EU offers billions of euros to fund biobased energy revolution

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EU OFFERS BILLIONS OF EUROS TO FUND BIOBASED ENERGY REVOLUTION

Biobased fuels provide the best means to escape Europe’s dependency on oil. But they have to be attractive to business. Giles Crosse examines the EU’s propositions

A few months ago, The European Union (EU) and the Biobased Industries Consortium (BIC) launched a multi-billion-euro public-private partnership (PPP) to inspire the private sector to invest in creating energy from plants and organic waste.

The aim is to restrict Europe’s dependency on fossil fuels. None of the methods to create biobased fuels requires oil. Biobased plastics can be made from plants such as switchgrass and degradable biobased bags can be made from maize. Plant-based ethanol can fuel tomorrow’s cars and lorries.

Some €3.7 billion will fund the EU project between 2014 and 2024. Some €975 million will come from the European Commission and another €2.7 billion from the BIC. The sheer amount of cash will provide plentiful business opportunitiesin Europe’s green economy.

Biobased futures

Until now, biobased technology has been largely at test scale, although there are exceptions. Large firms such as Novozymes have grown fast. Biobased science has been proven to work, but biobased industry still struggles to challenge oil’s stranglehold on manufacturing. Oil-based products, such as plastic, have big carbon footprints. Then plastic takes hundreds of years to break down, or requires expensive recycling. But biobased goods can be turned straight into compost.

The logic behind biobased products is simple, but reshaping Europe’s industrial practices is harder. Today’s factories are geared to using oil and few politicians understand what biobased is. Building a new biobased economy will be hard, but the EU funding is a great start.

Dirk Carrez, Executive Director of the BIC, said: “Without this partnership with the EU, industries wouldn’t have taken the risk to invest in this emerging sector.”

What will the EU plans mean?

Moving away from an oil and import-based society to local, biobased manufacturing would increase Europe’s sustainable economic growth. Tens of thousands of jobs could be created through biobased development. This could revitalise EU industries and reduce greenhouse gas emissions by at least 50%.

The first €50 million funding offer has been made. It contains a total of 16 topics: 10 Research and Innovation Actions with a total budget of €15 million and six Innovation Actions with a total budget of €35 million. Now, businesses must propose their solutions and find a way to create a biobased Europe.

Test bed

Before releasing the money, the EU funded a trial, the EuroBioRef Project. It illustrated how biobased works. Using a €23 million EU grant, EuroBioRef  proved biorefineries can handle grasses like willow. Processing them produces biobased chemicals, plastics, or aviation biofuels.

A private biobased firm called Avantium is another good example of the way forward. Avantium makes a bioplastic called PEF which can replace oil-based plastic in soft -drinks packaging.

‘Without this partnership with the EU, industries wouldn’t have taken the risk to invest in this emerging sector,’ Dirk Carrez, Executive Director of the BIC

“We have made a huge step towards the first commercial scale plant for PEF,” said Tom van Aken, CEO of Avantium. “We closed a financing round of €36 million (US$50 million) from a consortium of Swire Pacific, The Coca-Cola Company, Danone Alpla, and existing shareholders. This investment makes it possible for us to finalise the engineering and design of the first commercial scale plant.”

The clout of Avantium’s financers show how big business is interested in biobased fuels. Big users of plastic, such as Coca-Cola, are worried about diminishing oil. It is in their interest to fund, or even buy out, firms developing biobased tech.

Frank Roerink, CFO of Avantium, said: “When my kids grow up and buy a Coke in a PEF bottle, based on 100% biobased material, we will have made the world a bit more sustainable.”

Change is taking place in the US, too. A new plant called Project Liberty  based in South Dakota, converts corn cobs into renewable fuel. At full capacity, it will convert 770 tons of biomass per day to produce of 20 million gallons of ethanol per year.

This marks a shift in the adoption of ethanol biofuels in North America. With more EU work, similar changes in the European transport world are likely. Building the EU’s bioeconomy will take years and there will be many challenges, not least from the oil industry, with its interest in maintaining the status quo. But Biobased offers enormous environmental and business potential.

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Giles Crosse is a journalist with specialist interest in the developing world, corporate social responsibility, and technical solutions to environmental challenges. His career has taken him to exotic destinations, such as the Peruvian Amazon, and Shallow Waters in Cambodia. He is looking forward to an inclusive planet, where greener business, happier people and better managed resources co-exist.