TABLE OF CONTENTS

1........... Procedural issues and consultation of interested parties.................................................... 4

1.1........ Background to the development of the proposal.............................................................. 4

1.2........ Organisation and timing................................................................................................... 5

1.3........ Consultation and expertise.............................................................................................. 5

1.4........ Results of the Impact Assessment Board consultation...................................................... 6

2........... Problem definition........................................................................................................... 7

2.1........ Bio-based industries in Europe........................................................................................ 7

2.2........ Bio-based industries as a source of green growth............................................................. 8

2.3........ The national and regional potential of bio-based industries.............................................. 11

2.4........ International competition............................................................................................... 13

2.5........ Technological and innovation challenges of bio-based industries in Europe...................... 14

2.6........ Underlying problem drivers........................................................................................... 16

2.7........ Need for EU intervention.............................................................................................. 18

3........... Objectives.................................................................................................................... 23

3.1........ Description of objectives............................................................................................... 23

3.2........ Consistency of objectives with other EU policies and objectives..................................... 26

4........... Policy Options.............................................................................................................. 27

4.1........ Option 1 – Business as Usual........................................................................................ 27

4.2........ Option 2 – Contractual PPP......................................................................................... 28

4.3........ Option 3 – Institutional PPP.......................................................................................... 28

5........... Assessment of impacts.................................................................................................. 33

5.1........ Input parameters........................................................................................................... 33

5.2........ Output parameters........................................................................................................ 38

6........... Comparing the options and selecting the preferred option............................................... 46

6.1........ Comparison of the three options.................................................................................... 46

6.2........ Justification of ratings based upon the assessment of impacts.......................................... 46

6.3........ Preferred option........................................................................................................... 47

7........... Evaluation and Monitoring............................................................................................. 47

7.1........ Operational monitoring.................................................................................................. 47

7.2........ Monitoring progress of technology and markets............................................................. 49

7.3........ Performance evaluations of the JU to be conducted from outside the JTI........................ 49

7.4........ Monitoring the financial commitment by industry............................................................ 50

Annexes..................................................................................................................................... 50

Annex 1 – Glossary.................................................................................................................... 50

Annex 2 – Bio-based industries – Market players and the "BIC".................................................. 50

Annex 3 – Strategic Innovation and Research Agenda (SIRA)..................................................... 50

Annex 4 – Report on the European Commission's on-line public consultation................................ 50

Annex 5 - Current and future potential of biomass as a source of materials and energy.................. 50

Annex 6 – Definition of Technology Readiness Levels (TRLs)...................................................... 50

Annex 7– Overview of research and innovation at regional and national level................................ 50

Annex 8 – Example of a regional bioeconomy cluster moving up-scaling activities outside the EU.. 50

Annex 9 – Detailed description of the specific objectives and link to wider policy context............. 50

Annex 10 – Examples illustrating the potential socio-economic impact of a option i-PPP............... 50

Annex 11 – Bibliography of the Impact Assessment..................................................................... 50

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

Proposal for a COUNCIL REGULATION

on the Bio-Based Industries Joint Undertaking

1.           Procedural issues and consultation of interested parties

1.1.        Background to the development of the proposal

The Communication outlining the European Bioeconomy[1] Strategy, adopted on 13 February 2012[2] proposes the creation of a Public-Private Partnership (PPP) for bio-based industries ("Bio-based PPP") as part of its Action Plan. The Communication promoting a stronger European industry for growth and economic recovery adopted on 10 October 2012[3] reiterates the importance of setting up a Bio-based PPP in the form of a Joint Technology Initiative (JTI) in the context of the EU's industrial policy. In addition to defining the Bio-based PPP as a priority action point, both Communications are committed to ensuring a coherent policy environment and fostering markets for innovative bio-based products, creating a favourable environment for the rapid deployment of the results arising from such a PPP.

Bio-based industries can make a significant contribution to the smart, sustainable and inclusive growth objectives of the Europe 2020 Strategy, and its flagship initiatives "Innovation Union", "A Resource Efficient Europe" and "An Industrial Policy for the Globalisation Era". This has been recognised in several recent policy initiatives, such as the European Innovation Partnership for Agricultural Productivity and Sustainability[4] and the proposal for rural development under the revision of the Common Agricultural Policy (CAP)[5], the Smart Specialisation Strategy for Member States and Regions[6] and the proposal for the 7th Environmental Action Programme[7]. The Committee of the Regions (CoR) has also underlined the important role of bio-based products and a bio-based society in Europe in its opinion on the European Bioeconomy Strategy end of November 2012[8].

PPPs have been identified as instruments to address societal challenges and strengthen European competitiveness in the Communication on partnering in research and innovation (R&I)[9]. They leverage additional private investments and have to be seen as a measure to enhance growth and create jobs. Criteria for the establishment of such PPPs in the area of R&I have been included under Article 19 of the proposal for Horizon 2020, the Framework Programme for Research and Innovation for the period 2014-2020[10].

An industry group backing the proposal for a Bio-based PPP has been active since end of February 2012 and is grouped in the Biobased Industry Consortium (BIC). The BIC includes representatives from different industrial sectors (including pulp and paper, biofuels, chemicals, sugar and starch, biotechnology) as well as several trade associations (e.g. the association of European Farmers and Farmer associations COPA-COGECA) and regional or national cluster organisations, a more detailed description of the BIC is provided under Annex 2. The group delivered a vision document in May 2012[11]. It also prepared the Strategic Innovation and Research Agenda (SIRA) for the PPP in close interaction with research organisations across Europe that is included in Annex 3.

The proposed Bio-based PPP has been included in the Commission Work Programme for 2013[12].

1.2.        Organisation and timing

This ex-ante Impact Assessment was prepared by DG RTD. It was supported by the Commission Inter-Service Group (ISG) created in June 2012, which included DGs AGRI, BUDG, COMP, CNECT, EMPL, ENER, ENTR, ENV, ESTAT, HR, JRC, MARKT, MOVE, SANCO, SG and the Legal Service. Meetings have been held for all major steps in the development of the Bio-based PPP initiative on 28 June 2012, 20 July 2012, 20 September 2012, 22 November 2012 and 12 December 2012.

During the last ISG meeting of 12 December 2012, a range of questions was discussed relating to the leverage of the proposed Bio-based PPP, the use of structural funds and links to Member States' and Regional activities, links to Bioeconomy Panel and Observatory, PPP funding mechanisms and risk awareness and mitigation of external factors. A good collaboration was established between DGs RTD and REGIO in the context of the Bioeconomy Strategy implementation, during which bio-based industries were extensively discussed, at bilateral meetings on 9 December 2012, 19 July 2012 and on 15 March 2013.

1.3.        Consultation and expertise

A wide range of sources were consulted in preparation of this Impact Assessment:

· A public consultation on the proposed Bio-based PPP took place from 21 September to 14 December 2012[13] and received 638 valid responses. 64.6% of responses came from the private sector, 24.6% from academia, 8.8% from the public sector and 2% from NGOs. Responses were received from 19 out of 27 Member States, with most replies coming from Poland, followed by the Netherlands, Germany, Spain, France, Belgium, Sweden, Finland, Italy, Austria, the UK, Romania, the Czech Republic, Portugal, Denmark, Ireland, Hungary, Greece and Slovakia. Almost all respondents (94.3%) called for EU intervention and 86.9% viewed a PPP as the most appropriate mechanism to implement the R&I programme for bio-based industries under Horizon 2020, and considered that it would have positive socio-economic impacts. Other key messages were the need to strengthen EU innovation, to improve competitiveness and to formulate clear intervention objectives for bio-based industries. The results of the consultation were presented and discussed at a stakeholder event on 9 January 2013 attended by 162 people and are addressed in the present Impact Assessment. The full report of the online public consultation is attached in Annex 4. A printed version is planned for June 2013.

· The proposed Bio-based PPP implements a part of the European Bioeconomy Strategy. Thus, the outcome of the public consultation[14] and a preparatory impact assessment[15] of the Strategy were also taken into account for this Impact Assessment.

· Several events organised in the framework of the Bioeconomy Strategy implementation allowed for regular and broad-based contacts with stakeholders during the preparation of the Impact Assessment[16]. This included the conference "Partnering for the Bioeconomy in European Regions" of 12 October 2012, co-organised by DG RTD and the CoR. During the conference, information on a possible Bio-based PPP was provided and examples of regional activities highlighted possible benefits of bioeconomy partnerships. During this event, DG REGIO specifically informed about the Smart Specialisation Strategy, being part of the rural development policy of the EU. It proposed focusing investments on the bioeconomy where appropriate.

· Several studies conducted in connection with the bioeconomy, bio-based products and biofuels were consulted. These are referenced throughout this document.

· A group of ten external reviewers with expertise relevant to the different parts of the bio-based industries value chain was brought in to assist DG RTD with collecting and analysing the above data and preparing the Impact Assessment.

1.4.        Results of the Impact Assessment Board consultation

Following the opinion of the Impact Assessment Board, the present Impact Assessment was revised as follows: 1) Section 1 "Procedural issues and consultation of interested parties" was complemented with information on the interactions with relevant DGs; 2) Section 2 "Problem definition" was re-structured and strengthened substantially to explain the intervention logic based on Horizon 2020 and the European Bioeconomy Strategy, underlining how a new Bio-based PPP provides the logical extension of and builds on lessons learnt from past research and development (R&D) activities at European, national and regional level; 3) Section 3 "Objectives" was revised to clarify further the objectives of the Bio-based PPP, in particular in the wider policy context; 4) Section 4 "Policy options" was revised to include more detailed information on the policy options; 5) Section 5 "Assessment of impacts" was strengthened with information linking the impacts better to the technological and innovation challenges and problem drivers; 6) Section 6 "Comparing the options and selecting the preferred option" was revised to clarify the weighting of the options in terms of cost effectiveness and efficiency; 7) Section 7 "Evaluation and monitoring" was revised to describe in more detail the criteria and methodology used to monitor the Bio-based PPP implementation.

2.           Problem definition

2.1.        Bio-based industries in Europe

Bio-based industries[17] are at the heart of the European Bioeconomy Strategy and one of the main elements of the Communication for a stronger European industry for growth and economic recovery in line with the objective of the Europe 2020 Strategy.

In the past decade, a growing number of established European processing industries (e.g. chemical, pulp and paper, and sugar and starch industries) have explored moving partially or entirely towards innovative bio-based products and biofuels in response to climbing oil prices, increasing global competition in traditional markets and stricter environmental and energy efficiency targets. This trend has given rise to the nascent sector of bio-based industries that is defined by the use of innovative technologies to convert renewable biological resources into innovative bio-based products and biofuels, which can replace existing goods or open completely new markets.

Despite an increasing number of different market players supporting the development of bio-based industries, the sector has been struggling in setting up its value chains due to the wide range of players to be involved, many of which have not worked together before, and to several market failures. Overcoming these issues is all the more important as bio-based industries are facing several technological and innovation challenges, which are best addressed as part of a value chain approach.

The value chain can be roughly sub-divided into three parts, as indicated in Figure 1:

· Biomass production (upstream) – Raw material has to be sourced in a sustainable manner, for example by collecting residues from the agriculture and forestry sectors or biodegradable wastes;

· Biomass processing/conversion – Two processing steps are usually distinguished, the pre-treatment of the biomass and its conversion into bio-based intermediates and products or biofuels. These two steps can be carried out by the same industry or by different industries. Processing industries include the sugar and starch industry, the chemical and pulp and paper industry, etc.

· Bio-based markets (downstream) – The output from the processing industry can be a final product, e.g. in the case of biofuels, or may have to be further transformed into a final product by another industry or consumer brand, e.g. bio-based fine and specialty chemicals for the pharmaceutical or cosmetic industry.

Figure 1: The value chain of bio-based industries

More detailed information on the market players required to constitute the value chains of bio-based industries is provided in Annex 2.

2.2.        Bio-based industries as a source of green growth

2.2.1.     The environmental potential of bio-based industries

The European economy is heavily dependent on fossil resources as source of carbon for energy and products[18]. Reducing this dependence is paramount in view of the increasing depletion of fossil resources and their impact on climate change. It is critical for Europe to meet its climate change and energy efficiency targets by 2020 and to move towards a competitive low carbon economy in 2050[19]. To achieve this, our industries and our society need to become more resource efficient and expand the use of renewable biological resources as possible substitutes for fossil ones. The need to do "more with less" and to succeed in "living well, within the limits of our planet" is anchored in recent policy initiatives, such as the European Bioeconomy Strategy, the Roadmap for a Resource Efficient Europe and the proposal for the 7th Environmental Action Programme to 2020.

The industrial sector is the third largest user of fossil oil after transport and households. At present, only about 10% of chemical products are derived from renewable resources[20][21]. While it is unlikely that fossil resources can be entirely substituted by renewable ones in the production of chemicals, fuels and other products, increasing the percentage of renewable inputs in these industries can have a tremendous impact on reducing fossil resource dependence. Replacing petro-chemical refineries by biorefineries can significantly contribute to mitigating climate change. Estimates show that the conversion of bio-based wastes into bio-based materials alone could reduce emissions by up to 633 million tonnes of CO2[22]. The EU's total greenhouse gas (GHG) emissions stood at 4,614.5 million tonnes of CO2-equivalents in 2009[23]. As easily extractable high-quality fossil oil is increasingly scarce, more cost-intensive alternatives are becoming competitive. The calculation of the "energy return on investment" (EROI) for different fuels shows, that certain conventional biofuels (e.g. bioethanol from sugarcane and biodiesel from soy) can already compete with some fossil fuels (e.g. tar sands, heavy oil from California) on the basis of their EROI today due to advances in technology and innovation in the last twenty years[24].

By focusing on advanced biorefineries that rely on non-edible biomass as a feedstock, European bio-based industries respond to the concerns about the sustainable management of Europe's limited natural resources, indirect land use change (ILUC) and food security, also see Box 1. On-going work to further improve the sustainability of agricultural and forestry practices, and to develop standards and sustainability criteria for bio-based products will contribute to meeting the EU’s policy objectives on biodiversity and ecosystems[25].

Bio-based processes can also make production processes more resource efficient and environmentally friendly. It is considered that the use of industrial biotechnology in various production processes already today avoids the creation of 33 million tonnes of CO2 per year (excluding bioethanol). The full climate mitigation potential of industrial biotechnology is estimated to range between 1 billion and 2.5 billion tonnes CO2 equivalent per year by 2030, which is more than Germany’s total reported emissions in 1990[26].

Several bio-based consumer products can also make a direct contribution to mitigating climate change, such as detergents with new cold water enzymes, which can reduce washing temperatures from 40°C to 30°C. By washing laundry at 30°C rather than 40°C or 60°C, 32 million tonnes of CO2 could be saved in the US and Europe alone – this corresponds to the emissions of 8 million cars[27].

Box 1: "Conventional" versus "Advanced" biorefineries – How concerns about food security and indirect land use change (ILUC) are being addressed in Europe

In order to reduce the dependence of their economies on fossil carbon, the US, Brazil, the EU and other parts of the world have introduced ambitious biofuel targets in the last decade. The increasing demand for renewable biological resources (biomass) as carbon sources for industrial and energy purposes has given rise to concerns about the impact these uses may have on food security, scarce natural resources and the environment in Europe and third countries, in particular with regard to ILUC.

In the light of these concerns, the EU has reviewed its strategy since 2010 by applying approaches based on life-cycle analyses that taken into account issues, such as food security, environmental protection and sustainability, when developing bio-based industries. In contrast to many of its global competitors, who continue to draw heavily on food crops to kick-start their "conventional" biorefineries, the EU is addressing these concerns by gradually shifting the feedstock base of these industries to non-edible biomass between now and 2020 by investing in "advanced" biorefineries. This is also clearly illustrated by two recent EU policy initiatives – the European Bioeconomy Strategy and the proposal[28] for a revision of the Renewable Energy[29] and Fuel Quality Directives[30].

"Conventional"/"first-generation" biorefineries

The conversion of edible parts of food crops into biofuels or bio-based products is technologically fairly easy. Sugars and starch from these crops can be transformed into bioethanol through fermentation processes similar to those used for the production of beer or wine. Vegetable oils can be converted into biodiesel through processes similar to those used by the petro-chemical industry for the production of plastics. Since the technology used in these processes is already well-established and accessible, the resulting products and processes are being referred to as "conventional" or "first-generation".

"Advanced"/"second-generation" biorefineries

Transforming non-edible parts of plants (e.g. wood, agricultural and forestry residues) and biodegradable wastes is more challenging. This biomass, also referred to as ligno-cellulosic material, is usually heterogeneous and contains a mix of different types of complex biomolecules (i.e. cellulose, hemi-cellulose and lignin). The technology required for the transformation of ligno-cellulosic material is more advanced and still under development, the resulting products and processes are therefore called "advanced" or "second-generation".

In the long-term, the aim will be to replace carbon from renewable biological resources, as used in first- and second generation biorefineries, by carbon from atmospheric CO2 using microalgae. The development of such advanced "third-generation" technology is however still at a very early stage.

2.2.2.     The socio-economic potential of bio-based industries

Bio-based industries are a cornerstone of the bioeconomy in generating growth and jobs. Although bio-based products and biofuels currently only represent about 3% of the € 2 trillion in annual turnover and 1% of the 22 million jobs generated by the European bioeconomy today, bio-based industries are expected to grow more rapidly and substantially than more traditional bioeconomy sectors[31][32]. The potential of bio-based industries for generating growth and jobs has also been highlighted in the updated Industrial Policy, the EIP for Agricultural Productivity and Sustainability and the proposal for rural development under the revision of the CAP.

Estimates from different sources consider that:

· The global revenue potential of the entire biomass value chain for biorefineries could exceed € 200 billion by 2020[33];

· The share of bio-based processes in all chemical production is likely to increase from less than 2% in 2005 to 25% in 2025[34], and could reach 30% in Europe by 2030 (>50% for high added value chemicals and polymers, less than 10% of bulk commodity chemicals)[35];

· The volume growth of EU bio-based chemical products (including bio-plastics, bio-lubricants, bio-solvents, bio-surfactants and chemical feedstock) will be at 5.3% per year up to 2020, resulting in a market worth € 40 billion and 90,000 jobs within the bio-chemical industry alone[36];

· Up to 75 billion litres of bioethanol could be sustainably produced at a competitive cost by 2020, which would represent about € 15 billion in additional revenue for the agricultural sector[37];

· The development for 2nd generation bioethanol in the EU by 2020 could lead to almost 950 biorefineries generating more than € 32 billion in annual revenue and 933 000 jobs (total man years from 2010 to 2020)[38].

