Business leader: ‘Europe lacks a clear policy framework for bio-based products’

Europe needs stronger policies for bio-based products in order to make it clear that virgin fossil products do not compete in the same category, Rob Beekers argues in an interview with Euractiv.

Rob Beekers is Business Development Director at Cargill, an American global food corporation. He is chair of the Bio-Based Industries Consortium and Chair of board for the Circular Bio-Based Europe Joint Undertaking (CBE JU).

He spoke to Dave Keating for Euractiv.

Biorefineries in Europe are struggling to scale up. What is hindering that right now?

That depends a little bit on where the product of concern is based regarding its readiness level. For products ready at commercial scale, where there are maybe one or two biorefineries already existing, the question is, why aren’t more investments in larger things happening.

I think the most important factor that explains why this, even across the world, may not go as fast as we would like is that there’s still quite some risk in making investments in biomaterials, and there’s also a lot of capital needed.

So, when you deal with companies like Cargill, petrochemical companies, or a lot of larger enterprises, they have options where to invest in. It’s about a lack of attractiveness of such investments that is hindering larger-scale accelerations to happen.

Whether these happen in Europe or somewhere else depends on the attractiveness of Europe as a site for those investments. And there, when we talk about the availability and cost of feedstock and energy, that may limit the acceleration of those investments in Europe. Natural gas in the US is significantly cheaper when compared to Europe.

When you look at new technologies, products that are out of the lab but don’t have commercial scale yet, like the flagships in the Circular Bio-Based Europe Joint Undertaking, I think in addition to the challenges I just mentioned for established products, you also have challenges that you need to demonstrate that your product works at commercial scale. That’s pretty expensive because you need to go out of the lab, you may even need to go out of the lab and into pilot facility. Is that pilot facility there? So we could scale it up by having more access to pilot infrastructure in Europe where companies can go.

There’s also the access to capital. We’ve had many more start-ups approaching us today than two or three years ago when the cost of capital was much lower. When you have a new product, there’s a lot of complexity in getting the product approval and very high costs. Permits to build plants, comparisons to demonstrate [feasibility], lifecycle assessments, these are things that can be very time-consuming and very costly.

The costs are getting too high before you get any income. So, I think scaling up is really key, but it turns out to be difficult in the current environment.

Is it important that bio-based products have a level playing field with other products?

You often hear companies ask, why isn’t there a level playing field? Personally, I don’t like the phrase level playing field when it comes to comparing products for the linear economy and the circular economy.

A level playing field should be created for products within the circular economy, so the moment you have renewable products that can be used for food for feed or for materials, is there a level playing field between those areas? Well, if you look at the fuel space, there are mandates happening there that have accelerated the take-up of bio-based products. Such mandates have to be accelerated.

But to compare it with virgin fossil, I’m not sure we should try to strive for a level playing field because actually, if you really look at a true circular economy, you can’t say that a virgin-fossil-fuel-derived product has a right to play on that playing field.

To make that comparison and to require that lifecycle assessments demonstrate that the product is better than virgin fossil gives the impression that continuing with virgin fossil is an option. I think that’s something that we need to be more clear about.

What are some of the best practice examples from biorefineries in Europe?

Greenfields are good, but the more you’re greenfielding, the more risky it is and therefore you don’t see so many greenfields. So, it’s best to look at existing clusters where you may have utilities, where there might be synergies between food, feed, chemicals and fuels. You have that in areas like North Sea ports – look at Antwerp, Ghent and Vlissingen.

You have start-ups there with biorefineries for food, fuel refineries and petrol refineries. There’s I think two flagships of CBE that are located in that hub, and not for nothing, because there’s synergies. You have the Lanzatech one with CO2 from Tata steel, you have a flagship project that is looking at a sidestream from a food biorefinery.

In those clusters the chance for success are higher, in particular when you get in those clusters investments in renewable energy infrastructure. Renewable energy will be a key to success for biorefineries. You need access to green electricity, green hydrogen.

Europe should make use of those clusters, and it should be earmarked which clusters are the most promising and those should be invested in. Not just for the benefit of the petrochemical companies that are there, but also the biorefineries.

If you look at the US, at the cluster in Houston you see a huge amount of investment in renewable energy, renewable hydrogen. Will biorefineries benefit from that? Probably not, because there’s not very many. So how can we make the biorefineries become more competitive? It depends on the infrastructure that’s around those biorefineries.

I think Europe has a really good footprint for that and we should leverage that.

What does the sector most need from EU policymakers right now?

We had a few workshops with the with the Bioindustries Consortium in the Spring and Summer bringing participants from the Commission and industry together. They were on various topics but one of the recurring themes in the feedback from people in these workshops was that Europe lacks a clear policy framework for bio-based products.

Without a policy framework you’ll see movement on the bioeconomy but not a transformation. It will remain in specialties formulations. If you look at the flagships of circular bio-based projects, I think from the 16 flagships we have now there’s 13 on specialties and formulations. That’s logical because these are products that are sold already at higher prices on the market, so you go with a product that’s a bit more expensive in terms of costs. Then in overall terms, percentage-wise, the increase might be less and also the market might be more willing more to pay for that, like with cosmetics for example.

At the moment we’re talking about making more renewable and bio-based products the norm. That means you cannot just talk about specialties and formulations, you have to talk about the main building blocks that materials are made from today.

We need to continue with specialties, and flagships have been successful in that, but we’ve not succeeded in really touching the backbone of the products we use today. How are we going to phase out virgin fossil? Of course, we need to reduce, reuse and recycle. But for the piece where you cannot have that material go back you will need virgin material, and that virgin should be renewable. That means talking about products that need to be produced in the millions of tonnes, not in the thousands of tonnes. That is I think what is really needed in the policy framework.

We also need a recognition that all sources of renewable carbon need to be appreciated in Europe. Europe focuses a lot on recycling, which is key. But we also need to look at bio-based carbon, which is not really valorised so much in Europe compared to Asia and the US.

Of course, there’s CO2 which you can use as a building block to make materials, but you need a lot of hydrogen generally for that. We will need all of those for a transformation and this also means that if you look at bio-based materials, it’s not just waste.

That’s also what you hear in Europe, that you can use materials as long as you take it from a side stream or waste. That will also be needed but it will not be sufficient. There are sometimes quality concerns about waste. Does it have the size to become a real substitute for products used today from the chemical industry?

As a last point, of course it is very important for a sustainable planet that the European Green Deal will do this. But Europe should also look at it as an economic opportunity. I think one of the reasons this progress on biomanufacturing is happening right now in the US, with all the funding coming there, is that there this is seen as an economic development. They don’t want to lose out to Asia.

In Europe, we need to consider the bio-based sector as an economic sector for sustainable growth and not only as a sector that will help to meet climate change targets. Those targets are key, but we need to still also have industries that we work in and make a living from.

[Edited by Alice Taylor]