Barriers to a Bio-Based Economy

The bioeconomy includes a number of technologies and ways to make the things we need from natural resources rather than fossil fuels. What barriers are stopping us moving from a fossil-fuel economy to a bioeconomy straight away? What are the challenges to the development of the bio-based economy and how can we overcome them?

Bioeconomy Barriers

1. Feedstocks

All bio-based products use ‘feedstocks’ sometimes called raw materials. To make bio-based products, feedstocks must be consistently available and be easily transported from rural regions which may lack infrastructure. Biobased feedstocks are often seasonal rather than year-round. Plant-based feedstocks can also be affected by pest attack or by drought. Storage or pre-treatment (doing something to them before they can be processed) of these materials may add to the cost.

2. A Skilled Workforce

Bio-based businesses need skilled workers with industry experience and transferable skills including communication, project management and commercial acumen. Unfortunately all the evidence shows that there are shortages of skilled workers across the sector.

3. Lack of Investment

New ventures often need investment, but getting this can prove difficult for bio-based entrepreneurs. Bio-based start-ups can be expensive to finance and investors may not understand the technology or have a track record of investing in these types of businesses and initial returns may be too low or too long-term to be attractive to investors.

4. Lack of Awareness of and Demand for New Products

Compared to fossil-fuel products with established markets, the high initial costs of production of bio-based products, and the lack of awareness and demand for them, may make it difficult for them to enter the market without support from the government. This could take the form of regulation, incentives, labelling or tax breaks. Similarly, government spending programmes (such as the US biopreferred programme) with a preference for bio-based products can increase the market size of bio-based products.

5. The Cost of Bio-Based Products

Often bio-based products are not cheaper than traditional products. Drops in oil prices in the last decade have exacerbated this problem. Bio-based product production often can’t rely on the economies of scale that fossil-based alternatives enjoy. Customers must therefore be willing to pay higher prices for bio-based products so the performance of these products must justify the costs. There is evidence this is already the case in some sectors, such as personal care and cosmetics.

6. Public Perception

Unfortunately the concept of the bioeconomy is not widely understood and so there is also a lack of understanding about bioeconomy innovations and the solutions they offer. For example, people might not understand the benefits of biofuels or be actively opposed to them if they use food crops as a source of biomass. Increasing public awareness of the bioeconomy (such as this MOOC!) can help to address this and highlight the opportunities offered by a growing bioeconomy. Labelling of products can help consumers to make informed decisions about the products they buy and drive market development of these products.

7. Dedicated Entrepreneurs

Successful bio-based enterprises need committed and knowledgeable founders willing to spend their own time and money developing their products as well as risking potential failure. They need access to technology to enable them to prove that their idea works at a commercial scale and access to finance, whether that be from friends and family, angel investors, grant funding or venture capital. Protecting ideas by obtaining patents can also be expensive.

Read more: Consumers and bio-based: a love story

Companies Who Overcame the Bio-Economy Barriers:

Cellucomp are a Scottish company who make a bio-based additive used in paints and coatings made from food processing waste streams. They secured a 22.6 million Euro investment and are developing a commercial plant to enable them to produce 10,000 tonnes of their material per year.

Paptic make a reusable alternative to plastic bags made from wood fibre. This Finnish company has had 1.9 million Euros of investment and has a production volume of 20 tonnes of material per year. Paptic are working with a number of major retailers to make their packaging more sustainable.