2.3.        The national and regional potential of bio-based industries

Given the diversity of Member States and Regions in terms of geography, natural and technological resources, and infrastructure, developing bio-based industries and their value chains opens interesting opportunities for transnational and transregional cooperation within Europe, especially in bringing together partners from primary production and processing industries. Biorefineries need to be close to their feedstock sources to be economically viable.

Figure 2: Indicative spatial biomass potential for energy crops in Europe[39]

The use of biorefinery processes is typically most advanced in Member States and Regions that already have a strong chemical, biofuels, biotechnological or pulp and paper industry, where they either complement or build on existing activities. Most of these industries are situated in Austria, Belgium, France, Germany, Italy, the Netherlands, Spain the UK and Scandinavia. While several of these Member States dispose of sufficient feedstock in the form of agricultural and forestry residues or waste for demonstration activities and small- to medium-scale flagship biorefinery plants, large-scale flagship biorefinery plants and deployment will need to rely strongly on cooperation with new Member States. As indicated in Figure 2, these have biomass resources that can still be better exploited by further improving agricultural practices. When considering the setting up of biorefineries, the regional biomass potential and its existing uses will however need to be carefully assessed (e.g. through life-cycle assessments (LCAs)), as well as potential impacts of these activities on biodiversity and ecosystem.

Bio-based industries in Europe will have to invest in transnational and transregional cooperation in order to reach the necessary economy of scale to be successful. Although early investments into the development of bio-based industries are likely to benefit regions that already have some bio-based industries or similar infrastructures in place today, investments will increasingly shift to regions with substantial biomass resources, as the technology reaches sufficient maturity for full deployment as of 2020, see Figure 3 and Box 2. Bio-based industries thus can offer a win-win situation for all interested Member States and Regions.

Figure 3: Potential socio-economic impact of 2nd generation ethanol on EU in 2020[40]

The potential of the bio-based industries, as part of the bioeconomy, to generate economic growth and jobs and assist with the compliance with environmental policy objectives at a local and regional level has also been recognised by the CoR. Regional and local authorities have been encouraged to include the bioeconomy in their Smart Specialisation Strategies[41] from 2014 to 2020 and rural development activities in order to exploit this potential and provide support to the development of these industries through Structural Funds, see Section 2.7 for more details.

Box 2: The current use of biomass for industrial and energy purposes

It is estimated that the total amount of biomass used in the EU for energy and industrial material uses today lies at about 470 million tonnes, including imported biomass[42]. The majority of this biomass (400 million tonnes) comes from forestry, of which 230 million tonnes are used for wood working and the pulp and paper industries, and 170 million tonnes for energy (heat and power)[43]. The amount of biomass from agriculture transformed into industrial materials and energy is estimated at 70 million tonnes. The majority of agricultural biomass (> 90%) goes to food and feed.

The availability of additional biomass for uses beyond the current levels of conversion into bio-based products was confirmed by studies from the European Environmental Agency, the International Energy Agency and several research projects funded by the EU. In order to ascertain the long-term sustainability of EU biomass supply to bio-based industries, due account needs however to be given to potential environmental considerations, such as the level of agricultural residues that can be collected without negatively affecting soil fertility and/or biodiversity, or potential effects on the water retention of soils concerned. These and other environmental factors need to be assessed as part of the decision-making process. Annex 5 to this Impact Assessment provides a more detailed insight into this issue.

2.4.        International competition

The US, Brazil and China are aggressively advancing the development of commercial-scale biorefineries through policy targets and incentives, with a strong focus on conventional biofuel. Russia, India, Thailand and Malaysia are following suit. Generous government support schemes for large scale demonstrators and first-of-a-kind industrial plants have motivated several European companies to carry out the up-scaling of their technology to commercial scale in these countries[44]. Some of these countries are also increasingly investing in advanced biofuels: about $ 1.4 billion of select public funding was allocated to the development of advanced biofuels in the US in 2011[45].

Compared to the US, which promotes the commercialisation of bio-based products through its BioPreferred Program[46], the European market also suffers from a relative absence of incentives at the product level. However, the product portfolio of a biorefinery needs to be adjusted to the local economic situation, e.g. in terms of feedstock, local and global demand.

Many European companies move abroad to be closer to cheaper feedstock, e.g. sugarcane in Brazil, microalgae in Australia, seaweed in Chile and South Korea, sugarcane and jatropha in India, and a mix of biomass in South East Asia[47]. The increasing exploitation of shale gas for energy and industrial purposes, in particular in the US and Canada, may also have an impact on the price and availability of biomass in these countries

The EU cannot compete with these countries in terms of biomass volume prices, and is likely to have to rely on imports for bulk applications. Its technology base do however allow its bio-based industries to compete if they concentrate on producing high added value bio-based products and biofuels from Europe's limited resources. It is therefore important for Europe to establish reliable biomass supply chains and to optimise the use of this valuable resource to remain competitive.

The EU's focus on advanced biorefineries gives other countries the first-mover advantage and critical mass in conventional biorefineries, in particular for biofuel production. This also provides them with a stepping stone for the development of bio-based products and advanced biorefineries. In order to remain competitive, the EU will need to leapfrog its competitors in terms of technology development, and establish reliable supply chains for biomass.

2.5.        Technological and innovation challenges of bio-based industries in Europe

In order to fulfil the potential of bio-based industries and ensure their competitiveness in global markets, a number of hurdles need to be overcome. These include four technological and innovation challenges that arise from the strong emphasis of Europe on advanced biorefineries. Since these complex and inter-connected challenges need to be addressed in a coherent and integrated way, adopting a value chain approach is likely to be the most cost-effective and efficient, given the dispersion of market players.

2.5.1.     Accessing sufficient sustainable feedstock

The potential for large contributions in terms of socio-economic benefit and GHG savings from bio-based industries requires that production infrastructure will be developed in the EU and that a substantial share of the biomass can be locally obtained. It is therefore essential that biomass is sourced in Europe in a sustainable way, e.g. by using LCA approaches that take into account issues, such as the loss of biodiversity, the damage to ecosystems, ILUC or negative effects on food security. Attention will also have to be given to other industries that may rely on the use of biomass.

Actions to be taken include assessing the sustainability of integrating new solutions for residue removal in current farming or industrial practices (e.g. preserving soil fertility), developing new dedicated industrial crops that are optimised in terms of yield and quality, as well as sustainable farming practices that take into account fertiliser and water use. At a smaller scale, sustainable solutions to efficiently grow non-edible crops on polluted or marginal land will be explored with a view to make the best use of land that does not contribute to food/feed production.

Supply chains for residues from agriculture and forestry, waste streams and dedicated industrial crops will need to be put in place to overcome the lack of reliable and cost-competitive feedstock. This will require the development of logistics and storage solutions to ensure quality and availability of the feedstock, as well as the reduction of losses along the supply chain.

Addressing this challenge will require the establishment of new collaborations between market players from primary production and processing industries, ideally by building value chains for the main feedstocks in Europe.

2.5.2.     Developing efficient conversion processes for advanced biorefineries

Processes for the conversion of feedstock derived from edible parts of food crops are already well-established for the use in conventional biorefineries, as their feedstock is usually homogenous and composed of single type biomolecules (e.g. sugar, starch or vegetable oils) that are easy to transform. For the feedstock targeted by advanced biorefineries, efficient conversion processes are lacking, as they are usually quite heterogeneous in terms of quality and composition, with a mix of different types of complex biomolecules (mainly so-called ligno-cellulosic material[48]).

As a consequence, new processes need to be developed to separate, pre-treat and convert these feedstocks into bio-based products and biofuels. A wide range of radically different technological options (e.g. enzyme-based versus thermo-chemical processes) will need to be taken forward simultaneously in a strong and multi-facetted research effort to enhance process efficiency and optimise yields. Only when economic competitiveness is reached, will new processes be commercially deployed and start achieving further efficiency gains through economies of scale.

A major contribution to breaking barriers to economic competitiveness of bio-based processes can come from technologies enabling smart use of biomass. This implies that biomass is being used to make multiple products in a process cascade that combines high added value applications (e.g. high value ingredients) with production of lower added value products (e.g. biofuels), but also opportunities for re-using and recycling products. Smart use solutions require reinforcing research cooperation along the value chain and across sectors. With sustainability as a guiding principle, they can substantially optimise the use of biomass as a resource and maximise the derived value.

Addressing this challenge will require better interaction between market players from the processing industries with other players along the value chains, in particular with biomass producers to fine-tune the feedstocks and end-users to identify market demand for different bio-based goods.

2.5.3.     Demonstrating and deploying advanced biorefineries

It took more than 100 years to develop the current (petro-)chemical industry, with its system of family trees of platform chemicals. In order to compete with these industries, innovation efforts of bio-based industries need to be bundled and biorefinery development needs to be accelerated by promoting the rapid up-scaling from lab-scale research to pilot and demonstration scale. To achieve this, fragmentation needs to be overcome and cross-sectorial industrial synergies need to be identified and exploited.

Technological breakthroughs are required to upgrade existing bio-based industries (e.g. pulp and paper mills, biofuels, starch, chemical, etc.) into integrated biorefineries (i.e. multi-feedstock, multi-product) and to develop new and scalable integrated biorefinery models (e.g. ligno-cellulosic material, green grass). Significant investments in up-scaling technology and infrastructure are needed to assess the relative merits of radically different technology options and to identify winning option(s).

Addressing this challenge will require better interaction between market players from the processing industries, as well as end-users.

2.5.4.     Supporting demand-side actions for the uptake of bio-based products

R&I efforts will play an important role in removing obstacles to and promoting the uptake of bio-based products in consumer markets and green procurement. The successful uptake of new bio-based products and biofuels depends on customer acceptance. Sustainability criteria, LCA approaches, standards, labelling and certification systems have to be developed to allow product prices to appropriately reflect externalities and assist consumers in making informed product choices, e.g. based on data on the benefits of these products over the full product life-cycle from cradle to grave.

Several demand-side actions are supported by recent policy initiatives, such as the European Bioeconomy Strategy, the updated Industrial Policy that builds on the Lead Market Initiative for Bio-based Products[49], the EIP for Agricultural Productivity and Sustainability and the proposal for rural development under the revision of the CAP, and the Smart Specialisation Strategy. R&I efforts involving actors along the whole chain (including end-users, consumer organisations, NGOs, policy-makers, etc) will play an important role in implementing these policies and designing effective new policies.

Addressing this challenge will interaction between market players along the entire value chain, i.e. biomass producers, processing industries and end-users, as the success of bio-based industries will strongly depend on the environmental performance of their outputs.

2.6.        Underlying problem drivers

A number of market failures are causing lack of investment in R&I activities necessary to overcome the four technological and innovation challenges and the creation of new value chains for bio-based industries.

2.6.1.     High risk and cost of demonstration and deployment

"The development of the bio-based economy is at an early and high risk stage, and no single industry or company is capable of managing this phase of its development independently"[50].

By gradually shifting the emphasis from conventional to advanced biorefineries due to sustainability and food security considerations, the EU makes it difficult for its companies to build critical mass and "first mover advantage" based on massive deployment of conventional technologies. They face an additional challenge in breaking the technological and economic barriers related to the development of advanced biorefineries compared to their international competitors.

The need to move directly to the development of advanced biorefineries also further exacerbates the lack of significant levels of public support for demonstration and first-of-a-kind investments in Europe. Companies considering expanding their activities in bio-based industries in Europe therefore face a very high degree of risk when investing in these technologies, especially SMEs.

Demonstration and flagship plants for biorefineries come at an elevated cost, in particular in terms of infrastructure (between € 5-100 million and € 50-1000 million respectively[51]). Essential parameters, such as market development, evolution of the price of fossil resources, policy (e.g. public support levels for biofuels and biomaterials), can have a significant impact on the return on investment and present a substantial degree of uncertainty. As a consequence, it is difficult to attract large private investors before proof of concept at demonstration scale.

2.6.2.     Knowledge spill-overs

Many successful biorefinery technologies will eventually be deployed at a large scale and in multiple locations. While certain technologies can be protected and commercially exploited on a broad scale (e.g. patenting of novel enzymes), many innovations (e.g. organisation of an effective biomass supply chain) are inherently difficult to protect. The benefit of the results will thus flow to society at large ("spill-overs").

With many key players in the bio-based industries being relatively small, few companies can expect to fully "internalise" the benefits of their research, i.e. convert the results in income streams to the exclusive benefit of their company. As a consequence, the private sector is likely to allocate fewer resources to this type of R&I activities, resulting in lower than optimal research spending levels.

2.6.3.     Nascent and fragmented industrial sector

Mobilising the necessary R&I resources is difficult for a nascent and fragmented industrial sector, such as bio-based industries, because it is difficult for it to get the necessary visibility. Although many industrial sectors have a stake in activities contributing to their development, there are currently hardly any major players that have a large and fully dedicated R&I budget for the development of bio-based processes and products.

A comparison of R&I budgets of leading companies in industrial biotechnology, pharmaceutical biotechnology and plant biotechnology shows that the company with the highest research and development (R&D) budget in industrial biotechnology spends about five times less than the largest player in agricultural biotechnology and almost two orders of magnitude less than the largest pharma player[52]. R&D budgets for industrial biotechnology are also significantly smaller than those of large international players in the (petro-)chemical industry[53].

Furthermore, the sourcing of sufficient quality biomass on the supply side and the need to support demand-side activities through the development of standards, labels and sustainability criteria, requires collaboration beyond the processing industries. Key players along the value chain are often located in different Member States.

2.6.4.     Transaction cost

The development of successful value chains for bio-based industries requires the involvement of different players, ranging from primary producers, biorefineries to industrial users and consumer brands. However, working together in complex multi-party R&I collaboration models implies many research interfaces and high transactions costs for the companies involved. The issue is aggravated by the strong need for non-traditional R&I collaborations, i.e. bringing together parties that have not worked together closely in the past or involving parties with no tradition of conducting in-house R&I, e.g. when determining sustainability criteria for production processes and products.

A partial and frequent response to this issue is the use of joint-venture models, even by larger companies. A growing number of European bio-based companies are involved in joint-venture type collaborations. However, there seems to be a trend to establish these joint-ventures with non-EU companies and to transfer the construction of new production plants outside of Europe mainly due to easier access to finance (subsidies and loans) for demonstration and first-of-a-kind production facilities.

2.6.5.     Policy framework

Bio-based industries and their value chains are subject to a wide range of established and emerging policy areas at EU, national and regional level, leading to a complex and sometimes fragmented policy environment. Although most of these policies are favourable to the development of these new industries, the targets and incentives they formulate are often not as strong as those of comparable policies in other countries (e.g. the US has introduced clear target volume for bioethanol by 2022, while the EU speaks of a 10% target for renewable energies in transport), also see Section 2.4. Furthermore, there has been an increasing sense of uncertainty due to a strong public opinion on the food versus fuel debate and ILUC.

2.6.1.     Uncertainty around resource availability

Lack of reliable data on the availability of and demand for sustainable biomass in Europe for industrial and energy purposes is hampering solid forecasting of a realistic scope and scale for bio-based industries. This makes it difficult to fully assess the return on investment in terms of environmental, economic and social impact.

2.7.        Need for EU intervention

Horizon 2020 foresees activities supporting the development of bio-based industries under two pillars "Societal Challenges" and "Leadership in Enabling and Industrial Technologies", see Section 5 for more details. It thus ensures the continuance of the activities carried out under the Seventh Framework Programme for Research and Technological Development (FP7) which started in 2007 and is ending in 2013. Horizon 2020 provides the right framework to facilitate the kind of cross-border, cross-sector, interdisciplinary research and innovation effort required to address the technological and innovation challenges and mitigate the market failures bio-based industries are facing.

In particular, Horizon 2020 will provide increased funding for innovation activities in order to achieve higher Technology Readiness Levels (TRLs) than FP7, see Annex 6. However, this will not be sufficient to overcome important weaknesses, such as lack of access to state-of-the-art demonstration plants and of collaboration between stakeholders along value and supply chains. The programme does not offer the tools to create the critical mass, see Box 3, and to address the risk involved in moving to higher TRLs. These require costly demonstration, flagship and first-of-its-kind biorefinery plants. The implementation of innovation activities at high TRL levels (4 to 8) requires strong involvement levels of industry which are typically not achievable under Collaborative Research as experience under FP7 has shown, even with increased investment in innovation activities under Horizon 2020. This is why the European Bioeconomy Strategy and the updated Industry Policy have been calling for a PPP on Bio-based Industries.

A large majority of participants in the online public consultation on the Bio-based PPP proposal (94.3%) were favourable to an EU level intervention and confirmed that there are four major areas requiring immediate action in terms of R&I: a) Achieving the required level of investment into R&I activities; b) Ensuring EU wide cooperation between all stakeholders along value chains; c) Providing improved policy coherence; and d) Promoting non-traditional partnerships (e.g. transnational, cross-sectorial). It also found that a value chain approach, e.g. in a PPP, would allow to address these challenges in the most cost-effective and efficient way given the current dispersion of the market players required to tackle them.

