Bio-economy could help EU achieve its climate goals

Transitioning to a bio-economy goes hand-in-hand with embracing the circular economy, and will boost growth and employment, says Henna Virkkunen.

Henna Virkkunen | Photo credit: European Parliament audiovisual

By Henna Virkkunen

Henna Virkkunen (EPP, FI)

26 Sep 2016

As Europe slowly transitions to bio-economy, a lot could be done to speed up the process. There are already plenty of examples of advanced biotechnology in the fields of agriculture, health and energy, and the potential for new innovations is huge. 

The bio-economy often goes hand in hand with the circular economy, which is currently one of the hot topics in the EU. The bio-economy could also help us achieve our climate goals.

The European Commission and Parliament are working on a wide variety of energy and climate issues, such as the EU emissions trading system (EU ETS), land use, land-use change and forestry policy (LULUCF) and the revision of the renewable energy directive (RES). 


The forest industry in particular is waiting for the results of ongoing work on the sustainability criteria for biomasses and the calculation methods for carbon sinks. All these policies are very important considering the future perspectives and possibilities of the bio-economy.

In most of Europe, attitudes and especially expectations towards biotechnology are positive. But that is not the case everywhere. In many European countries, forests have been logged down and priceless natural resources have been heavily damaged. Therefore, the conservation of remaining natural resources is often the number one priority. 

Conservation is of course the right thing to do if nature and diversity are in danger. However, at the same time it should be remembered that there are also countries that have rich natural resources that can be utilised in a sustainable manner.

Finland is one of the European countries that have large forest resources that are well cared for. There is a long tradition of responsible forest management and cooperation between different actors. The government, forest industry and environmental protection and nature conservation NGOs are in constant contact. 

All the different stakeholders understand that it is in everyone's interest for natural resources to be treated with care. This approach offers firm basis for a prosperous bio-based industry.

The forest industry also has strong trust in the future prospects of the bio-economy. The Finnish pulp and paper company Metsä Group is currently building a next-generation bio-product mill in Äänekoski. 

The mill will produce softwood pulp for the paper industry and use by-products to generate renewable electricity. It also has capacity for wide-scale production of bio-products. All of the energy the mill requires will be generated from wood and the mill will not use any fossil fuels.

The mill is a model example of innovative biotechnology and it also puts into practice the idea of a circular economy: all the side products and side streams will be utilised. 

A whole ecosystem of small companies is expected to evolve around the mill. The project is expected to create 6000 jobs during the construction phase and when completed sustain more than 2500 jobs in the entire value chain, of which approximately 1500 will be new.

This is exactly what Europe needs: future-oriented investments that create great jobs and growth. The Äänekoski bio-product mill also serves as an example of how companies can make the most of public investment funds.

The company has received an investment subsidy for renewable energy from the Finnish government and the project also benefits from a loan by the European Investment Bank, part of it guaranteed by the European Fund for Strategic Investments.

The rapid development of advanced biofuels is another very promising phenomenon. The use of biofuels will hopefully increase significantly in the near-future, especially in aviation. The technology already exists both for airplanes and producing biofuels.

Many airlines have already flown commercial flights using biofuels that are produced out of waste. Just like the earlier bio-product mill example, developing biofuels addresses many existing concerns: using waste saves natural resources and increases the share of renewable energy, which helps to cut CO2 emissions and fight climate change. 

However, both of these cases prove that new innovations and ideas require work. Behind these success stories are long and ambitious research and development projects.

The creation of new products and processes require investments in R&D. Highly refined products, knowhow and skilful employees are the keys to the success and competitiveness of the European industry. 

Since public grants for R&D have decreased in many European countries, close cooperation between universities, research institutions and companies is needed. Companies should also utilise Horizon 2020, where €80bn have been earmarked for research and innovations.

There is money allocated both for high-level academic research and for the R&D purposes of SMEs. Europe can and should be the forerunner in the field of bio-economy.

The EU and its member states should boost investments in innovation and infrastructure, and be careful not to over-regulate the bio-economy. Europe also needs to be open to the new ideas and new business models that come with technological advancement.


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