– a growing concept on the international stage

The term “bioeconomics” is being used increasingly frequently in the areas of research, business and politics. At the same time it is a term that does not have one unambiguous meaning, but its scope is determined
on the basis of the purpose behind the desire to create a bioeconomy.

This purpose can relate to environmental, business and/or security policy. The term includes products that are manufactured from forest materials. Some definitions also include products created from fluid resources, i.e. water, wind and sun. There are also variations in how services, such as the tourism industry, are included in the concept of bioeconomics.

USA – a broad vision with multiple policy instruments

The federal government has a strategy for bioeconomics that focuses on agriculture and forestry.

At a federal level there are several policy instruments that aim to develop new technology and generate demand for this technology. It is above all about support for technology that is nearing commercia­lisation. This commercialisation is assisted by means of several public/private partnerships and collaborations. The starting point is to understand the customers’ needs.

In some areas, there is a belief that technology-specific policy instruments are needed in order to create demand for new technology. Since 2005 there has been a requirement for defined volumes of biofuels that must be sold every year in the form of what is known as the Renewable Fuel Standard. During the first few years this created demand for ethanol produced from American agricultural products. There is, however, an expectation that advanced fuels from the forest will account for an increasingly large proportion. But this expectation has not been realised, which has contributed to criticism of the system and a reduction in the volume requirements in recent years.

Another policy instrument to create demand for bio-based products is BioPreferred, which has been in existence since 2002. This policy instrument has two main components – product labelling and requirements in connection with public procurement. All federal bodies must give preference to a specific, increasing proportion of bio-based products in their public procurement processes. In 2016 the US Department of Agriculture, which manages the system, identified 14,000 bio-based products in 97 categories with volume requirements in procurement. These include detergents, paints, lubricants and carpets.

Japan – a focus on innovations

Japan has just as much forest as Sweden, but for various reasons there are high levels of imports. The biggest area of application is the construction sector. At present around one house in two is built using timber.

Japan has a long history of successful material research, of which forestry research is an important element. When it comes to new areas of application for biomass, there are a number of projects under way, in the areas of both academia and business. The State supports this by creating shared meeting places for research institutions, companies and regional bodies. Japan is a particularly strong nation with regard to research into nano­cellulose. The Markus Wallenberg Prize for 2015 was awarded to Professor Akira Isogai for the development of a new, extremely energy-efficient process for the production of nanofibrillated cellulose from wood pulp. A consortium by the name of the Nanocellulose Forum has been established to coordinate the many different initiatives surrounding nano­cellulose in Japan. Another purpose of this forum is to promote commercialisation by implementing activities with potential customers.

Finland – preserving a forest nation

Finland’s forestry sector was hard hit by the financial crisis in 2007-2008 combined with the global fall in demand for printing paper. In recent years, however, a number of political initiatives have succeeded in the creation of a more competitive forestry industry, the aim of which is to make sure that the country continues to be a prominent forestry nation. This has been achieved through ambitious political goals, more research funding, bigger export initiatives and policy instruments that generate demand for biofuels from Finnish raw materials.

The Finnish Ministry of Economic Affairs and Employment believes that more than SEK 20 billion will be needed in public investment over the next ten years in order to achieve the bioeconomic goals of increasing the value of the bioeconomy to almost SEK 1,000 billion by the year 2025, at the same time creating 100,000 new jobs. Of this SEK 20 billion, about half is needed for additional venture capital for companies, around SEK 5 billion for research and innovation, and just over SEK 5 billion for pilot projects and demonstrations.

The current Finnish government has said in its policy statement that the proportion of renewable fuels shall be 40 per cent by the year 2030.¹ This is to be achieved with the aid of a quota obligation and a differentiated carbon dioxide tax on fuels based on their life cycle emissions. The latter in particular will contribute to benefitting biofuels from forest materials.

Different mix of policy instruments in different countries

Japan has an innovation strategy in the field of bioeconomics that is similar to that in Sweden. It involves above all economic support for research and governmental initiatives that aim to help companies commercialise new technology. This means that the State is focused on reducing the technical risk in connection with innovations.

In addition to this, the USA and Finland have chosen to manage the market risk for innovations in certain areas. This is through biofuels in both countries and public procure­ment in the USA. With regard to biofuels, it is interesting to compare Finland with Sweden, as both countries are investing in supporting research in this field. In the absence of support systems to create demand for Swedish biofuels, i.e. to reduce the market risk, there has been a significant fall in the production of biofuels since 2012. Production in Finland is increasing steadily and matching domestic consumption. This indicates the importance of creating a well-structured policy mix for an individual technology.

The question is whether the need and desire exist for an innovation policy to develop a bioeconomy. To answer this question, the bioeconomy needs to be divided into different parts, for example construction materials, paper and pulp, biofuels, agriculture, forestry, nanocellulose, bioplastics, etc. Different policy instruments will be needed in these areas to enable a national industry to be developed. One important political question is which areas are to be developed, as this is the basis of the formation of an effective innovation policy in which certain areas will require general and some technology-specific policy instruments. Sweden does not have proper supporting data for such a political prioritisation.

¹ Finland, a land of solutions. Strategic programme of Prime Minster Juha Sipilä’s Government 29 May 2015. Government Publications 12/2015.

Bioeconomics – a growing concept on the international stage

Serial number: Direct response 2016:16

Reference number: 2015/112


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