Box 3: Critical mass for the creation of bio-based value chains Bio-based industries are a very promising nascent sector, which will however have to overcome several technological and innovation challenges and market failures to be successful. Addressing these in the most efficient and effective manner requires bringing together all the key market players, many of which have not worked together in the past, which has the added benefit of creating ownership and ensuring better harmonisation and standardisation in the setting up of the sector. Critical mass in this context is defined by a combination of framework conditions that allow for: · Bringing together all industry players along the value chain; · Formulating a long-term, industry-driven, consensus-based strategic innovation and research agenda (SIRA); · Raising private and public resources commensurate with the ambition or the SIRA (leverage effect); · Implementing this SIRA through cross-border, cross-sector, interdisciplinary research; and · Going beyond R&D into standard setting. Consultation of stakeholders suggests the critical mass for achieving this implies the: · Securing of sufficient and reliable feedstock supply that is sustainably sourced, e.g. by involving: · At least 50% of the biggest forest-based industry companies; · A significant part of the agro-food industry (since 99% of these are SMEs, a 50:50 balance between big industry and SMEs should be targeted); · Leveraging private investment into research activities from bio-based processing industries to a similar level than that from the pharmaceutical industry. · Ensuring access to and investment into infrastructure for up-scaling. · Representation of all Member States as appropriate based on their bioeconomy potential. · Developing five value chains based on the key feedstocks available in Europe. The BIC already includes many of the key players in this area, see Annex 2, and is reaching out to those who are not yet involved.

2.7.1.     European added value

Several Member States and associated countries have developed bioeconomy strategies and initiatives that support the development of bio-based industries, see Annex 7. However, while some Member States have mature national bioeconomy strategies (e.g. Germany, the Netherlands, Sweden and Denmark), others are still developing their strategies (e.g. France and Italy) or only have regional initiatives (e.g. Belgium). The strategies and initiatives typically reflect the geography, natural and technological resources, and infrastructure of a Member State or Region.

Many bioeconomy initiatives build on close cooperation between the public and the private sector and support the development of bio-based industries at a national or regional level. In particular bioeconomy clusters are often set up in the form of PPPs, such as the clusters IAR in France, Wagralim in Belgium, CLIB 2021 in Germany and BE-BASIC in the Netherlands. Several of these initiatives have also recognised the importance of cross-border collaboration, as illustrated by the partnering between IAR and Wagralim, or CLIB 2021 and BE-BASIC.

Although these collaborations between clusters look promising at first sight, they are often affected by differences in funding levels and financing rules in and a notion of competition between the Member States and Regions. It is therefore challenging for such transnational collaboration to achieve the necessary economy of scales to establish competitive bio-based industries value chains. Many national/regional clusters are more likely to be involved in collaborations with partners in third countries with more favourable framework conditions and incentives, such as Brazil, Malaysia, US and Canada. An example of a bioeconomy cluster deploying its technology abroad is provided in Annex 8.

The success of regional bioeconomy clusters in mobilising relevant players at regional level shows that PPPs are a good instrument to promote the development of bio-based industries value chains. The hurdles they encounter when trying to deploy their potential beyond the regional level in Europe despite an increasingly favourable policy environment confirms the need for an initiative at EU level that provides them with the necessary strategic framework and critical mass to overcome these limitations.

2.7.2.     Lessons learnt – Collaborative research under FP7

The EU has funded a wide range of projects contributing to the advancement of bio-based industries under its Framework Programmes for Research and Technological Development (FPs) in the past decades, notably under the FP7 Specific Programme on "Cooperation". Theme 2 "Food, Agriculture and Fisheries, Biotechnology" is currently financing 100 "Collaborative Research Projects" (CPs) and "Cooperation and Support Action" (CSAs) in the Activity "Biotechnologies" with an EU contribution of about € 400 million. These have improved the knowledge- and technology base on a wide range of areas, namely:

· Novel sources of biomass and bioproducts and aquaculture – Projects under this area focus on improving our understanding of the genetics of plants and other organisms in support of breeding and the development of cell factories, as well as deliver feedstocks and precursors to bio-based industries, fostering the optimisation of biomass for industrial purposes;

· Marine and fresh-water biotechnology (blue biotechnology) – Projects under this area aim to exploit the potential of marine and fresh-water resources (e.g. new enzymes) for use in industrial applications;

· Industrial biotechnology: novel high added-value bio-products and bio-processes – Projects under this area aim to develop and apply industrial biotechnology for the production of high added value products, and explore novel bio-based fine and specialty chemicals (e.g. food additives, pharmaceuticals);

· Biorefinery – Projects under this area use industrial biotechnology to convert a range of different biomass sources into bulk bio-based products (e.g. biochemical and biopolymers;

· Environmental biotechnology – Projects under this area develop biotechnological solutions for preventing and cleaning pollution, and bioremediation of polluted land (e.g. near mining sites) and water (e.g. waste water, oil spills);

· Emerging trends in biotechnology – Projects under this area aim to advance biotechnology as a tool or Key Enabling Technology by developing systems biology, synthetic biology, bioinformatics etc.

CPs typically have TRLs from 2 to 5. As a consequence, only about 8% of the EU contribution under this Activity went to demonstration activities. High SME participation rates were achieved in certain targeted calls (up to 30% of the EU contribution in call FP7-KBBE-2012-6), but large industry participation was rather limited. While total industry participation (as share of EU contribution) peaked at 35 % in the 2012 call, it was on average between 15 and 20% during FP7 so far.

Given the multidisciplinary nature of biorefineries, DG RTD in 2009 organised a Joint Call on biorefineries involving four Themes of the Cooperation Programme (Theme 2, Theme 4 "Nanosciences, Nanotechnologies, Materials and New Production Technologies, Theme 5 "Energy", and Theme 6 "Environment"). Three flagship CPs (BIOCORE EUROBIOREF and SUPRABIO) and one CSA (Star-COLIBRI) were selected with a total EU contribution of about € 50 million. The Call revealed the existence of a large research and industrial community committed to taking biorefineries forward.

The three CPs are on-going and developing multi-product biorefineries. The substantial budget dedicated to demonstration activities (TRLs 4-8) in all three shows on one hand, that there are a number of biorefinery technologies and concepts ready to be scaled up from the lab, on the other hand, that more support is needed for up-scaling activities. This was confirmed by the results of Star-COLIBRI, which aimed to overcome fragmentation and promote cross-fertilisation in the area of biorefinery research. The project ended in 2011. One of the main conclusions from its reports is that Europe could be a world-leading, competitive bio-based economy by 2030, provided that European bio-based industries utilise biomass in an efficient and flexible manner and focus strongly on value added products.

The results from Star-COLIBRI and the experience of the past years shows that Europe has a strong research base in the area of bio-based industries, but also that there is a demand for projects with higher TRLs at EU level. While FP7 projects in the area of biotechnology are contributing to advancing the knowledge and technology base for bio-based industries in Europe in many areas, their impact is lessened by the fact that their findings often only cover small and very different parts of the technological and innovation challenges the sector is facing (e.g. developing standards for certain bio-based products, discovering new enzymes for a specific type of feedstock), see Section 2.5. They are thus difficult to connect and integrate with each other, especially given the dispersion of the market players, and may thus not always provide the most cost-effective and efficient solution.

More support is needed to take the results from this research to higher TRLs in view of bridging the "valley of death" for innovations. This is why a working group has been put in place to identify how TRLs can be integrated in Horizon 2020 and how activities "close to the market" should be defined.

Although SME participation has improved under FP7, it is considered that this was not sufficient to strengthen innovation content and that more attention should be given to quality of participation and constructive engagement[54]. The limited participation of large industry is also seen as a hurdle to be tackled given their critical role in bringing new technologies and products closer to the market.

2.7.3.     Lessons learnt – PPPs on research and innovation under FP7

There is no precedent for a PPP on Bio-based Industries under FP7. As a new initiative, it will have to base itself on the lessons learnt from existing PPPs under FP7 (contractual PPPs and Joint Technology Initiatives (JTIs)).

PPPs are an innovative way of implementing EU R&I policy. An assessment of PPPs under FP7[55] showed that they can play a significant role in mitigating market failures that are hindering R&I activities necessary for the resolution of technological challenges. In particular the stable and long-term framework of JTIs through the development of strategic R&I agendas succeeds in bringing together key stakeholders from relevant industrial sectors (almost 30% of call participants in all JTIs were SMEs) and to leverage significant private investment (€ 1 EU contribution was matched by about € 1.5 in private investment for all JTIs taken together).

PPPs under Horizon 2020 will differ from those created under FP7 by the possible extension of their range of activities to demonstration and deployment. They will also address several recommendations formulated for future PPPs:

· The PPP needs to be open to new participants during its implementation;

· The commitment from industry needs to be stronger;

· A stronger focus is needed on generating measurable output and innovation;

· The structures and instruments used for implementation need to become simpler and less bureaucratic[56], e.g.:

· Reduced administrative costs for participants;

· Faster processes for the selection proposals and the management of grants;

· Decreased financial error rate.

A more detailed description of the two PPP types is provided under Section 4.

2.7.4.     Conclusions

Certain funding mechanisms applied at EU and regional level – in particular large and integrated biorefinery projects and regional bioeconomy clusters – are a first step in the right direction in that they apply a value chain approach to R&I, support demonstration and deployment activities, and encourage transnational collaboration. However, the existing initiatives have not succeeded in reaching the critical mass required to overcome fragmentation and create integrated bio-based industry value chains in Europe. The impact of these funding mechanisms could have been even better if they had been part of an integrated long-term strategic vision for bio-based industries in Europe that gives more support to demonstration and deployment activities.

A Bio-based PPP Industries will give a strong political signal at EU level. It provides a stable long-term framework that allows for strategic programming with industry. This will be critical in leveraging and securing long-term investments from the private sector, in particular for demonstration and deployment activities. The prospect of a possible new Bio-based PPP brought together a group of companies and several regional initiatives and clusters in the Biobased Industries Consortium (BIC), also see Annex 2. This demonstrates that many actors "in the field" endorse the need for decisive EU action beyond the foreseen Collaborative Research under Horizon 2020. The relevance and timeliness of such an initiative is also supported by the strong response to the Public Consultation on a Bio-based PPP, which received 673 replies, and the fact that 94.5% (strongly) agreed with the need for EU intervention.

In addition to leveraging private investments from industry, a Bio-based PPP will also provide a unique framework to facilitate synergies between different financing mechanisms and instruments at EU level to support converging policy objectives. These synergies will increase the scope and scale of policy-driven actions, in particular in combining R&I with demonstration and deployment activities. Funding mechanisms and instruments include Horizon 2020, Structural Funds[57], European Investment Bank (EIB)[58]. Contributions from Member States could also be associated to these activities.

In relation to possible contingencies with EU competition on State Aids[59] it has to be considered that State Aid rules for risk finance aim at facilitating public support to fill the "equity gap" for new market entrant. State Aid modernisation will extend those rules beyond pure equity instruments, in order to avoid the "valley of death" effect between the start-up phase and the first revenue streams.

State Aid policy also allows for R&D&I support. Since 2007 more than 200 schemes for R&D&I have been approved upon notification and an even larger number authorised on the basis of the block-exemption regulation. State Aid modernisation aims to direct public spending towards areas of growth. Today Member States allocate 46% of public aid towards competitiveness-enhancing objectives (such as innovation, research and development, environment, energy saving, risk capital, training). A further 26% corresponds to aid aiming at reducing disparities between regions.

3.           Objectives

3.1.        Description of objectives

The PPP on Bio-based Industries is supported by research and innovation activities under two pillars "Societal Challenges" and "Leadership in Enabling and Industrial Technologies", see Section 5 for more detailed information. The general and specific objectives formulated for the PPP below are in line with the objectives of the respective parts of Horizon 2020.

3.1.1.     General objective

Bio-based industries can significantly contribute to achieving smart, sustainable and inclusive growth in Europe by 2020 and making the transition towards a low-carbon economy by 2050. Biorefineries can reduce the dependence of the European economy on fossil resources and contribute to the EU's climate change and energy targets, as they rely on biomass and more resource efficient and sustainable processes for the production of bio-based products and biofuels.

The strong growth potential of bio-based industries can lead to significant economic growth and job creation by 2020 and beyond, if Europe succeeds in maintaining and enhancing its competitiveness in this area. The development of biorefineries and their supply chains offer new sources of revenue for rural areas.

Based on the above and Section 2, the general objective of the proposed PPP is to contribute to a more resource efficient and sustainable low-carbon economy and to increasing economic growth and employment, in particular in rural areas, by developing sustainable and competitive bio-based industries in Europe, based on advanced biorefineries that source their biomass sustainably.

3.1.2.     Specific objectives

In order to achieve the overall objective, the proposed PPP will assist bio-based industries in addressing the technological and innovation challenges and overcoming the market failures that are currently hindering them, as described in Section 2. The specific objectives are to:

· Demonstrate technologies that enable new chemical building blocks, new materials, and new consumer products from European biomass and which replace the need for fossil based inputs;

· Develop business models that integrate economic actors along the whole value chain from supply of biomass to biorefinery plants to consumers of bio-based materials, chemicals and fuels, including through creating new cross-sector interconnections and supporting cross-industry clusters; and

· Set up flagship biorefinery plants that deploy the technologies and business models for bio-based materials, chemicals and fuels and demonstrate cost and performance improvements to levels that are competitive with fossil based alternatives.

The specific objectives, see Figure 4 and Annex 9 for more detailed information, have been elaborated based on the technological and innovation challenges and in consultation with the BIC (>40 companies, several trade associations and ETPs), Research and Technology Organisations (RTOs), universities and SMEs. Since some aspects of the proposed activities will also be supported under other parts of Horizon 2020 and PPPs (e.g. SPIRE), docking points for cross-cutting activities will be defined to avoid duplication.

Figure 4: More detailed discussion of the specific objectives and their relationship to general and operational objectives

When implementing the specific objectives, three types of R&I activities can be distinguished. They fall in the TRL range of 2 to 8:

· Type 1 R&I assists in improving the sourcing of sustainable biomass (TRLs 2-4) and develops technologies (TRLs 2-4) that make non-edible biomass accessible for conversion into chemical building blocks, chemicals, materials and fuels, which either substitute existing fossil-based equivalents or are entirely new (e.g. new characteristics and functionalities). These technologies are then up-scaled (TRLs 5-8). Some of the outputs from this R&I could go directly to market after being brought to commercial scale (e.g. biofuels), others may undergo further manufacturing step or require Type 2 R&I.

· Type 2 R&I develops technologies to make new bio-based chemicals, materials and products from the outputs of Type 1 R&I, especially from those that are entirely new (TRLs 2-4). These are then tested for use in consumer products (TRLs 5-8). Again, these either substitute existing fossil-based equivalents or are entirely new. While some outputs may go through a further manufacturing step to become a final product, others may go directly to the market after being brought to commercial scale. Type 1 and 2 R&I can take place in the same company.

· Type 3 R&I supports the development and testing of sustainability criteria, life cycle assessment tools, standards, certificates, labels etc., which are crucial to support the uptake of bio-based products and biofuels in consumer markets and green procurement. Activities need to span the whole value chain, as the overall sustainability of a bio-based product or biofuel depends on the sustainability of the different production steps.

An overview linking the different types of R&I activities to be carried out under a Bio-based PPP to its objectives is provided under Figure 5. Another correlation is provided in Table 3 under Section 5.

Note: The PPP on Bio-based industries only covers the coloured boxes. TIC = Technological & Innovation Challenges, SO = Specific objective

Figure 5: Linkage between specific objectives and technological and innovation challenges

3.2.        Consistency of objectives with other EU policies and objectives

The general and specific objectives of the proposed Bio-based PPP make it a driver of smart, sustainable and inclusive growth, in line with the objectives of the Europe 2020 Strategy and its flagship initiatives "Innovation Union", "A Resource Efficient Europe" and "An Industrial Policy for the Globalisation Era".

Through the implementation of its objectives, the Bio-based PPP can significantly contribute to meeting the EU's targets on climate change and energy efficiency. Its objectives are also in line with those of several recent policy initiatives, such as the European Bioeconomy Strategy, the updated Industry Policy, the EIP for Agricultural Productivity and Sustainability and the proposal for rural development under the revision of the CAP, the Smart Specialisation Strategy and the proposal for the 7th Environmental Action Programme, as well as the proposal to amend the Renewable Energy and Fuel Quality Directives with regard to ILUC[60]. See Annex 9 for more detailed information.

Several of these policies and their evolution will strongly influence the eventual impact of the PPP. At the same time, the PPP will provide research- and innovation-based inputs that can help shaping the regulatory environment.

4.           Policy Options

The Commission proposal on Horizon 2020, which is currently under discussion, envisages activities supporting bio-based industries under two pillars "Societal Challenges" and "Leadership in Enabling and Industrial Technologies". The Horizon 2020 proposal was subject to an earlier impact assessment[61].

Since R&I activities supporting bio-based industries are foreseen under Horizon 2020, the present impact assessment will use Horizon 2020 as a baseline or “zero option”, against which the two different forms of PPPs that can be created in accordance with Horizon 2020 will be analysed. The aim is to identify the most cost effective and efficient option to support the development of sustainable and competitive bio-based industries in Europe in view of the problems identified under Section 2. A schematic comparison of three options on several parameters is included in Table 1.

The three options will be compared assuming the allocation of an EU contribution of € 1 000 million to bio-based industries under Horizon 2020, which will be drawn from the Societal Challenge "Food Security, sustainable agriculture, marine and maritime research and the bio-economy" and the Key Enabling Technology (KET) "Biotechnology". Cross-cutting activities with other parts of Horizon 2020 are foreseen, such as the Societal Challenge "Secure clean and efficient energy" or the KET on "Advanced Materials", as well as with other potential PPP initiatives, such as SPIRE.

Alternative scenarios with a reduced EU contribution will not be taken into consideration as they would imply that raising the necessary resources for demonstrating technologies and supporting deployment at the relevant scale and across the five value chains, as described under Section 3, will not be possible.

4.1.        Option 1 – Business as Usual

The "Business as Usual" option (BAU) is based on Horizon 2020 only ("zero option"). This implies a continuation of the Collaborative Research model applicable under FP7, integrating Horizon 2020 improvements (e.g. more emphasis on demonstration). Projects will be carried out jointly by several partners in accordance with the conditions and rules for participation set out by Horizon 2020. The FP will:

· Implement (bi)annual work programmes prepared by the European Commission in consultation with Member States and stakeholders. The work programmes are subject to approval by the Member States in the Programme Committee and will be carried out by the Commission or by an Executive Agency. Based on the experience from previous FPs, the BAU option will: Cover a broad range of topics, depending on Member State policies and stakeholders' interests in the area of bio-based industries;

· Formulate specific objectives at the project level, rather than supporting cross-project execution of an elaborated long-term strategic vision;

· Finance projects with a modest demonstration component, typically covering TRLs from 2 to 5 rather than TRLs from 4 to 8;

Result in limited industrial participation (e.g. less than 10% of large industries and up to 30% of SMEs in FP7), compared with at least 60% share of participation of RTOs and academia.

