Stop regulating biosolutions as chemicals, requests Novonesis CEO

Fresh from a company merger, Novonesis CEO Ester Baiget came to Brussels with an important ask – to create a level playing field for biosolutions; arguing that it makes no sense to treat enzymes and proteins as if they were manmade chemicals.

Baiget believes outdated rules mean that European citizens are missing out on the benefits biosolutions can bring. Euractiv’s Christoph Schwaiger spoke with Baiget just before she went on stage to make her case during the European High-Level Summit on Biosolutions. 

CH: Why do we need to change the regulations in the first place? 

EB: We need to change the regulation because it was made with a lot of love and good intentions, but it focuses on the solutions of the past.

It’s a regulation that categorises biosolutions as chemicals. Biosolutions – enzymes, proteins, microbes – are found in nature and are brought up to industrial scale. They are biodegradable and can be absorbed back by nature.

By forcing biosolutions through the chemical path, we create unnecessary barriers that add no value to consumers. They hinder the speed of the penetration of the solutions of the future. And time is precious.

It takes Europe six to eight years to register a microbe to replace a fertilizer. In the US, you can do this in two. Europe is losing out on solutions to consumer problems.

The tragic war in Ukraine made Europe aware of its strong dependence on fossil-based solutions from Russia. We had to decouple – heading towards wind and solar energy.

But biosolutions are also a strong component of alternatives. As an added bonus they are produced locally. You can make biodiesel from biomass to replace gasoline. We can make plant-based protein solutions that lead to up to 90% lower CO2 emissions.

But eight years for registration means it’s not feasible to implement solutions in time. The solutions already exist. If we would implement the solutions that already exist to their full potential today, in a blink, we’d reduce CO2 emissions by 8%.

The impact of biosolutions is expected to triple within the decade. Even if Europe won’t change its regulations, China and the US will.

The leading companies are in Europe but our regulation is based on the past.

CH: It all sounds great and many people would be convinced by these arguments. And it seems that fighting against this would be fighting a losing battle, but there’s still some resistance in the EU on this. How are we going to convince the unconvinced?

EB: We’re not facing resistance. I think what we’re facing is the willingness to sit at the table.

We companies have not done our fair share of responsibility of bringing our voice and explaining what good can look like.

Simply put I think we have the heritage of the past coupled with an economy based on fossil fuels run by regulations that are also based on fossil fuels.

CH: To make this happen we need money. How are we going to get the EU to start subsidising biosolutions more rather than continue to subsidise fossil fuels?

EB: You haven’t heard me asking once for subsidies. I ask for fair play. I ask for regulation which does not unnecessarily hinder the speed of penetration.

Stop subsidising the past. Stop subsidising fossil-based solutions. Eight trillion US dollars. That’s what we governments spend on subsidising the past.

Just stop subsidising fossil-based products, then create new regulations and let the best one win.

Once the regulations are in place investment will come in. Because these are the solutions of the future. Don’t blink. Be consistent. And stick to this path. We just don’t want unnecessary hurdles. Sure, if on top of that there can be subsidies that’s great.

CH: Something that might help convince people to increase subsidies is if this sector creates new jobs. Can it? 

EB: For every job you’re creating in biosolutions, four more jobs are created in the value chain.

And those are local jobs. It’s jobs in agriculture, in production. They are jobs that allow you to deleverage. You won’t need chips from China. It’s biofermentation and feedstocks produced and used locally.

Then think about all the other hidden benefits they offer since they respect the planet more. Consumers turning to biosolutions means less water pollution and needing less energy.

CH: Food security. Right now I’m thinking of the grain ships that were stuck in Ukraine due to Russia’s aggression and the headaches that caused. Will biosolutions be able to ease other challenges we’re facing?

EB: I’m not going to say biosolutions are the holy grail. But we are a component of the holy grail. The world is not black and white. The future is one with fossil-based solutions, with wind, with cows. But, there are also going to be much more biosolutions.

Biosolutions can fuel the world – by providing sustainable fuels, by feeding livestock, and also feeding people.

From a food security perspective, biosolutions are also going to help. The world’s demand for protein is expected to double within the decade. Today, 70% of our agricultural land is used to feed animals that in turn are going to feed humans. We cannot double the protein supply by doubling this method. We need diversification, optimisation, and improved yields.

Using biosolutions in feed means you enhance absorption and digestion. You increase the yield while decreasing the use of antibiotics.

European regulations are hindering the penetration of novel proteins. In Europe, consumers eating plant-based meat have to use products that use chemicals, texturizers, and foaming agents. We’re not allowed to use ingredients that can be fermented naturally because of the regulations we have. We need new rules that allow us to eat healthy options.

CH: Venture Capital being less enthusiastic about Europe [compared to the US], does that affect you?

EB: No. Clear regulation means investments would come. We’ve just built a novel protein plan in Nebraska in the US. We invested $300 million in a state-of-the-art building in the US. We didn’t do that for the subsidies. We did it because the demand is there.

CH: What will it take to get Novonesis to invest in Europe, to build something like that here?

EB: Demand. And for that, you need to change the regulation. Consumers cannot demand products they can’t use.

Europe has the leading companies in biosolutions. Novonesis is for sure a leading company here. But, I see similarities with what happened with solar technology. It was created by leading European companies in Europe. Europe started investing but then it dipped. There needs to be consistency.

CH: Did one or some of these factors lead to the Novozymes and Chr. Hansen merger [to become Novonesis]?

EB: The reason why we combined these two companies is because together, we’re just better than we were separately. We are better equipped to bring answers to those solutions and those needs in a much better way.

We are a European company, but we are also selling in the US and China. We see the pull from our solutions there in a very strong way.

CH: Are you thinking of shifting markets or do you retain a European base for now? 

EB: The headquarters is in Europe.

CH: And you’re planning on keeping it that way? 

EB: Yes. The headquarters will continue to be in Denmark. But today Europe accounts for around 40% of our sales. How will that be in the future? We shall see.

This article is part of our special report Biosolutions – the hi-tech ecosystem accelerating Europe’s Green Deal.

The interview has been edited for clarity and brevity.

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