Imagine a world where we can produce everything we need from food to energy – using renewable resources like plants, algae and residues. That's the goal of the bioeconomy. The aim is to turn nature's gifts into everyday sustainable products.
For instance, materials such as bioplastics can lead to the development of more sustainable biodegradable products that reduce plastic waste and open up new opportunities in various industries. Biogas from agricultural residues, for example, can be a good substitute for fuel in vehicles.
Biogas also can be used to produce steam to turn turbines that create electricity, or it can be used for cooking and heating. The production of biogas also creates a waste product that can be used as fertiliser for farming.
The bioeconomy is a vast and growing sector with big potential to help economies thrive and help countries become more sustainable. The bioeconomy sector employs over 8% of the workforce in the European Union and its success will help us meet our climate and carbon neutrality goals.
Europe has all the prerequisites to be a leader in the bioeconomy. It has a strong research and development sector, a large, educated workforce, vast amounts of feedstock such as agricultural and forestry biomass, and it offers a lot of social and economic support.
However, bioeconomy companies and innovators face several hurdles when trying to grow. There is still limited demand for bio-based materials and products. Financing is tough to find in this sector, partly because bio-based projects are often perceived as risky investments and struggle to attract private equity. Their innovative nature and long development periods can scare off investors. Many of the technologies themselves are still maturing, requiring more research and innovation. Addressing these challenges requires teamwork from industry leaders, policymakers and financial institutions. In fact, a clearer regulatory agenda and a more supportive regulatory environment could greatly help the development of the bio-based sector, allowing it to bring sustainable products and technologies to commercial scale.
With the financial support of the InvestEU Advisory Hub, EIB Advisory conducted an assessment to understand the investment needs in the bioeconomy, in support of the Circular Bio-based Europe Joint Undertaking and the establishment of a deployment group on finance and investment. By identifying key financial actors, mapping current financial instruments and funding shortages, and by assessing market needs, EIB Advisory experts helped policymakers, bio-based industries and financial institutions understand how to make financing more available in the bioeconomy.