4.2.        Option 2 – Contractual PPP

The "Contractual PPP" option (c-PPP) implies a contractual agreement between the European Commission and the private partners, who are organised in a dedicated industry group. This option gives a stronger advisory role to the industry group, which proposes a SIRA. As under BAU, standard Horizon 2020 rules and procedures fully apply, also with regard to the preparation of the (bi-)annual work programmes, which are subject to approval by the Member States in the Programme Committee. Therefore, c-PPP option will:

· Follow a similar programming approach as the BAU, see above, that does not foresee the adoption of a long-term strategic research agenda or of a large-scale multi-annual funding commitment from the EU;

· Have a limited leverage effect in terms of additional industrial investment in R&D&I.

4.3.        Option 3 – Institutional PPP

The "Institutional PPP" option (i-PPP) involves the creation of a Joint Technology Initiative (JTI) established as a Community body under Article 187 of the Treaty on the Functioning of the EU (TFEU). It is foreseen under Article 19 of Horizon 2020 when justified by the scope of the objectives pursued and the scale of the resources required.

As a Community body, the JTI has a dedicated administrative structure with a governance system of its own, the so-called Joint Undertaking (JU). The JU is constituted by the European Commission and the private partners, who are organised in a dedicated industry group. It is in charge of programming and implementing the JTI's activities. Funding rules derogating from the general Horizon 2020 rules can be defined where necessary. As a consequence, the i-PPP option will:

· Allow for a long term EU and industrial budget commitment, providing industrial partners with a stable long-term perspective and an opportunity to adopt a long-term strategic innovation and research agenda (SIRA);

· Offer industry with a stable framework and the opportunity to adopt a long-term strategic vision.

· Provide greater scope for financial contributions by the industry as funding rules derogating from the general Horizon 2020 rules can be defined where necessary;

· Fund projects that contribute to a strategic long-term objective;

· Put more emphasis on demonstration activities (TRLs 4 to 8), paving the way for industry to deploy and commercialise the results;

· Attract substantial industrial participation (typically at least 25% in research projects; more than 75% for demonstration projects).

i-PPP is the only of the three options to include a legally binding financial industry commitment. It builds upon the past experience and the lessons learnt from JTIs operating under FP7 in other areas, see Section 2.7. A JTI on Bio-based Industries will thus immediately benefit from the improvements in design and suitability of the JTI instrument under Horizon 2020, including simplified administration, lighter financial procedures, possible use of common services/functions, and increased stakeholder commitments to the JTI. The governance structure is described in more detail in Box 4.

The principles of openness and transparency applicable in Horizon 2020 will be fully respected in i-PPP. New stakeholders interested in participating directly in the JTI will be able to join the JU. This will ensure that actors in the bio-based industry that are not fully involved in the initiative are not excluded. Non-EU organisations may also join the JTI, provided that they fully adhere to its regulations and obligations. The co-funding principle will be assessed for new stakeholders, also in relation to the technical and financial risks to be assumed at each moment.

Member States have been involved as additional public partners funding R&I activities in some JTIs under FP7. This is not the case in the case in i-PPP, as it was considered that they could have a much more significant impact on its success by facilitating the deployment of the value chains developed in the JTI. As in all JTIs they will participate in a Member States Representatives Group.

While the JTI would be established from 2014 to 2020, in line with the duration of Horizon 2020, the JU would need to remain in place until 2024, in order to follow through projects selected in the final years of the JTI until the end. A similar mechanism also exists for FPs.

Box 4: Governance of a JTI under Horizon 2020 In line with the Court of Auditors's (CoA) positive report on JTIs[62], the implementation of a JTI foresees: · Clear commitment of the stakeholders; · Visible legal, contractual and organisational framework to structure the specific joint commitments to which stakeholders are ready to sign up; · Firm governance structure, including shared decision-making powers and management by the public and private partners, visible to all stakeholders; · Budgetary certainty via the budget ceiling for EU contribution to cost of the operations and the private partners' financial commitment; · Efficient use of public resources as the Commission passes operational roles to the JU while retaining focus on regulation and supervision. · Even with the current small-sized bodies, JTIs are already approximately cost neutral for the Commission in comparison to Collaborative Research initiatives and contractual PPPs in terms of administrative, supervision, establishment and winding up costs, as shown by an in-house cost-benefit analysis by DG RTD[63]. The private partners pay 50% of the running costs of the JTI. Increasing the size of operations of JTIs and simplifying their functioning on the basis of the common participation rules for Horizon 2020 will make the JTI a cost-effective means of implementation. The following simplification measures are being considered to ensure a good balance between cost-neutrality of the JTI under Horizon 2020 and increase in cost-effectiveness: – Foreseeing a single set of Rules for Participation and Dissemination that will, subject to derogations where appropriate, render participation easier and ensure a single and sufficiently flexible regulatory framework, will create a more coherent set of instruments covering both research and innovation, enhance programme accessibility and attractiveness, and increase the scientific and economic impact while avoiding duplication and fragmentation. – Introducing lighter financial procedures, which reduce the staff needed for such functions, and thus lower administrative costs. Specifically, the new general Financial Regulation foresees a new category of body under centralised indirect management: the special EU body entrusted with the implementation of a PPP. This body is entitled to adopt financial rules based on a new, tailor-made, simplified "model" Financial Regulation proposed by the Commission. The draft proposal for a simplified "model" Financial Regulation includes the JTI/JUs in the general discharge procedure of the Commission. Such indirect discharge will lead to simplification, due to a relatively light procedure for the establishment of the budget and for financial reporting. – Using common IT systems, including the proposal evaluation system for Horizon 2020 which increases harmonisation, reduces the costs for such services and allows JU staff members to better adapt to the common software management programme. Moreover, by using the "commons" of the programme, the JUs coordinate better their internal processes regarding portfolio management, as well as monitoring and reporting towards the legislator and the Commission regarding management of programmes and projects. – Exploring different options regarding establishing common services/functions (IT, Audit, Legal issues) for PPP/JTIs. These options are: 1) Commission provides common services to JTIs/JUs and requests from them the payment of a proportional contribution; 2) JTIs JUs set up their own common functions, which are specific and shared among them; 3) Each JTI JU organises itself individually. – Sharing functions in the context of the internal audit or for the accounting officer (the latter case being explicitly provided for by the Rules of Application (RAP), Service Level Agreements, common service and supply contracts and exchange of information among JU colleagues. · At the same time, the above simplifications envisaged for the new JTI/JUs to be set up under Horizon 2020 will also allow them to become more effective by: – Increasing stakeholder commitment to the JTI through a definition of in-kind contributions of their private partners, which are their essential contribution to the PPP, rendering their financial involvement more transparent, improved representation of the public and private partners in governing bodies, a balance influence between the Commission and Industry in the appointment of the Executive Director, etc.) – Introducing more flexible budgetary and procurement procedures through adjusted legislative framework building on the new Financial Regulation. Increasing the accessibility and attractiveness of the programmes. The Horizon 2020 JTI/JUs shall apply the common set of rules of the Horizon 2020 Rules for Participation, thus providing a coherent legal framework. Any derogation requested by the JU would have to be duly justified for specific needs and should be cost-effective for the implementation of Horizon 2020.

Table 1: Schematic comparison of the three options

Option || BAU || c-PPP || i-PPP

Multiannual EU budget commitment || No || Indicative budget (not legally binding) || Yes

Implementing body || Commission / Executive Agency || Commission / Executive Agency || Joint Undertaking Programme Office set up by Commission and industry group.

Governance || Commission || Commission || Joint Undertaking Programme Office set up by Commission and industry group.

Critical mass || Stand-alone projects || Stand-alone projects with increased industry commitment || Projects addressing whole value chains, including capital investment

Multi-annual Strategic Research Agenda || Commission, consulting with stakeholders || Commission, strong advisory role for industry group || Industry group, but subject to joint decision with the Commission.

Work Programme || Commission, (bi-)annual || Commission, (bi-)annual || Joint Undertaking, multi-annual on the basis of the SIRA

Role of Member States || Programme Committee approval required || Programme Committee approval required || State Representatives Group in the JTI structure, in principle advisory role. Additional competencies / responsibilities could be considered.

Financing level / source || € 1 000 million from Horizon 2020, Horizon 2020 general rules apply || · € 1 000 million from Horizon 2020 · Undefined industry contribution Horizon 2020 general rules apply || · € 1 000 million from Horizon 2020 · € 2 800 million from industry (€ 202.5 million in cash; € 2 597.5 million in kind) Derogations to Horizon 2020 general rules possible, allowing for greater contribution by private stakeholders

Applicable when? || Default option || Use following criteria[64]: (a) Added value of the action at Union level (b) Scale of impact on industrial competitiveness, sustainable growth and socio-economic issues (c) Long-term commitment from all partners based on a shared vision and clearly defined objectives (d) Scale of resources involved and ability to leverage additional investments in research and innovation (e) Clear definition of roles for each of the partners and agreed key performance indicators over the period chosen || As for c-PPP plus: (a) R&I cannot be optimally implemented through BAU and Horizon 2020 Rules for Participation and Dissemination may need to be adapted to reach the objectives. (b) Objectives are particularly long term and/or complex and/or expensive. (c) Market failures (resource constraints, risks and 'spill-overs') large, justifying large-scale EU level public intervention. (d) Long term commitment based on (i) industry driven research and innovation agenda with corresponding public and private financial contributions, and on (ii) specific implementation modalities, is required. (e) Private partners are prepared to co-share responsibilities (including costs) and decision-making with public partners within a dedicated legal entity with a specific governance structure.

5.           Assessment of impacts

The assessment of the impacts of the three policy options was carried out on the basis of a number of input and output parameters. The criteria used for the current Impact Assessment were defined in line with the criteria for PPPs established in the Horizon 2020 proposal, see Table 2.

Table 2: List of criteria for the assessment of impact based on input or output

Input parameters || Output parameters

Critical mass of resources and leverage effect on R&I || Environmental impacts

Critical mass of participants and overcoming fragmentation || Economic impacts

Innovation impacts || Social impacts

Efficiency of the governance structure || Addressing the technological and innovation challenges

Coherence with Member State programmes ||

Input parameters influence the framework conditions under which the R&I activities dedicated to bio-based industries will take place in the three options. The effectiveness and efficiency of these R&I activities will then influence the impact on a set of output parameters, for example in environmental, economic and social terms.

5.1.        Input parameters

5.1.1.     Critical mass of resources and leverage effect on R&I

As described in Section 2, the participation of industry in R&I activities needs to be strengthened under Horizon 2020 in order to ensure higher impact. At a time where public budgets are under strain, it is also more relevant than ever to leverage additional R&I investments from the private sector in the EU. It is therefore important to assess the three options on their ability to motivate industrial partners to participate in R&I activities at EU level and to mobilise additional R&I resources (input additionality).

For BAU and c-PPP general Horizon 2020 rules apply. The participants' financial contributions to R&I projects will be modest compared to the EU contribution. The total project contribution under the programme will therefore only marginally exceed the € 1 000 million EU funding (e.g. as a result of less than 100% funding for demonstration activities).

Under i-PPP specific derogations from the general Horizon 2020 funding rules are possible. The industry group will contribute substantially to the financing of research, demonstration and deployment activities. A matching contribution of € 1 000 million consisting of in-kind and in-cash contributions from industry will effectively double the available resources for the R&I activities under the i-PPP. This will be supplemented by an additional € 1 800 million from the industry group for infrastructure-based activities. These will be invested in demonstration and flagship biorefinery plants, as needed to support the up-scaling of biorefineries. See Box 5 for more detailed information on the budget.

The commitment of € 2 800 million by industry under i-PPP is motivated by the stable long-term budgetary framework and the enhanced degree of industry impact on the R&I agenda offered by the option. Whereas c-PPP also allows for a greater industry involvement than BAU, its programming lacks the long-term stability required to mobilise the same level of additional private sector resources as i-PPP.

Box 5: Strategic Research and Innovation Agenda (SIRA) and proposed budget for Bio-based PPP

The SIRA provided by the industry group backing the Bio-based PPP proposal outlines the R&I priorities identified to meaningfully address the challenges listed under Section 2.5, also see Annex 3. They are complemented by a set of ambitious objectives presented under Section 3. Fully implementing the SIRA and meeting these objectives will be vital for maintaining the competitiveness of European bio-based industries and giving them a strong stand against global competition.

The SIRA estimates that a minimum budget of € 3 800 million will be required. Two types of activities are distinguished: project-based and infrastructure-based activities:

· Project-based activities have been allocated a budget of € 2 000 million, which will be allocated through calls for proposals, and include three major types of projects: Value Chain Demonstration Projects, which aim to integrate and deploy technologies and R&I results into five different value chains, bringing technology close to commercial scale through up-scaling in demonstration activities and flagship biorefinery plants. – 65 % of the activities budget (main emphasis of the SIRA) R&D Projects, which focus on filling the gaps in technological innovation for the three main parts of the value chains, i.e. biomass supply, biorefineries and products/markets. Dedicated projects will develop the specific technologies and concepts needed to realise the value chains and provide the principles in pilot installations. – 30% of activities budget Supporting Projects, which address the cross-sectoral challenges and support the value chains in becoming a reality. – 3.2 % of activities budget

· Infrastructure-based activities have been allocated a budget of € 1 800 million for the construction of demonstration and flagship biorefinery plants. This is not eligible for public funding under Horizon 2020 but is part of the overall commitment taken by industry.

The BIC is willing to commit at least € 2 800 million of investment (€ 202.5 million in cash; € 2 597.5 million in kind) based on a European Union commitment of an additional € 1 000 million. A more detailed explanation of the budget is included in Annex 3.

In summary, the legally binding financial commitment of a wide range of industry partners under i-PPP make the participation of industry and the leverage of additional resources for R&I activities more certain than under the other options. This is further complemented by a significant additional investment in infrastructure-based activities While the stronger involvement of industry in the programming of c-PPP is likely to have a positive effect on their participation, the mobilisation of significant additional R&I resources is likely to be marginal. Although the stronger focus on innovation aspects is likely to attract interest from the private sector, the industrial participation and leverage of private investment under BAU is considered to remain within the range of previous programmes.

BAU = || c-PPP + || i-PPP ++[65]

5.1.2.     Critical mass of participants and overcoming fragmentation

As described in Section 2, the dispersion of stakeholders across various sectors, disciplines and Member States is one of the main hurdles to the development of successful bio-based industries. In view of the complex technological and innovation challenges bio-based industries are facing, the ability of the three options to motivate these stakeholders to work together in an integrated way along value chains to resolve them in a cost-effective and efficient manner should be assessed.

BAU could build on the experience of FP7 (e.g. Joint Biorefinery Call) by increasing the emphasis on large projects that aim to bring together participants along the value chain. While this is likely to attract relevant participants from academia and RTOs and further mobilise SMEs, it does not offer a realistic possibility to involve large industry to the extent required. However, the latter are key to successfully implement costly demonstration and flagship biorefinery plant activities and bridging the "valley of death" between research and deployment.

c-PPP is expected to be similar to BAU, although the involvement of an industry group in programming is likely to further encourage and facilitate collaboration between stakeholders along the value. Indeed, the positive impact on industry participation in R&I activities is likely to be limited by the fundamental mechanisms for managing the calls, which is the same as under BAU and will not achieve the necessary leverage of private investments.

The stable long-term perspective and the strong financial leverage of i-PPP create incentives for bringing together and promoting collaboration between market players along value and supply chains. This will contribute to overcoming fragmentation and reducing duplication of private sector R&I, by diminishing the significant transaction costs and addressing the lack of necessary “social capital” that often prevent companies to engage in the desired level of collaboration. In this context, i-PPP will also bring together many players who have no tradition of working together and will aim to create connections between value chains of seemingly entirely separate sectors that have a potential for synergies, for example through the conversion of each other’s side streams or wastes into new products (e.g. food and chemical industry).

The multidisciplinary setting and the common development of the SIRA by industry and the research community will also ensure intense collaboration between stakeholders in the innovation chains. Based on the experience of JTIs under FP7, i-PPP is likely to achieve high industry participation rates due to the requirement for a matching contribution from industry and a high level commitment to the projects based on industry's involvement in programming. This particularly applies to large industry, while the picture for SMEs may be a bit more mixed. The benefits from integrating emerging value chains, which will provide them with up- and down-stream partners, as well as with better support for demonstration activities (e.g. access to infrastructure), should however represent strong incentives for SMEs to participate in i-PPP. This is supported by the interim evaluation of existing JTIs[66], which signals mainly positive elements for SMEs, and the current membership of the industry group that aims to have an important and well-balanced participation of SMEs. While the participation of academia and RTOs may be a bit lower in demonstration activities, it should be comparable to the BAU in research activities. Specific targets and Key Performance Indicators (KPIs) related to involvement of research institutes, universities and SMEs will be defined.

In summary, the stable long-term framework provided under i-PPP allows for more integrated strategic programming than c-PPP and BAU. It thus is expected to achieve a better balance between the private and public partners required to address the technological and innovation challenges in a value chain approach. While academia and RTOs may be a bit less involved in demonstration than in research activities under i-PPP, this imbalance is not likely to be as significant as the one caused by limited industry participation under the two other options and by lack of integration of the projects in the wider economic context. Moreover, c-PPP is likely to fare better than BAU due to the stronger involvement of industry.

BAU = || c-PPP + || i-PPP ++

5.1.3.     Innovation impacts

Horizon 2020 will provide more support for innovation and for activities closer to market compared to previous FPs with the aim of providing seamless and coherent funding from idea to market. W

While BAU will support pilot scale and demonstration activities, it will not be able to attract the necessary large industries to finance the construction of demonstration and flagship biorefinery plants, which are essential for the deployment of bio-based industries.

