical fuels and Member States are allowed to give tax exemptions to assist in the introduction phase. 

Another example is labelling of bioplastics depicting that they are biodegradable or bio-based.  This can be used in retail at point of sale.  

We can also stimulate bioprocesses in industry by developing a cheaper and faster approval system for sustainable products and processes.  To date if an industry develops a new process or product which is more environmentally friendly than the conventional process or product, it still has to be registered. 

This can be time consuming and expensive.  By developing a faster and less expensive regulatory system or even preferential treatment for environmentally friendly products, entry into the market could be fast tracked. 

This would help to develop new market incentives to overcome the hurdle of high investments.  Bearing in mind the Kyoto protocol, if a technology / product can illustrate a reduction in CO2 emissions, then industry could be stimulated to invest in it.

What does EuropaBio see as necessary to facilitate an effective knowledge-based bio-economy (KBBE)?

What EuropaBio proposes is to nominate a “Knowledge-Based Bio-Economy Co-ordinator” to oversee the coordination of the policies and to develop a real roadmap toward the Knowledge-Based Bio-Economy at both European and Member State level.  T

his is the real hurdle to overcome - having coordination, a coherent policy and a strategic roadmap toward a bio-based economy.

We also need to stimulate and support innovation, and to promote the production and use of bio-based products. 

Part of this is creating the awareness amongst stake-holders.  A lot of people are aware of biotechnology because of the GMO debate or because of the healthcare applications – such as vaccines - and the stem cell research debate.

However industrial biotechnology is a little different as applications cover a wide range of industrial sectors from detergents to fuel to vitamins to textiles and that is why it is a bit more invisible. 

Creating awareness among stakeholders which includes politicians, industry, academia, consumers, farmers and of course investors is vital.  This would also be part of the requirement of rolling out the KBBE and appointing a coordinator and task force.

Investors are especially aware of red or healthcare biotech but not so much of industrial biotech. This needs to be addressed.

What role do Small and Medium sized Enterprises play in the industrial bio-technology sector?

Small and Medium sized Enterprises (SME’s) or Young Innovative Companies as we like to call them at EuropaBio play a very important role. 

Compare Europe to the United States and we see that the States are mainly focusing on bioethanol and bulk chemicals like bio-plastics. 

Europe is very strong in enzymes because the main enzyme producers are Novozymes and Danisco/Genencor - both European companies. Europe is also number one in fine chemicals because of the larger companies such as DSM, Degussa, BASF and Bayer.  

There are also a lot of smaller companies in industrial biotechnology providing what we call platform technologies to develop or produce certain biochemicals or pharmaceutical ingredients. 

These SME’s collaborate with the larger chemical companies to develop new chemicals via biotechnological processes: they have developed and patented a certain screening process which is used as a service for the larger companies.

This is vital in the development of industrial biotechnology and Europe’s aim to develop, for example, fossil fuel replacements.

You have mentioned that raising capital for knowledge-based bio-economy (KBBE) related SME’s is difficult?  How can this be overcome?

It is difficult to raise venture capital in Europe for all SME’s.  But the big problem in the area of industrial biotechnology is raising awareness amongst investors. 

They know red and green biotech but not white biotech. The activities of many of these SME’s are different and so they need a different funding mechanism. We are quite happy to see that some private European Venture Capital companies have seen that and are developing a different type of funding – more project orientated than product orientated. And to assist this we really have to continue raising awareness amongst private venture capitalists.

We are also discussing with the European Patent Office and the European Commission to do something special for the SMEs in Europe, and especially for the Young Innovative Companies. 

Patents are three to four times more expensive in Europe than the United States, and it will still take years before we will have a single European ‘community’ patent, so we have been asking to create a temporary SME office such as the EMEA has set up in London for registering new pharmaceuticals. 

Then SME’s would only have to pay a fraction of the normal costs to protect the results of their innovation, which would facilitate entering the market as soon as possible and passing on the benefits of research to the European Community.

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