Industrial biotech: A policy agenda for Europe

Sustainable Chemistry Technology Platform
Industrial or white biotechnology has the potential to form the basis of a future EU knowledge-based bioeconomy and make European society both more sustainable and more competitive. But to realize the potential, a number of policy steps must be taken. This report puts forward concrete policy proposals to encourage the development of a Knowledge-Based Bio-Economy (KBBE).

Of primary importance is the need to develop policy coherently across the EU, and to coordinate its implementation. There are many policy strands and activities which relate to biotechnology – biofuels, research and innovation, climate change, sustainable development, CAP reform,  ETAP etc – and they must be harmonised for consistency and efficiency. Appointment of a KBBE coordinator by the Commission to bring together activities in the various DGs is essential. At the same time, a KBBE task force is needed to coordinate Member State programmes.

It is equally important that the policy should be based on sound evidence. This makes  data gathering, collation and analysis the task which underpins the whole process: good policy cannot be formulated without good data. At the other end of the policy making process, a comprehensive roadmap is needed to chart the way towards the bio-based economy and allow both coherent implementation and good impact evaluation.

With the enabling policy framework in place, full support then has to be given to innovation in biotechnology in general, and white biotechnology in particular. This is a research-driven activity, and Europe must build upon its undoubted strengths in the area. This means in particular ensuring that the various relevant Strategic Research Agendas from the KBBE related Technology Platforms (particularly Sustainable Chemistry, Plants for the Future, Forestry and Biofuels) are properly planned, funded and implemented within the Framework 7 programme and at Member State level via for instance ERA-Net.

Within this context, it is important to foster the synergies between the various participating sectors, for example by stimulating public-private partnership and industry participation in general, promoting inter-disciplinary research and striving to avoid fragmentation and even duplication of programmes. This cooperation must also extend downstream to demonstration projects, in particular to enable the development of  flexible, research-oriented pilot plants to validate the concept of integrated and diversified bio-refineries. Appropriate funding schemes will be needed to allow multi-company consortia to collaborate in such pre-competitive activities (“first of a kind” biorefineries).

Moving beyond the research phase, there are practical steps which can be taken to facilitate the move towards bio-processing in manufacturing. A necessary prerequisite is the assurance of  a secure and affordable supply of biomass, for which a combination of policy, innovation and financial incentives will be needed.

With the supply of feedstock assured, the  conversion of existing industrial processes to biobased ones can be encouraged via streamlined regulatory processes (akin to the “fast track” system used by the American EPA), assessing the opportunities for biobased processes and products to contribute and benefit from the EU’s Climate Change Policy, and providing market-based mechanisms to overcome investment hurdles. This manufacturing push can be further enhanced via market pull effects. Demand can be raised in a number of ways: for example by setting appropriate public-sector procurement standards, short-term positive price discrimination or promotional labelling (eg “bio-based”)

While all these actions will have a positive effect, they will be more effective if supported by  a coherent communications plan to raise awareness of the potential of industrial biotechnology, the use of renewable resources and the benefits the Knowledge-Based Bio-Economy will bring. The plan should take account of all major stakeholders, including industry, policy makers, consumers, farmers and the investment community, but early stage (“upstream”) open engagement with the general public is particularly important.

Smaller companies make up an important part of this relatively young biotechnology sector, and it is they who will provide much of the necessary innovation. Because of their early stage of development, there are a number of hurdles they find more difficult to overcome than larger companies do. SMEs need help in particular to  reduce the cost of Intellectual Property protection. Ultimately, a single European Community patent will provide the answer, but in the meantime a specific SME application process is needed at the EPO. Early stage search costs could also be reduced by introducing a searchable database flagged for industrial biotechnology applications.

While intellectual property forms the basis of innovation, finance is needed to derive value from it. “Proof of concept” work is often funded by grants for start-up companies, and SMEs could benefit from a similar grant system for work on environmentally friendly technologies.

More generally, greater awareness of the potential of the industrial biotechnology sector is needed among the investment community in order for funds to be made available more easily. The necessary communications programme is a vital part of the overall stakeholder outreach effort. But this in itself will not be sufficient. Because of the particular difficulties of raising capital for SMEs, a new investment model will be needed which sits between loans and conventional private equity, to provide finance along with equitable risk sharing. As the industrial biotechnology sector becomes increasingly successful, venture capital will become more available.

In conclusion, to establish a sustainable and knowledge-based bioeconomy in Europe, efforts are needed:

  • To establish a coherent European Policy Agenda for Industrial Biotechnology and the Knowledgebased Bioeconomy (KBBE),
  • To stimulate and support innovation in plant science and industrial biotechnology,
  • To promote production and use of bio-based products and processes,
  • To create awareness amongst all stakeholders, and
  • To improve investment in KBBE-related SMEs

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