Greater industry involvement under c-PPP will enhance the chances for technology deployment, as industry will tend to participate in projects for which they see good deployment opportunities. However, like BAU, c-PPP does not provide any mechanism to mobilise the necessary industry resources for developing demonstration and flagship biorefinery plants.

i-PPP takes industry commitment to another level. The strong financial commitment from industry – possible only in a setting with long term stability – guarantees that the necessary resources will be available for work on demonstration and flagship biorefinery plants. This commitment also shows industry's confidence that the technologies developed in the JTI setting will truly provide a competitive edge and that there will be significant opportunities for subsequent commercial deployment.

The fact that research, demonstration and flagship activities are operated under a common roof, with industry participants involved along the entire chain of events and with substantial commitment of private financial resources, will help ensuring a smooth transition between different phases in technology development. This will result in a reduction of the time required to move from one TRL to another, or more simply put, in a reduction of "time to market".

Beyond TRL 8, funding is no longer within the mandate of Horizon 2020. Nevertheless public funding still has a role to play in stimulating commercial deployment of technologies with major sustainability benefits. In contrast to both other options, option i-PPP leads to the creation of a legal entity, the JU, with an identity of its own. Due to its broad-based support from the public and private sector and its long-term character, it has an opportunity to build strong visibility and credibility. It can therefore act as an interlocutor with other institutions (e.g. EIB, national or regional authorities, private investors) and help leverage additional private and public funds for setting up flagship biorefinery plants and for the commercial deployment of technologies developed and demonstrated with Horizon 2020 support.

In summary, the integrated long-term strategic programme under i-PPP leverages significant resources for demonstration activities and infrastructure, and the building of flagship biorefinery plants, which will allow activities under i-PPP to reach higher TRLs than under c-PPP and BAU and to facilitate the financing of the commercial deployment by other public and private sources. c-PPP is expected to fare bit better than BAU due to stronger industry involvement, which is likely to push for higher TRLs within the available resources.

BAU = || c-PPP + || i-PPP ++

5.1.4.     Efficiency of the governance structure

In times of austerity it is more important than ever to assess the three options on the basis of the cost-effectiveness and efficiency with which they implement their activities.

The governance structure of Horizon 2020, as applicable under BAU, is in the process of being established, it can however be assumed that it will follow the standard means of implementation of an FP, which is done "in house" by the Commission and possibly Executive Agencies.

c-PPP will be implemented in the same way as BAU with the addition of an industry consultation process. Since the cost for this will be borne by the Commission, the costs under c-PPP will be marginally higher than under BAU.

The efficiency of i-PPP has to be assessed against BAU and c-PPP, on the basis of experiences with JTIs under FP7. These show that JTIs constitute a highly effective means of implementing the FP.

The use of a small-sized JU to implement the JTI, as proposed under i-PPP, is already at least cost neutral and probably even more cost-effective for the Commission, than implementing the FP in terms of administrative, supervision, setting-up and winding down costs. This is mainly owed to the fact that 50% of the administrative costs of the JU's operation are covered by the private partners. It can also be expected that the costs of and time for setting up a new JU for bio-based industries will be significantly lower than for the ones set up under FP7; the experience gained from the latter favours a short setting-up phase, which tends to reduce costs.

Benefits of a JU, compared to the standards means of implementing an FP, can be non-monetary, such as shared decision-making with private partners, or monetary by leveraging significant additional financial resources from the private sector (e.g. € 2 800 million from the private sector matching € 1 000 million public funding from Horizon 2020). Some of the costs and benefits of the public intervention to set up the JU will only become apparent over long periods of time. Thus, the more efficient use of public resources in a JU allows the Commission to transfer operational tasks to the JU while retaining activities focused on regulation and supervision.

In summary, i-PPP is expected to fare better than BAU and c-PPP in terms of the cost-effectiveness of the governance structure, as administrative costs are shared between the public and private partners. It will also give rise to additional monetary and non-monetary benefits.

BAU = || c-PPP = || i-PPP +

5.1.5.     Coherence with Member State and regional programmes

EU funding of R&I only represents about 5% of the total funding for these type of activities in the EU. The remaining 95% are mostly managed at Member States and regional level. It is therefore important to avoid duplication between the different funding scheme as far as possible.

In the case of BAU and c-PPP, the Programme Committee serves as a relay to exchange information between EU, Member State and regional programmes.

Under i-PPP, Member States will contribute through a Member States Representatives Group (MSRG), which serves as a relay for information exchange and aligning national and European programmes. i-PPP is expected to achieve more coherence and synergies between the EU and Member States than BAU and c-PPP, because:

· Companies as well as national and regional clusters, i.e. "users of national programmes" are shaping the mandate of the JTI. They can be expected to actively push for a maximum level of synergy when shaping the JTI programme and providing "user" feedback to their national and regional authorities;

· The long-term character of the SIRA and the strong industry commitment will send clear signals to Member States and regional authorities about long-term goals of EU R&I policy, encouraging a better alignment of national or regional programmes.

In addition, the MSRG will contribute to identifying, at an early stage, opportunities for deployment and local investment of the i-PPP results with a view to matching these with the interest of various public institutions and private investors. Mobilisation of funds from the EIB, Structural Funds and private investors, including venture capital, can thus be facilitated.

This approach will be particularly advantageous from the perspective of EU Cohesion Policy. Several Member States have difficulties in identifying a sufficient number of economically viable projects for meaningfully investing the resources available to them for rural development or "Smart Specialisation". The development of a network of biorefineries provides an excellent opportunity to leverage Structural Funds, creating new sources of employment and sustainable economic growth. The JTI as an institutional actor will thus play an active role in matching investment plans of industry with deployment of Cohesion Policy instruments.

In summary, while Member States have less direct influence on the programming of i-PPP than under BAU and c-PPP, coherence and synergies with their activities will be ensured through the MSRG, as well as through some of the partners involved in local and regional bioeconomy initiatives. Furthermore, Member States will be actively consulted and involved in the deployment of the JTI results. i-PPP thus gives them the opportunity to benefit much more directly from its outputs than c-PPP or BAU.

BAU = || c-PPP = || i-PPP +

5.2.        Output parameters

5.2.1.     Environmental impacts

Bio-based industries can contribute significantly towards reaching EU objectives on climate change, renewable energies, a low-carbon economy and sustainability, see Section 2.2.1. Environmental benefits of the bio-based industries will mainly depend on the scale and speed of deployment, see Section 5.1.3. The main boundary conditions are however related to the sustainable sourcing of biomass, which needs to take into account biodiversity and ecosystems.

Strong emphasis on environmental aspects can be put in the work programmes under BAU. However, the difficulty to take activities to higher TRLs and to effectively involve all stakeholders will hinder the optimal deployment of bio-based industries. BAU can therefore not be expected to deliver a strong environmental impact.

Under c-PPP, there will be more interaction between the industry group and the European Commission than under BAU, creating an additional channel to convey the importance of environmental boundary conditions to industry. As under BAU, the Commission and Member States have the final say on programming, they can thus decide to put strong emphasis on environmental aspects in the research actions. Since c-PPP will not significantly improve commercial deployment over BAU, its environmental impact will however also be limited.

The successful deployment of bio-based industries under i-PPP could have a very favourable impact on a number of environmental issues. Industry's strong impact on decision making and focus on deployment could raise concerns as to the strict application of environmental boundary conditions under i-PPP. However, the equal number of representatives of Commission and industry representatives in the Governing Board (GB), the main decision body of the JTI, should ensure that they are respected. The GB creates a discussion forum between the public and private partners in which the Commission can raise awareness on and push for taking on board important policy objectives, such as biodiversity and ecosystem protection. If necessary, the Commission can use its voting rights to make sure that the JTI will act in line with these policy objectives.

i-PPP will ensure a positive environmental impact of bio-based industries in a number of other ways:

· Reducing GHG emissions by replacing products and fuels produced from fossil resources by bio-based products and biofuels. The production of "advanced bioethanol" is estimated to deliver emission savings of 101 million tonnes CO2 equivalent, i.e. more than 2% of the total EU emissions in 2010, see Annex 10 for examples. In the chemical industry, moving from 10% to 30% bio-based chemicals overall (the industry group's target for 2030) will have an even larger emission reduction impact[67]. Bio-based industries will play a key role in moving towards a low-carbon economy by 2050;

· Improving resource efficiency of industrial processes and value chains. The use of innovative technologies, such as industrial biotechnology, can make production processes more environmentally friendly by improving their resource efficiency (e.g. lower temperature, water and energy consumption, and CO2 and waste production). Grouping different industrial sectors in a JTI with the aim of setting up new value chains will help identify and prioritise the smart use of feedstock from the outset, for example when the by-products or wastes from one industry become the feedstock of another one. Bio-based industries will have an important role in making the transition to a circular, resource-efficient and resilient economy in Europe[68];

· Reducing waste in line with the waste hierarchy and the aim to reduce landfilling of biodegradable waste. Bio-based industries can contribute directly to reducing biodegradable waste streams by preventing their generation through more resource efficient industrial processes, see above, and by developing new technologies for re-using them to produce value added products. For example, 138 million tonnes of food are wasted in the EU every year. Disposing it costs European taxpayers up to € 90 per tonne and produces 170 million tonnes of CO2 per year. Converting this waste into value added products would thus save taxpayers money, generate economic revenue and mitigate climate change. Significant advances in processing technologies may also allow bio-based industries to make use of biodegradable wastes that are currently classified as hazardous, such as discarded construction wood. Another concrete example for the environmental impact from bio-based industries on waste reduction is provided in Box 6;

· Ensuring sustainable biomass sourcing taking into account environmental boundary conditions. Key lines of action for the Commission in the governance of i-PPP will be to insist on the use of life cycle analysis (LCA) and the consistent application of sustainability criteria (including biodiversity) with regard to sourcing of biomass. In this regard, use of biomass fractions from industrial and municipal waste will be encouraged. Removal rates for the use of residues from agricultural land and forests will be controlled to avoid harming soil fertility, ecosystem and biodiversity. This subject will also require further research. The production of dedicated industrial crops needs to be well considered in terms of total area and type of land allocated as well as in terms of developing sustainable agricultural practices. The focus on non-edible biomass produced in the EU should assist in mitigating the competition between different uses of biomass (e.g. food versus industrial and energy purposes) and a potential increase in commodity prices.

Box 6: Assessment of the environmental impact of the substitution of all single-use carrier bags with biodegradable bags in Europe[69]

An average plastic carrier bag weighs 12g. With a European market of about 100 billion bags, a total of 1.2 million tonnes of plastic are used every year to produce these bags. Assuming that this plastic is substituted by biodegradable bioplastic made exclusively from maize starch, it can be estimated that 280 000 hectares (ha) will be required to grow this maize. The calculation is based on the assumption that 1.2 million tonnes of starch (dry matter) have to be extracted from about 1.82 million tonnes of grain (dry matter) with a starch content of 66%. European maize productivity is estimated at 6.6 tonnes grain/ha. 280 000 ha represents about 0.06% of the EU's agricultural land.

The successful development of advanced biorefinery processes that use residues and waste as a raw material would reduce the use of agricultural land for this type of activity to almost nothing.

In summary, i-PPP is likely to have a higher environmental impact than c-PPP and BAU. While the three options do not differ strongly in the Commission's ability to impose environmental boundary conditions if necessary, they do on several other accounts. Activities taking place under i-PPP will be part of a integrated long-term strategic vision for the development of bio-based industries that is largely owned by industry. By ensuring that industry takes environmental boundary conditions into account from the outset when developing new value chains will encourage the adoption of a harmonised approach for the sustainable sourcing of biomass, which may become a standard for future value chains in Europe and possibly even world-wide. While industry will also be more strongly involved in the programming of c-PPP, the lack of a strong strategic vision is likely to dilute the impact, although it is still expected to be better than under BAU. Finally, the much more efficient deployment of i-PPP results compared to c-PPP and BAU is further going to enhance any positive environmental impact.

BAU = || c-PPP + || i-PPP ++

5.2.2.     Economic impacts[70]

Bio-based industries can significantly contribute to increasing the competitiveness of European industries and generating growth and jobs, as described under Section 2.2.2. However, like the environmental benefits, these economic benefits depend on the scale and speed of deployment of bio-based industries in Europe, which in turn depends on the participation of SMEs and large industries, as described under Section 5.1.3.

BAU will not achieve the necessary reduction in time to market and deliver the required technology deployment boost in Europe, due to its inability to attract sufficient industry participation, in particular from large industries. It will thus not assist critical industries for the EU, such as the chemical or pulp and paper industries, to gain competitiveness in the major future-oriented and rapidly growing bio-based segment of the market, which is projected to grow from currently approximately 10% on average to up to 25% in 2025[71]. BAU will also not deliver a meaningful boost to achieve important EU policy targets such as the required production level of advanced biofuels to fulfil the 10 % biofuel target by 2020 in the Renewable Energy Directive.

Under c-PPP, stronger and more structured input from the industrial group in programming will achieve greater success in applied research and promote industrial participation in the programme. Since c-PPP is subject to standard Horizon 2020 rules, it does however not offer industry a guaranteed long-term stability and is not equipped to generate the financial leverage with large private sector contributions as required to realise the required progress towards high TRL levels (especially TRL levels 7 and 8). Although c-PPP will succeed in achieving better industry participation and thus provide greater economic benefits than BAU, it will nonetheless not be able to deliver the necessary substantial improvements to assist bio-based industries to overcome the technological and innovation challenges they are facing.

i-PPP is best suited to complement the existing research strengths in Europe with a strong focus on activities with high TRLs (in particular, for demonstration and flagship biorefinery plants). The stable long-term framework of the JTI allows for integrated strategic programming with industry and will thus succeed in mobilising relevant market players around selected value chains and leveraging the private investment required to address the technological and innovation challenges bio-based industries are facing. In particular, it will allow:

· Biomass producers to connect with a wide range of processing industries, opening new markets for agricultural and forestry residues, bio-wastes and industrial crops. It will also support the development of new technological and logistical solutions for cost-effective and efficient collection, storage and transport of the feedstocks. In order to take into account environmental policy objectives relating to sustainability and the protection of biodiversity and ecosystems, biomass producers will work with other players along the value chain in developing sustainability criteria for the sourcing of biomass;

· Processing industries to access reliable and sustainably sourced feedstock by connecting them to biomass producers across Europe. It will assist them in developing new processes to separate, pre-treat and convert different feedstocks into intermediates, and to transform these into bio-based products and biofuels.

The grouping of key market players around five value chains concentrating on different feedstocks will allow for improved technology and knowledge transfer and sharing of infrastructure for demonstration activities, which will contribute to higher cost-effectiveness and efficiency. This integration into a value chain will particularly benefit SMEs.

Given the relatively high price of feedstock in Europe, processing industries will explore integrated biorefinery processes that allow for the co-production of bio-based products and bioenergy in order to maximise the valorisation of the resource and reducing production costs, following the example of petro-chemical refineries. A biorefinery co-producing cellulosic ethanol and biochemicals could thus reduce the sales prices for biofuels by 30%, compared to a biorefinery only producing biofuel.

The significant resources allocated for demonstration activities and infrastructure to support the techno-economic assessment of new processes and products, as well as for the development of a number of flagship biorefinery plants. These will assist in decreasing the per unit costs of production by 2020, and provide a knowledge base for decreasing the investment costs as of 2020[72].

Finally, processing industries will work together with biomass producers and end users to develop sustainability criteria for the sourcing of biomass and the environmental efficiency of production processes to be used for life cycle assessments, as well as for the development of standards and labels for bio-based products;

· End users or consumer brands to have access to more environmentally-friendly alternatives to petro-chemical products and fuels, as well as to entirely new products (e.g. materials) with new characteristics and functionalities, which can be used to develop and test new consumer products. End users will work together with biomass producers and processing industries to develop standards and labels for bio-based products taking into account the sustainability of biomass production and conversion processes.

By bringing together the relevant market players using a value chain approach i-PPP will accelerate the development of sustainable and competitive bio-based industries in Europe, see Annex 2 for a more detailed description of the market players. In particular demonstration and flagship biorefinery plants will have a multiplier effect, which will pave the way to the construction of a greater number of commercial scale biorefineries in the EU. The number and scale of commercial biorefineries and the extent to which these rely on EU biomass sources will determine economic impact: creation of revenue and added value, competitiveness of bio-based industries, less dependence on fossil resource imports and improved security of supply. This will boost the EU's biofuel sector and chemical industry[73], see Annex 10 for examples. In particular, it will help the latter in maintaining a position of global leadership with a strong EU manufacturing base as the global trend towards a rapidly increasing share of bio-based chemicals materialises.

In summary, i-PPP is expected to have the most significant economic impact as it mobilises market players along the entire value chain, as well as the significant private investment, in order to address the technological and innovation challenges that are hampering the development and deployment of bio-based industries in Europe in a cost-effective and efficient manner. While c-PPP is likely to mobilise industry better than BAU, it fails to provide the integrated strategic vision needed to leverage the scale of resources necessary to tackle the technological and innovation challenges.

BAU = || c-PPP + || i-PPP ++

5.2.3.     Social impacts

Like the environmental and economic impact, one part of the social impact of bio-based industries as a powerful engine for job creation and for rural development will depend on their level of deployment, see Section 5.1.3. The other part is linked to the introduction of bio-based products and biofuels into mature consumer markets, where they will either replace existing less sustainable goods or try to establish themselves as entirely new ones. Their success will depend on pricing and environmental performance, and most importantly public acceptance.

As discussed under Section 5.2.2, BAU does not achieve optimal impact on deployment due insufficient industry involvement. It will hence not deliver the desired impact on job creation and rural development. While BAU may support the introduction of bio-based products into consumer markets, e.g. by continuing to develop standards for certain bio-based products as under FP7 or communicating their benefits to the general public, the social impact of introducing bio-based products and biofuels is likely to be limited by the difficulty of research activities reaching high TRLs in view of developing products that are close to the market.

With a limited enhancement in terms of deployment over BAU, c-PPP will also provide a limited improvement in job creation and rural development. The social impact on consumer markets is likely to be better than under BAU, due to the stronger involvement of industry. The public perception of bio-based products and biofuels may however be hampered by the lack of integration between different market players, which may lead to inconsistencies in the development of sustainability criteria, standards and communication activities.

The superior performance of i-PPP in terms of deployment drives its potential to deliver jobs. These jobs relate, on the one hand, to the construction and operation of biorefineries and on the other hand, to production, collection and transport of biomass. Both activities involve plenty of opportunity for low-skilled workers.

Lack of economic activity in many rural areas currently leads to declining standards of living, a loss of population and difficulties to maintain the quality and diversity of agro-eco systems. Contrary to most other industries, the rule that "biorefineries" follow "biomass production" creates a strong driver for the bio-based industries to develop first and foremost in rural areas. The most important cost for the operation of most biorefineries is the feedstock, hence their potential to contribute significant new income streams to farmers and foresters and additional jobs in the biomass logistics and supply chain. An example on the social impact of bio-based chemical products is provided in Annex 10.

i-PPP is also likely to fare better with regard to the introduction of bio-based products and biofuels into consumer markets. The integrated strategic vision of the JTI will ensure that only the most sustainable and cost-effective bio-based products and biofuels in the different value chains are up-scaled in order to ensure their competitiveness on consumer markets. The application of a harmonised approach on sustainability criteria, LCAs, standards and labels will provide consumers with more transparency as to the benefits of these goods.

The establishment of a JU furthermore provides bio-based industries with a clear identity and one voice to reach out to the general public and explain to them how the feedstock for these advanced bio-based products and biofuels was sourced, why these products are more sustainable (e.g. replace fossil based products and possibly toxic chemicals by bio-based alternatives, more resource efficient production processes), what novel characteristics they offer (e.g. biodegradability).

In summary, the social impact of i-PPP is considered to be higher than that of c-PPP and BAU. This is largely due to the value chain approach, which brings on board a wide range of regional market players, but also allows for the development of more sustainable and cost-effective bio-based products and biofuels. The creation of a JU under i-PPP also gives a face to the nascent sector of bio-based industries, which is otherwise hard to grasp due to the very diverse market players it encompasses, which will allow for better outreach to the general public. c-PPP is likely to have a slightly better impact than BAU due to its stronger involvement of industry, which will improve deployment and develop a larger number of bio-based products and biofuels to high TRLs.

BAU = || c-PPP + || i-PPP ++

5.2.4.     Addressing the technological and innovation challenges

A number of specific objectives (and their operational objectives) have been identified under Section 3 to address the technological and innovation challenges identified in Section 2.5. Some objectives will only contribute to one challenge, others to more than one or all. Based on the discussion of the different input and output parameters above, the three options have been assessed with regard to their ability to deliver the specific objectives in Table 3.

While BAU is likely to improve in the development of bio-based materials compared to FP7, its ability to increase industry participation, in particular from large industry, and leverage private investments in R&I will be limited. It can also be expected that it will not succeed in mobilising additional resources for the development of flagship biorefinery plants.

c-PPP is expected to fare better than BAU on all activities in which a stronger industry involvement will be determining for success. While the consultation of industry in the programming is likely to also enhance their participation in R&I activities, the lack of additional leverage and of a strategic long-term perspective will dilute the impact of c-PPP. Like BAU, it will not succeed in mobilising additional resources for the development of flagship biorefinery plants.

Under i-PPP, industry's strong involvement in the development of the SIRA and its important financial commitment, both in terms of supporting R&I activities and the development of infrastructure, offer optimal conditions for delivering all the specific objectives. The ability of i-PPP in mobilising such significant resources relies on the stable long-term strategic framework it provides, which allows for a value chain approach that brings together all necessary stakeholders in a cost-effective and efficient manner.

In summary, the technological and innovation challenges bio-based industries are facing will be best addressed under i-PPP, as the framework it provides best succeeds in mitigating the significant number of market failures this nascent sector is struggling with. While the impact of c-PPP is better than that of BAU due to the better involvement of industry, it will not be able to create the coherent and integrated framework required to motivate industry partners to invest significant additional resources in the programme. BAU will essentially follow in the footsteps of previous FPs and support bio-based industries in a more punctual fashion through its wide range of projects.

BAU = || c-PPP + || i-PPP ++

Table 3: Linking technology and innovation challenges, specific objectives and the three options

Problems (See Section 2.5 Technology and innovation challenges) || Objectives (See Section 3.1.2 Specific objectives) || Options (See Section 4 Policy options)

BAU || c-PPP || i-PPP

Accessing sufficient sustainable feedstock || Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Developing efficient conversion processes for advanced biorefineries || Develop new bio-based materials || + || + || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Demonstrating and deploying advanced biorefineries || Demonstrate consumer products from bio-based chemicals and materials || = || + || ++

Validate at demo scale new chemical building blocks from European biomass || = || = || ++

Set up flagship biorefinery plants producing cost-competitive bio-based materials, chemicals and fuels from the PPP || − || − || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

Supporting demand-side actions for the uptake of bio-based products || Demonstrate consumer products from bio-based chemicals and materials || = || + || ++

Establish new bio-based value chains that integrate players along the whole value chain || = || + || ++

Create new cross-sector interconnections in bioeconomy clusters || = || = || ++

Support cooperation projects through cross-industry clusters || = || + || ++

++ Very good potential for progress || + Good potential for progress || = Neutral progress/status quo || − Negative progress

6.           Comparing the options and selecting the preferred option

6.1.        Comparison of the three options

The impact of the three options has been assessed and compared based on a number of input and output parameters under Section 5. The outcome of this assessment has been summarised in Table 4.

Table 4: Comparison of the three options

Criteria || BAU || c-PPP || i-PPP

Input parameters || Critical mass of resources and leverage effect on R&I || = || + || ++

Critical mass of participants and addressing fragmentation || = || + || ++

Efficiency of the governance structure || = || = || +

Coherence with member state and regional programmes || = || = || +

Innovation impacts || = || + || ++

Output parameters || Environmental impact || = || + || ++

Economic impact || = || + || ++

Social impact || = || + || ++

Addressing the technological and innovation challenges || = || + || ++

Note: Option BAU represents the baseline scenario.

6.2.        Justification of ratings based upon the assessment of impacts

i-PPP's strong position is based on its capacity to mobilise greater project resources due to the significant contribution by industry. It would provide a stable framework with long-term guarantees that is essential to mitigate risk and incite industry commitments, not only in terms of R&I resources but also for investments in expensive demonstration activities and infrastructure. The conditions offered by i-PPP have motivated industry to match the EU contribution of € 1 000 million for R&I activities and to leverage an additional indicative € 1 800 million for demonstration and flagship biorefinery plants.

i-PPP incites much higher industry participation rates than BAU or c-PPP. Its structure would help overcome fragmentation by facilitating cross-sectorial and pan-European linkages along whole value chains, which will particularly benefit SMEs. Such linkages are required to successfully implement new technologies and resolve innovation problems. The scope for taking technologies to high technology readiness levels is clearly greater under i-PPP than under the other two options due to strong industry commitment. i-PPP thus contributes much more effectively to bridging the innovation gap than BAU or c-PPP.

i-PPP also offers a moderate advantage in terms of efficiency of the governance structure. It will also have a positive influence on coherence with Member State and regional programmes by involving them in its Advisory Committee and consulting them on deployment.

Altogether, the advantages of i-PPP on the above-mentioned criteria give it a strong advantage in terms of addressing the technological and innovation challenges bio-based industries face and will result in a larger expected scale of technology deployment and shorter time to market. Since the positive environmental, economic and social impacts of bio-based industries strongly depend on their deployment, i-PPP will most significantly contribute to achieving the Europe 2020 objectives of smart, sustainable and inclusive growth. Impacts include the development of new cost-effective and efficient value chains that transform sustainably sourced biomass into value added bio-based products and biofuels through resource efficient and environmental processes, generating benefits for all involved market players and consumers.

6.3.        Preferred option

Based on the assessment above, option i-PPP offers a strong benefit over option c-PPP both on input and output parameters, which in turn have a certain advantage over option BAU. The establishment of a JTI on Bio-based Industries is thus the preferred option.

7.           Evaluation and Monitoring

7.1.        Operational monitoring

Progress and efficiency of the JTI operations will be closely monitored at different levels. The JTI will publish an annual activity report with the results of a monitoring based on a range of Key Performance Indicators (KPIs).

7.1.1.     KPIs on implementing the SIRA

The JTI's progress on implementing the objectives outlined under Section 3 and the SIRA at different points in time using three levels of quantitative and qualitative Key Performance Indicators:

· KPIs “Level 1” address the contribution to accomplishment of the general objectives of the JTI with a vision to 2020 and 2030 (outcome and impact). These objectives will however not be direct results of the PPP;

· KPIs “Level 2” aim at monitoring the progress of JTI, measuring how the specific operational objectives/results are met by 2020 (output and outcome), with milestones end of 2016 and 2018;

· KPIs “Level 3” allow monitoring the success of each project to be funded under the JTI. KPI level 3 will be defined by each project as ad-hoc KPIs attuned to KPI level 2.

Efficiency of the JTI

For the sake of monitoring progress and implementation of the JTI, the direct quantitative objectives could be used as KPIs Level 2 to monitor the progress of the programme. A limited selection from these objectives is made as key specific objectives. These objectives are directly linked to a set of KPIs, to be measured and monitored during the progress of the JTI, and to be used to steer the JTI activities accordingly.

The monitoring at this level will be a task of the programme management. Frequent monitoring gives insight into the efficiency of the programme. During the execution of the programme these KPIs will be evaluated on their effectiveness, in order to be able to change and complete the monitoring of the programme when needed.

These KPI's will be complemented with operational objectives on the JTI performance to be monitored continuously:

· Overall percentage % of industry investments (cash + in-kind) in the total JTI organisation and projects;

· A well balanced SME involvement in JTI organisation and projects, in line with Horizon 2020;

· Involvement of RTOs / Academia (i.e. targeted amount of finances flowing to RTOs / Academia);

· Balance between R&D, demonstration and supporting projects;

· Addressing the societal challenges (i.e. including some cross-cutting issues in demonstration projects);

· Follow-up on R&D results: % of JTI R&D results brought into demonstration projects;

· How well do the projects realised address the variety of topics in the SIRA in a balanced way (e.g. variety in feedstock, in products, in processes, etc.);

· A geographically balanced distribution of projects across member states (in all projects, and especially large demonstrators).

Effectiveness of the JTI

To get insight into the effectiveness of the programme, i.e. answering the question "are we doing the right things?", a monitoring for the KPIs at Level 1 has to be set-up. This is a task of the programme management that might be addressed by a Supporting Project within the JTI, that will run throughout the execution of the programme.

KPI level 3 will be defined by each project. This can be done by setting monitoring criteria in the call for proposal and/or by demanding the determination of KPIs in the Description of Work of the projects. The KPIs Level 3 have to be attuned to KPI level 2 and 1. Ensuring the KPIs Level 3 are well attuned is the responsibility of the programme management of the JTI. The project manager is responsible for monitoring the progress of the project and has to deliver data for KPIs Level 1 and 2 when needed.

In addition to the monitoring of the implementation of the objective, monitoring will be carried out on good governance of the PPP with regard to:

· Openness and transparency of procedures;

· Avoidance of conflicts of interest;

· Financial auditing.

7.1.2.     KPIs relating to Horizon 2020

As the JTI would be co-funded by Horizon 2020, its achievements will also be measured against the KPIs of the relevant parts of Horizon 2020, such as a) supply security of bio-based products, b) the development of competitive and low carbon supply systems, and the c) establishment of a resource-efficient and environmentally-friendly transport system.

The JTI performance will be quantitatively assessed against the following Horizon 2020 KPIs:

· Achievement of an overall investment of 3% of GDP in R&D activities in the EU;

· Achievement of, on average, 20 publications in high impact journals (and two patent applications per € 10 million funding[74]).

Throughout the lifetime of the JTI, the efficiency, effectiveness and throughput of operations will be monitored as follows:

· Efficiency, in terms of relationship input/output;

· Effectiveness, in terms of relationship input/outcome and impact;

· Throughput, in terms of relationship between output, outcome and impact.

7.2.        Monitoring progress of technology and markets

An additional set of quantitative and qualitative KPIs will be established to follow the progress of the JTI technologies as well as its impact on market development with a view to assess progress of the bio-based industries in the EU towards the general objectives.

Such KPIs aim to measure the level and speed of technology deployment in the EU, the EU's competitiveness in the bio-based industries and market adoption of bio-based products and biofuels. These indicators will be assessed against a baseline reflecting the state of affairs at the start of the JTI. Where possible, the impact of the JTI on these parameters will be assessed.

A number of suitable KPIs have already been proposed by industry in the SIRA, see Annex 3. A selection of the most appropriate KPIs as well as specific methods for measuring them will be further elaborated in the Multi-Annual Implementation Plan. Where appropriate, the agreement between the JTI and the industry group will include a requirement to provide specific data that are essential for measuring the KPIs. Certain tasks related to monitoring of KPIs may also be included in projects under the segment for "cross-cutting" actions.

The definition of KPIs for the JTI will take advantage of the important work already undertaken within the European Industrial Bioenergy Initiative (EIBI) and the SET plan information system with regard to the definition of KPIs.[75]

Finally, it will be examined how the Bioeconomy Observatory which is being established in the framework of the Commission's Bioeconomy strategy, can be involved in monitoring the KPIs.

7.3.        Performance evaluations of the JU to be conducted from outside the JTI

The Commission will organise evaluations of the JTI by calling on independent experts. These evaluations will cover the quality and efficiency of the JTI and its progress towards its objectives. A mid-term and an end-of-term evaluation (as customary with JTIs) will take place. The latter is based on the observation that the innovation impact of projects often only becomes visible several years after project completion and there is a lack of monitoring of these post-project innovation impacts.[76] This will allow to monitor progress towards 2030 targets as defined in the industry vision document and as discussed in this impact assessment.

7.4.        Monitoring the financial commitment by industry

The Commission will monitor on an annual basis the nature and the level of the industry contribution, in order to ensure that the R&I budget receives the necessary support both from the public and private partners. Corrective measures will be applied to ensure that the contributions from the partners are sufficient and appropriately balanced.

Annexes

              Annex 1 – Glossary

              Annex 2 – Bio-based industries – Market players and the "BIC"

              Annex 3 – Strategic Innovation and Research Agenda (SIRA)

              Annex 4 – Report on the European Commission's on-line public consultation

              Annex 5 - Current and future potential of biomass as a source of materials and energy

              Annex 6 – Definition of Technology Readiness Levels (TRLs)

              Annex 7– Overview of research and innovation at regional and national level

              Annex 8 – Example of a regional bioeconomy cluster moving up-scaling activities outside the EU

              Annex 9 – Detailed description of the specific objectives and link to wider policy context

              Annex 10 – Examples illustrating the potential socio-economic impact of a option i-PPP

              Annex 11 – Bibliography of the Impact Assessment

[1]               Note: A glossary providing a definition of bioeconomy and other technical terms is provided under Annex 1

[2]               COM(2012) 60

[3]               COM(2012) 582

[4]               COM(2012) 79

[5]               COM(2011) 627

[6]               DG REGIO (2012) Connecting Smart and Sustainable Growth through Smart Specialisation: A practical guide for ERDF managing authorities

[7]               COM(2012) 710

[8]               CDR1112-2012

[9]               COM(2011) 572

[10]             COM(2011) 809

[11]             Biobased for Growth – A public-private partnership on biobased industries http://www.biobasedeconomy.nl/wp-content/uploads/2012/07/Bio-Based-Industries-PPP-Vision-doc.pdf

[12]             DG RTD (2012) Roadmap for a Joint Technology Initiative in the field of Bio-based industries http://ec.europa.eu/governance/impact/planned_ia/docs/2013_rtd_007_biobased_industries_en.pdf

[13]             Public Consultation on "Bio-based industries, towards a public-private partnership under Horizon 2020?" http://ec.europa.eu/research/consultations/bio_based_h2020/consultation_en.htm

[14]             Public consultation “Bio-based economy for Europe: state of play and future potential” from 22 February to 2 May 2011 http://ec.europa.eu/research/consultations/bioeconomy/consultation_en.htm

[15]             SWD(2012) 11

[16]             Conference “Partnering for the Bioeconomy in European Regions” co-organised by DG RTD and the Committee of the Regions (CoR) on 12 October 2012 at the CoR, Brussels Belgium

[17]             Note: A glossary providing a definition of bio-based industries and other technical terms is provided under Annex 1

[18]             DG ENER (2011) Key Figures – Market Observatory for Energy –June 2011

[19]             COM(2011) 112

[20]             McKinsey (2009) White Biotech

[21]             OECD (2009) The bioeconomy to 2030: Designing a Policy Agenda

[22]             WWF (2009) Biotechnology could cut C02 sharply, help build green economy http://wwf.panda.org/?174201/Biotechnology-could-cut-C02-sharply-help-build-green-economy

[23]             Eurostat (2011) Climate change statistics http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Climate_change_statistics

[24]             Inman, M. (2013) The true cost of fossil fuels, Scientific American, April 2013

[25]             COM(2011) 244

[26]             WWF (2009) Industrial Biotechnology: More than green fuel in a dirty economy

[27]             OECD (2011) Industrial Biotechnology and Climate Change: Opportunities and Challenges

[28]             COM(2012) 595

[29]             Directive 2009/28/EC

[30]             Directive 2009/30/EC

[31]             OECD (2009) The bioeconomy to 2030: Designing a Policy Agenda

[32]             Festel, G. (2011) Presentation at the 4th Annual European Forum for Industrial Biotechnology & The Biobased Economy, Amsterdam, 20 October 2011

[33]             WEF (2010) The future of Industrial Biorefineries

[34]             OECD (2009) The bioeconomy to 2030: Designing a Policy Agenda

[35]             Star-COLIBRI (2011) Joint European Biorefinery Vision for 2030

[36]             COM(2012) 582

[37]             Bloomberg New Energy Finance (2010) Next-generation ethanol and biochemicals: What's in it for Europe

[38]             Bloomberg New Energy Finance (2010) Next-generation ethanol and biochemicals: What's in it for Europe

[39]             Wit and Faaij (2010) Biomass and Bioenergy

[40]             Bloomberg New Energy Finance (2010) Next-generation ethanol and biochemicals: What's in it for Europe

[41]             DG REGIO (2012) Smart Specialisation Guide on smart and sustainable growth

[42]             Contributed by M. Carus, member of the independent expert group of this Impact Assessment

[43]             Mantau, U. (2012) Wood Flows in Europe

[44]             Futuris (2012) Supporting the set-up of industrial demonstrators in Europe - Position paper

[45]             Burill & Company (2012) Biotech 2012: Innovating in the New Austerity; Burill & Company's 26th Annual Report on the Life Science Industry

[46]             USDA BioPreferred Program www.biopreferred.gov

[47]             Burill & Company (2012) Biotech 2012: Innovating in the New Austerity; Burill & Company's 26th Annual Report on the Life Science Industry

[48]             Note: The term ligno-cellulosic refers to the fact that this type of biomass contains cellulose and lignin as the main types of biomolecules. Cellulose – like starch - is made up of a chain of sugar molecules, but is more difficult to break down in its basic constituents – in part because it is embedded in a matrix of lignin which is difficult to remove.

[49]             DG ENTR (2009) Taking Bio-based from Promise to the Market – A report from the Ad-hoc Advisory Group for Bio-based Products in the framework of the European Commission’s Lead Market Initiative

[50]             WEF (2010) The Future of Industrial Biorefineries

[51]             Dalberg (2011) Biorefinery Feasibility Study

[52]             OECD (2009) The Bioeconomy to 2030: Designing a Policy Agenda

[53]             CEFIC (2012) The European chemical industry in worldwide perspective Facts and Figures 2012

[54]             DG RTD Expert Group (2010) Interim Evaluation of the Seventh Framework Programme

[55]             COM(2011) 572

[56]             DG RTD Expert Group (2010) Interim Evaluation of the Seventh Framework Programme

[57]             Pending of approval of Article 55 of the General Regulation of Structural Funds

[58]             Financing instruments: Horizon 2020 – grants, Structural Funds – Smart Specialisation Strategies, rural development, European Investment Bank (EIB) – loans, Risk Sharing Finance Facility (RSFF)

[59]             DG COMP Seminar on State Aids January 2013

[60]             COM(2012) 595

[61]             SEC(2011) 1427

[62]             http://eca.europa.eu/portal/pls/portal/docs/1/22482779.PDF

[63]             http://intranet-rtd.rtd.cec.eu.int/int_com/docs/CBA_JU.pdf

[64]             COM(2011) 808

[65]             ++ Very good potential for progress; + Good potential for progress; = Neutral progress/status quo;− Negative progress

[66]             DG RTD Expert Group (2011) First interim evaluation of the Fuel Cell and Hydrogen JU, Expert Group Report 24862

[67]             Hermann, Blok and Patel (2007) Producing Bio-based bulk chemicals. Using industrial biotechnology saves energy and combats climate change. Environ. Sci. Technol. 41, 7915-7921.

[68]             MEMO/12/989

[69]             ECOPEC/Novamont (2013) Biobased and Biodegradable Carrier Bags. Is competition between bioplastics and food a real issue? Abstract published in Bioplastics: A case study of bioeconomy in Italy

[70]             Note: Due to the fragmented and nascent nature of the bio-based industries sector only limited economic data is publicly available on bio-based products and biofuels. The Copenhagen Economics paper on "Biobased industries - The case for investment" (2013) explicitly highlight the difficulty in obtaining current data on the sector, in particular on costs, as these are often confidential and there is no experience from large scale projects.

[71]             OECD – The Bioeconomy to 2030 – Designing a Policy Agenda.

[72]             Dalberg (2011) Biorefinery Feasibility Study

[73]             BNEF (2010) Next generation ethanol and biochemicals, what's in it for Europe

[74]             Note: Since the JTI will put emphasis on pilot, demonstration and flagship activities, for which the valorisation of intellectual property is more important than its creation, the target of two patent applications per € 10 million invested may not be realistic.

[75]             European Industrial Bioenergy Initiative (EIBI) (2011) Boosting the contribution of Bioenergy to the EU climate and energy ambitions Implementation Plan 2010 - 2012

[76]             Biotechnologies panel report, Food Agriculture and Biotechnology 25/02/2011 prepared in the context of the impact assessment of Framework Programme Activities in FAFB.

Annex 1 – Glossary

Bioeconomy encompasses the sectors producing renewable biological resources (e.g. agriculture, forestry, aquaculture and fisheries) and the industries (e.g. pulp and paper, food, chemical and energy industry) converting these resources and waste streams into value added products, such as food, feed, bio-based products and bioenergy. The bioeconomy has a strong innovation potential due to the use of a wide range of sciences, enabling and industrial technologies.

Bio-based industries are industries, which use renewable biological resources for the production of innovative bio-based products and biofuels. Production usually takes place in biorefineries and often relies on bio-based processes.

Renewable biological resources or biomass means "the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste"[1].

Bio-based products are products that are wholly or partly derived from materials of biological origin, excluding materials embedded in geological formations and/or fossilised[2]. In the context of this Impact Assessment on a PPP on bio-based industries, the focus lies on innovative bio-based products, which refer to "non-food products derived from biomass [...]. Bio-based products may range from high-value added fine chemicals such as pharmaceuticals, cosmetics, food additives, etc., to high volume materials such as general bio-polymers or chemical feedstocks [i.e. building blocks]. The concept excludes traditional bio-based products, such as pulp and paper, and wood products, and biomass as an energy source"[3].

Building blocks are basic chemical components that are used for the production of more complex molecules in chemical production processes. They are usually produced at high volumes.

Biofuels are considered to be "liquid or gaseous fuels for transport produced from biomass"[4].

Biorefineries rely on a concept that is analogous to that of petro-chemical refinery processes. However, instead of producing a wide range of products and fuels from fossil resources, biorefineries aim to produce multiple bio-based products and fuels using renewable biological resources as a feedstock. The processes used in biorefineries are often bio-based. (See Box 2 for further explanations.)

Bio-based processes are processes based on the use of industrial biotechnology. They are usually more energy and water efficient, emit less greenhouse gases (GHG), and generate less toxic waste than conventional processes. They can both reduce production costs and improve environmental performance[5].

Feedstock refers to the raw material that is transformed into products by industrial processes. In the case of biorefineries, the feedstock is biomass.

Joint Technology Initiative (JTIs) are instruments for addressing technological challenges that are of key importance for the future competitiveness of the EU industry involved and that industry and markets would fail to address without a sizeable public intervention extended over a multi-annual timescale. Both the importance of the JTIs to the future competitiveness of the industry involved and the special nature of the public commitment requested (large-scale, multi-annual cash contribution) warrant an explicitly defined commitment from industrial members which goes beyond standard cost-sharing under H2020. Only such commitments are creating a true public-private partnership.

Joint Undertaking (JU) is often used to designate established JTIs. The term "Joint Undertaking" refers to the administrative structure of the JTI.

Annex 2 – Bio-based industries – Market players and the "BIC"

1.           bio-based industries and their value chains

Bio-based industries produce innovative bio-based products and biofuels from renewable biological resources. They are considered to be a cornerstone of the European Bioeconomy Strategy, as they offer new opportunities for economic growth and job creation, while contributing to moving towards a sustainable low-carbon economy.

A number of traditional European sectors, such as the chemical, textile, wood-based, pulp and paper and energy industries, have been using biomass for the production of traditional bio-based products, such as clothes, furniture, paper and energy. In the light of increasing competition from third countries with cheaper biomass resources, these industries have made use of their strong science and technology base to explore new sources of revenue, such as innovative, high added value bio-based products (e.g. biopolymers, biochemicals, etc) and biofuels. This and concerns about our dependence on fossil resources and their impact on climate change have given rise to the sector of “bio-based industries”.

Bio-based industries can be considered as a nascent industry sector, as its players include both traditional industries that are moving partially or entirely towards innovative bio-based products and biofuels and entirely new companies entirely dedicated to bio-based applications. Indeed, bio-based processes and products can replace processes and products from the petro-chemical industries; they are however also giving rise to entirely new products and thus new markets.

While European companies have been key players in developing bio-based applications world-wide, the further growth of bio-based industries in Europe is being hampered by lack of support for the development of their value chains, see Figure 1. Many of the key market players are traditionally not used to collaborating, yet the challenges they are facing cannot be addressed by a single company or sub-sector.

Note: Copenhagen Economics, based on Biorefining Alliance (2012b)

Figure 1: The value chain of bio-based industries[6]

Some of the key market players for the establishment of bio-based value chains are listed in Table 1. Due to the relatively novel nature of bio-based industries it is however difficult to dissociate clearly the percentage in annual turnover and employment associated to them today.

Table 1: Key market players for the establishment of value chains for bio-based industries[7]

Sector || Annual turnover (billion Euro) || Employment (thousand) || Data sources

Agriculture (crop output) Industrial material use: 6%[8] || 205 12.3 || 26,700 1,602 || COPA-COGECA and Eurostat (2012)

Forestry a wood industry || 668 || 470 || Eurostat and Star-Colibri (2012)

Manufacture of sugar || 15 || 41 || Eurostat (2012)

Manufacture of starch and starch products || 10 || 18 || Eurostat (2012)

Manufacture of vegetable and animal oils and fats || 42 || 66 || Eurostat (2012)

Pulp, paper and paper products || 170 || 690 || Eurostat (2012)

Woodworking industry || 283 || 2,772 || Eurostat (2012)

Chemicals and  plastics (total) Bio-based: 10%[9] || 642 64 || 1190 119 || CEFIC and Eurostat (2012)

Enzymes || 0.8 || 5 || Based on input from Amfep, Novozymes, DuPont/Genencor, DSM (2010)

Biofuels || 42.6 || 221 || Global Renewable Fuels Association (2012)

Manufacture of textiles and textile products (50% bio-based) || 97 || 1,199 || Eurostat (2012)

The following sections provide an overview over the main industries and sectors associated to bio-based industries. The value chain for bio-based industries has been roughly split into three steps: 1) Biomass production, collection and transport; 2) Processing industries; and 3) End users/consumer markets. It should be noted that the separation between these steps is often not so clear and that market players are often involved in more than one of them.

For a more comprehensive discussion of challenges, opportunities and bottlenecks for the different industries and sectors also see the "Joint European Biorefinery Vision for 2030" that was prepared by the FP7 project Star-COLIBRI[10].

1.1.        Biomass production, collection and transport

Europe has highly developed agriculture and forestry sectors. In 2008 the total land cover of EU 27 was around 420 million hectares with approximately 43% dedicated to agricultural production and 40% to forestry. These sectors dispose of significant unused or underexploited biomass that could be transformed by bio-based industries, such as residues from agricultural and forestry activities, or industrial crops.

However, the role of primary production sectors does not have to be limited to that of biomass supplier. Unlike the well-established supply chains for the food sector, the supply chains for bio-based industries are still at an early development stage. By investing in the development of these supply chains and the deployment of biorefineries, agricultural cooperatives have the opportunity to become involved at a higher level in the value chains, allowing them to benefit directly from the added value and jobs these will generate. Developing value chains for bio-based industries can thus provide a win-win situation for primary production and processing industries.

1.1.1.     Agriculture

The EU agriculture is one of the biggest suppliers to global agricultural markets. It has a share of 18% in world food exports, worth € 76 billion. In production values, it agriculture provides more than 40% of total OECD food production. There are about 14 million farmers in the EU and a further 4 million people working in the food sector[11]. Together, the farming and food sectors provide about 7% of all jobs and generate 6% of European gross domestic product.

Farmers and agri-cooperatives are typically organised in national trade associations, which again are grouped at European level in the Committee of Professional Agricultural Organisations COPA and the General Confederation of Agricultural Cooperatives COGECA, which work closely together under the umbrella of COPA-COGECA.

1.1.2.     Forestry and wood industry

Over the past 20 years, Europe has seen a net increase in forest areas, gaining 16.9 million hectares in forest land since 1990 and the highest levels of timber since recoding began[12]. From the 620 million cubic meters of net annual increment in 2010, only about 60% were harvested.

It should be noted that the amount of currently unused wood growth that can be economically harvested is limited by diminishing wood dimensions and quality, as well as logistical accessibility. Large portions of any significant increased wood harvesting, including forest and wood industry residues, are likely to be attracted to the highly-subsidised bioenergy market for heating and electricity generation in the foreseeable future.

Forest owners and forestry and wood industries are organised at European level in the Confederation of European Forest Owners (CEPF) and the European State Forest Association (EUSTAFOR).

1.1.3.     Challenges for biomass production

Primary production sectors are facing several challenges, ranging from[13]:

· Providing a reliable supply of biomass in sufficient quantity and quality, this includes considerations around "sustainable intensification", efficient land use, and increasing the availability of forestry biomass;

· Increasing the efficiency of supply chains, e.g. reducing losses and waste, putting in place closed-looped systems;

· Anticipating and adapting to climate change;

· Developing sustainability criteria for the sourcing of biomass;

· Communicating with the general public to improve the image of bio-based industries.

1.2.        Processing industries

Europe has a strong technology base for the transformation of biomass into high value added bio-based products and biofuels. A comparison with the US and Asia shows that the EU is leading in research and innovation in several areas of high relevance for bio-based industries, including industrial biotechnology, enzyme technology, fuel from waste, waste management and renewable energy[14]. Europe has a leading share in the total number of patent applications in the area of industrial biotechnology filed since 2000[15] and is home to the world's leading enzyme producers[16].

While the market share of bio-based products and biofuels in the EU is still relatively low and confined to specific niche markets, Europe is in a good position to develop the potential of bio-based industries due to its strong (petro-)chemical and pulp and paper industries. In view of an increasingly strong global competition, further investments in research, innovation and deployment of bio-based processes and products will be needed to maintain and expand this position[17]. This includes the development of policy instruments, such as standards and labels, supporting the uptake of bio-based products in consumer markets and public procurement.

1.2.1.     Forest-based industries

The wood working industry is made up of about 365 000 SMEs, including sawmilling (15%), wood construction products (37%) and furniture manufacture (48%)[18]. European forest-based industries (including pulp and paper, wood industries) are an important part of the European economy. Many of the top 100 players in the global forest, paper and packaging industry world-wide are European, such as Stora Enso, UPM-Kymmene, SCA, Smurfit Kappa, Mondi Group, Metsä Group, Sappi, Norske Skog, Holmen, Södra, BillerudKorsnäs, ENCE[19].

Forest-based industries are organised in several trade associations at European level, namely the European Confederation of Woodworking Industries (CEI-Bois) and the Confederation of European Paper Industries (CEPI).

1.2.2.     Sugar and starch industries

The EU is the world’s leading producer of beet sugar. It accounts for about 50% of the total beet sugar production, which about 20% of the world’s sugar production. In view of increasing competition from sugar producers from other parts of the world, the European sugar industry has been diversifying their activities, by providing feedstock for the production of bioethanol and other fermentation processes for many years. Companies active in this area include Nordzucker, Südzucker, Tereos, Cristal Union and Suiker Unie.

The European starch industry produced more than 600 products for the use in a vast range of food, non-food and feed applications, going from native and modified starches to liquid and solid sweeteners. About 70 starch production facilities across Europe produce close to 10 million tonnes of starch every year from EU-grown wheat, maize and potatoes. The EU consumption of starch and starch derivatives reached almost 9 million tonnes in 2011. Changes in subsidies allocated to starch sector, such as the potato starch industry, are motivating many players to explore new sources of income, such as bio-based products. Companies active in this area include Cargill, Roquette, Vivecia and Tereos-Syral. At European sector is represented mainly by the European Starch Industry Association AAF.

1.2.3.     Vegetable and animal oil and fat processing industries/Oleochemical industry

More than 11 million hectares are dedicated to cultivating oilseeds (e.g. rapeseed, sunflower seed, soybeans and linseed) in the EU, which are used for food, feed, fuel and industrial purposes. Significant amounts of animal fats are generated by the food industry, mainly by the meat industry. Vegetable oils and animal fats are used in the food industry and for the production biodiesel and in the oleochemical industry, ranging from detergents, lubricants to cosmetics. The worldwide consumption of basic oleochemicals is estimated at 3.5 million tonnes[20], of which more than a third is produced in Western Europe.

European key players in this sector include many (petro-)chemical companies, such as Akzo Nobel, BASF, Evonik, Clariant, Procter and Gamble Chemicals, Dow Europe, Shell and Danisco. They are represented at European level by trade associations, such as European Oleochemicals and Allied Products Group (APAG) and the European Chemical Industry Council (CEFIC).

1.2.4.     Biochemicals and materials producers

Biochemicals and materials, such as lactic acid, acetic acid and biopolymers, are a growing sector in Europe driven by an increasing demand for sustainable solutions. Bioplastics are growing at an annual rate of about 20%, as they are being used in an increasing number of markets, ranging from agriculture, automotive, packaging to toys and textiles[21].

Most of the key players are existing chemical companies that are diversifying their activities towards bio-based applications. The chemical industry in 2010 generated a turnover of € 491 billion, a significant positive trade balance and represented direct employment of 1.2 million people (3.4 million jobs including indirect employment)[22]. They include companies such as BASF, Novamont, Arkema, DuPont, Metabolix, Limagrain, BioAmber and Braskem. These are grouped in trade associations at European level, such as European Bioplastics or European Renewable Resources and Materials Association (ERRMA).

1.2.5.     Enzymes industry

About 64% of all companies involved in biochemical research and production of enzymes are located in the EU, making Europe a world-leader in this area[23]. The use of industrial biotechnology, i.e. of enzymes and microorganisms, has lowered the costs of biochemical production, establishing as an interesting production method of its own in addition to being a co-production. Key players in the enzyme business include Novozymes, Dupont Genencor and DSM. They are represented at European level by the European Biotechnology Association for Bio-industries EuropaBio.

1.2.6.     Biofuels industry

The "first generation" or "conventional" biofuels sector in Europe has been growing well as a result of the EU's renewable energy targets in transport ("biofuel targets") of 10% by 2020. In 2012, industry was already producing sufficient biofuels to meet half of the target. In 2010, the production volume of the biodiesel industry was double that of the bioethanol industry, due to the prevalence of oilseed rape as an industrial crop in Europe. It is expected that the two sub-sectors will produce comparable amounts by 2020. Market players include companies, such as Roquette, Cargill, Tereos, Südzucker, British Sugar, Abengoa, Inbicon, Neste Oil, Ineos, etc, many of which are issued from the sugar, starch, vegetable oil or animal fats industries. They are grouped in the European trade associations European Renewable Ethanol (ePURE) and European Biodiesel Board (EBB).

The on-going revision of the EU biofuel targets in the light of the controversy around food security and indirect land use change (ILUC) intends to cap conventional biofuels at their current level and to promote "second generation" or "advanced" biofuels, which are produced from non-edible renewable biological resources, such as agricultural or forestry residues and bio-waste. The "advanced" biofuel sector is not very developed yet, as production of biofuels from these feedstocks is currently taking place at a small scale in pilot and demonstration plants[24]. It is likely that the players from the "conventional" biofuels sector will gradually move to "advanced" biofuels.

1.2.7.     Challenges for processing industries

Processing industries are facing several challenges, ranging from[25]:

· Maintaining the production output from existing facilities, while making the transition to bio-based applications;

· Securing sufficient sustainable feedstock in Europe (e.g. agricultural and forestry residues) and remaining competitive in volatile raw material markets;

· Exploring the use of wastes, by-products and recycled materials as a feedstock source;

· Improving sustainability (e.g. reducing greenhouse gas emissions (GHG));

· Optimising resource efficiency of processes (e.g. for energy, water, raw material use);

· Developing cascading approaches that create new synergies between industries to use resources in a "smart" way;

· Reducing costs of production processes, in particular balancing economic return with minimal environmental impact;

· Developing sustainability criteria for the sourcing and processing of biomass;

· Communicating with the general public to improve the image of bio-based industries.

1.3.        End users/consumer markets

Bio-based products can range from high-value added fine chemicals, such as pharmaceuticals, cosmetics, food additives, etc., to high volume materials such as general bio-polymers or chemical feedstocks (i.e. building blocks).

While some processing industries may develop consumer products themselves, others may sell their bio-based products to companies that are specialised in developing "final products" that can be commercialised to consumers. Thus, biomaterials can be used for textiles and packaging, bio-based ingredients in cosmetics or foods, etc. These companies are often also established consumer brands, such as Procter and Gamble and Unilever. Since they constitute the link to consumer markets, they are also considered to be "end users".

In the case of biofuels, end users can range from transport companies to normal consumers. The development of high added value biofuels, such as jet fuels, could also attract airlines.

In view of broader economic and social sustainability issues and of implications for consumers, the Commission is currently studying biofuels from a consumer perspective as a part of a broader study on the functioning of the fuel markets. The study is expected to generate recommendations on improving and harmonising fuel labelling at the pump across Member States[26].

1.3.1.     Challenges for end users

· Developing new and sustainable bio-based products and biofuels that either replace existing fossil-based products or open entirely new markets;

· Developing sustainability criteria, certificates, standards and labels for bio-based products in order to ensure their sustainability and communicate their environmental benefits.

· Communicating with the general public to improve the image of bio-based industries.

2.           The Biobased Industries Consortium (BIC)

The industry group backing the proposal for a Bio-based PPP represents a wide range of stakeholders along the entire bio-based industry value chain: the agro and agri-food sector, the sugar and starch industries, the forestry and pulp and paper sector, materials and chemical industries, bioenergy and biofuel sector, the biotechnology industry and other technology providers. Figure 2 shows the role of different players along the five value chains to be established as a basis for building competitive bio-based industries in Europe.

The group has organised itself in a new legal entity called the “Biobased Industries Consortium” (BIC) end of 2012, which would be the private partner in a possible Bio-based PPP. All sectors are represented in the BIC Board, including SMEs or SME clusters. BIC is also supported by major industry trade associations (e.g. EuropaBio, CEPI, COPA-COGECA, European Bioplastics, CEFIC) and the European Technology Platforms (e.g. Forestry ETP, SusChem ETP), who can become associate members. The BIC membership is open to any relevant industry parties, several companies from the different market players are negotiating their participation in the BIC.

The Impact Assessment discusses the establishment of five value chains based on the main feedstock available in Europe. Figure 2 indicates how the different members of BIC are positioned along these value chains.

Note: Primary Conversion: refining of biomass into its valuable components; Secondary conversion: Valorisation of intermediates and products.

Figure 2: BIC members and their position along the value chain

[1]               Directive 2003/30/EC

[2]               CEN - Report on Mandate M/429

[3]               DG ENTR (2009) Taking Bio-based from Promise to the Market – A report from the Ad-hoc Advisory Group for Bio-based Products in the framework of the European Commission’s Lead Market Initiative

[4]               Directive 2003/30/EC

[5]               COM(2012) 582

[6]               Copenhagen Economics (2013) Biobased industries - The case for investment

[7]               Table compiled by CleverConsult and Nova Institute

[8]               Nova Institute (2013)

[9]               Estimation based on:

· USDA (2008) – US Biobased Products Market Potential and Projections through 2025. See: http://www.usda.gov/oce/reports/energy/BiobasedReport2008.pdf 

· Peter J. Nieuwenhuizen, David Lyon, Julia Laukkonen and Murray Hartley (2009) - A rose in the bud? Anticipating opportunities in industrial biotechnology. Prism/2/2009

· G. Festel (2010) - Industry Structure and Business Models for Industrial Biotechnology. Discussion paper at the OECD workshop: Outlook for Industrial Biotechnology (Vienna 13-15 January 2010)

· McKinsey (2009) – Presentation of J. Riese at DSM. See http://www.dsm.com/en_US/downloads/sustainability/white_biotech_mckinsey_feb_2009.pdf

[10]             Star Colibri (2011) Joint European Biorefinery Vision for 2030

[11]             DG AGRI (2012) The Common Agricultural Policy – A partnership between Europe and farmers

[12]             FAO (2011) State of European forests

[13]             Star Colibri (2011) Joint European Biorefinery Vision for 2030

[14]             SEC(2011) 1427

[15]             EPO (2012) Analysis of EPO data on industrial biotechnology patents provided by Novozymes

[16]             Star-Colibri (2011) Joint European Biorefinery Vision for 2030

[17]             COM(2007) 860

[18]             Forest-Based Platform (2012) Horizons – Vision 2030 for the European Forest-based Sector

[19]             PriceWaterHouseCooper (2012) Global Forest, Paper & Packaging Industry Survey 2012 edition – survey of 2011 results

[20]             APAG (2013) - http://www.apag.org/oleo/index.htm

[21]             European Bioplastics (2013) - http://en.european-bioplastics.org/market/

[22]             CEFIC (2011) Facts and figures 2011

[23]             Star Colibri (2011) Joint European Biorefinery Vision for 2030

[24]             Copenhagen Economics (2013) Biobased industries - The case for investment

[25]             Star Colibri (2011) Joint European Biorefinery Vision for 2030

[26]             Note: The study (to be published by end of 2013) explores whether consumers are able to make informed choices by looking into consumer understanding and the transparency of information. The study also tackles the issues of availability of different fuels and retailers, and retail prices.

BRIDGE Public Private Partnership

Biobased and Renewable Industries for Development and Growth in Europe

Strategic Innovation and Research Agenda (SIRA)

Disclaimer:

This document reflects the ambitions and objectives of the members of the Biobased Industries Consortium (BIC) in March 2013, and is the basis for road mapping towards the BRIDGE calls for proposals. The BRIDGE SIRA will frequently be adjusted based on technology and market developments, results obtained and ambitions of new members entering the BIC.

1.           Executive Summary

The Biobased Industry Vision

The industry vision is that of a competitive, innovative and sustainable Europe leading the transition towards a post-petroleum society while decoupling economic growth from resource depletion and environmental impact.

In this vision, the Biobased Industries will optimize land use and food security through a sustainable, resource-efficient and largely waste-free utilisation of Europe’s renewable raw materials for industrial processing into a wide array of biobased products:

– Advanced transportation fuels[1]

– Chemicals

– Materials

– Food ingredients and feed

– Energy

In doing so, the Biobased Industry will play an important role in spurring sustainable growth and boosting Europe’s competitiveness by re-industrialising and revitalising rural areas, thus providing tens of thousands of high-skilled research, development and production jobs over the next decade.

How to realise this Vision?

At the heart of this vision, the development of biobased value chains will be accelerated. New biomass supply chains will be developed to feed new integrated biorefineries while existing biorefineries will be brought to a new level: to secure feedstock availability and flexibility throughout the year, with multiple inputs and multiple outputs. These developments will gradually complement and replace product streams from fossil oil and provide innovative new products and solutions and markets. The Biobased Industries play a critical role in the realisation of this vision and are already making significant investments in biorefineries.

However, critical technological, political and market challenges remain before full-scale commercialisation of the innovations can succeed and innovative solutions are brought to the market. Another fundamental challenge is the innovation “Valley of Death”, from research to market. These challenges cannot be overcome by individual companies or the industry alone.

The competitiveness will be increased by reversing the currently seen trend of significant biobased economy investments in regions outside Europe where framework conditions appear to be more attractive. A long term research and innovation agenda jointly funded by public and private players can help address this challenge. This will be done by developing new value chains, de-risking investment in demonstration projects of innovative processes and in building first-of-its-kind flagship plants[2].

BRIDGE Public Private Partnership (PPP)

The PPP on Biobased Industries (BRIDGE PPP) is an integrated and fundamental tool under Horizon 2020 to realise the biobased industry vision. BRIDGE focuses on developing EU-based value chains and accelerating the transition to advanced feedstock for biorefineries: It will focus on:

· Building new value chains based on the development of sustainable biomass collection and supply systems with increased productivity, and improved utilisation of biomass feedstock (incl. co- and by-products), while unlocking utilisation and valorisation of waste and lignocellulosic biomass;

· Bringing existing value chains to new levels, through optimised uses of feedstock and industrial side-streams, and offering innovative added value products to the market, thus creating a market pull and reinforcing the competitiveness of EU agriculture and forest based industries;

· Bringing technology to maturity through research and innovation, and through upgrading and building demonstration and flagship biorefineries that will process the biomass into a range of innovative biobased products;

BRIDGE fully recognises that biomass is not an unlimited resource. It must be utilised intelligently, to ensure that additional uses of biomass do not compromise the ability to produce food in sufficient quality and quantity. By doing so, the PPP will ensure availability of a sustainable and secure supply of biomass both for food and feed applications as well as for chemicals, materials, fuels and energy.

To enable supply of additional and sufficient biomass for a biobased economy, it is critical to increase the productivity and output of biomass from European forest and agricultural land in a sustainable way and to unlock the potential of the residues and side-streams and waste. BRIDGE focuses on optimising utilisation of existing feedstock (forest and agricultural biomass) and the development of new feedstock supply chains (e.g. forest residues, agricultural lignocellulosic residues or dedicated crops), as well as industrial side streams and organic municipal waste. Providing new markets for biomass producers strengthens rural economies, and allows further development and investment in the production system. Albeit essential for the future of the biobased economy, the advanced feedstock supplies are still underdeveloped and require significant infrastructure for mobilization and logistics. The goal of BRIDGE is to address those issues by 2020 through research, demonstration of technologies and flagship plants to build efficient and cost competitive supply chains and transformation units.

Cooperation towards new biobased value chains and markets

All developments will occur in parallel and will lead to technology and competence transfer between sectors. In the short term existing value chains will drive the product development, in particular for added value products. Without biobased product market development at an early stage, there will be no market pull in Europe for the biobased economy and thus significant delay in its deployment. As new supply chains develop to 2020 and become economically viable, the biobased economy feedstock will increasingly come from lignocellulosic supply.

The PPP builds upon the strong agricultural, agro-food, forestry and pulp & paper sectors and world-leading companies in the plant breeding, biotechnology, chemistry, energy and bioprocess engineering. It also capitalizes on the vast amount of R&D investments and results, both optimising and utilizing Europe's existing pilot and demonstration facilities, and realising the required leap forward towards advanced technologies utilizing waste and lignocellulosic feedstock. But not least, BRIDGE will leverage the combined and complementary knowledge and skills of academia, research organisations, SMEs[3] and larger corporations to achieve its innovation objectives.

The Strategic Innovation and Research Agenda (SIRA)

The BRIDGE multi-annual SIRA translates the PPP ambitions into a coherent set of actions that will deliver tangible and increasingly ambitious results by 2020 and by 2030.

The SIRA includes a balanced combination of:

· Value chain demonstration projects aiming towards integration and deployment of technologies and R&D results into actual value chains and bringing technology close to commercial scale through upscaling in demonstration activities and flagship plants;

· R&D projects focused on filling the gaps in technological innovations: dedicated projects on the development of specific technologies and concepts needed to realise the value chains, and proving the principles in pilot installations;

· Supporting projects, addressing the cross-sectoral challenges and supporting the value chains to become reality.

The projects of the SIRA will be developed around 5 value chains, where specific deliverables will be demonstrated, ultimately leading to flagship projects.

· From lignocellulosic feedstock to advanced biofuels, biobased chemicals and biomaterials: realising the feedstock and technology base for the next generation of fuels, chemicals and materials

· The next generation forest-based value chains: utilisation of the full potential of forestry biomass by improved mobilisation and realisation of new added value products and markets

· The next generation agro-based value chains: realising the highest sustainability and added value by improved agricultural production and new added value products and markets

· Emergence of new value chains from (organic) waste: From waste problems to economic opportunities by realising sustainable technologies to convert waste into valuable products.

· The integrated energy, pulp and chemicals biorefineries: Realising sustainable bio-energy production, by backwards integration with biorefinery operations isolating higher added value components.

To have competitive biobased products in the market in 2020, each step of the value chains needs to be competitive: the feedstock supply, the processing, as well as the product(s) and market (both in term of price and environmental performance). BRIDGE focuses on developing, optimizing and demonstrating this competitiveness throughout the five value chains.

2.           The long-term strategic objectives for the Biobased Economy

BRIDGE activities reflect clearly the ambitions of industrial partners to contribute to a sustainable society on the longer term. The PPP will trigger further developments leading to long-term benefits: new value chains and products initiated and demonstrated by BRIDGE will come into full deployment, biorefineries will be upgraded and new flagships will be built, new biobased developments will be triggered by the PPP activities, and dedicated policy measures will be put in place.

BRIDGE will achieve concrete and significant results by 2020, yet the greatest leverage effect and commercial deployment will be reached in the period from 2020 to 2030. Thus the strategic objectives of the Biobased Economy that will be stimulated and triggered by the PPP are evaluated over two periods[4].

Table 1. OVERALL STRATEGIC OBJECTIVES FOR 2020 and 2030

· The PPP activities will help to guarantee a secure and sustainable supply of lignocellulosic biomass (incl. waste) for European biorefineries through the development of integrated and sustainable agricultural and forestry value chains; · There is a potential to better valorise agriculture land that currently is no longer under production or is currently not under optimal use. BRIDGE aims to contribute to put 15% of this underutilized land back into production or at least be better utilized in 2020 (35% by 2030); · Current EU biomass utilisation for food, feed and materials is 1100 Mton. The amount of biomass used in the EU for energy and material uses is estimated to amount to 500 Mton[5]. The PPP results will contribute to achieve 10% increase in biomass supply in Europe by 2020 (20% by 2030) by increasing productivity and mobilization in sustainable manner while making best use of innovations in agriculture and forestry practices; · Current unused by-products and wastes from various biobased sources (agriculture, forestry, waste water treatment, sludge, organic household waste, yard waste, food processing waste, debarking waste) amount to a total of 2.8 bn tons/year in the EU[6]. BRIDGE activities will stimulate the mobilisation and utilisation of these potential resources to be increased to 15% of the total amount in 2020 (25 % in 2030). · BRIDGE results will contribute to maintain and further develop a competitive and knowledge intensive rural economy in Europe based on biorefineries resulting in new, higher and more diversified revenues to farmers and cooperatives and creating up to 400.000 new skilled jobs in 2020 (700.000 by 2030), of which more than 80% will be in rural and today underdeveloped areas; · The biomass available will be fully utilized and cycles will be closed. The PPP will contribute to protein isolation and valorisation from additional biomass processing, that will result in 15% reduced import of protein (e.g. soy) for feed in Europe in 2020 (50% by 2030). Currently 2300 Mton of phosphate and 2700 Mton of potash are consumed in the EU, most of which (estimated 90 %) are imported in the form of rock materials or processed rock (non-renewable resources) into the EU. Optimisation of soil fertility programmes including recovery and use of phosphate and potash, as triggered by the PPP activities, will lead to a 10% reduced import of those components for fertilizers applied to feedstock production (25% by 2030); · BRIDGE will contribute to and trigger industrial deployment of biobased chemicals, biomaterials and advanced biofuels, so that o 20% of the chemicals and materials production in Europe will be biobased by 2020 (30% to 2030); this is compared to the current situation 10% of chemicals and materials being biobased. o By 2020 at least 2%[7] of Europe’s transport energy demand will be met by sustainable advanced biofuels (25% in 2030, together with an overall 50% improved road transport system efficiency[8]); This is compared to the current situation of no advanced biofuels in European fuel mix. o At least 5 first-of-its-kind flagship plants will be realised to optimise technology for biomass conversion and ensure price-competitiveness for a second wave of commercial production to kick-in from 2017. · BRIDGE will realise a new generation of biobased materials and composites, allowing the production of better-performing components for application in several industries. With this the PPP contributes to the ambition that in 2020, the market supplied by biobased polymers and composites at comparable quality-price ratio compared to the fossil alternatives will be 5 times higher than today (factor 10 in 2030); increased consumer acceptance, concerted policy and labelling, awareness of biobased products as well as recycling and reuse will have an important contribution to the improved market penetration. · Through its combined efforts the PPP will have a significant contribution to the European objective of achieving 20% reduction in greenhouse gas emissions in 2020 (compared to 1990 levels). · As a consequence of following the openness and excellence principles, BRIDGE intends to actively involve academia, research organisations, and SMEs[9] such that at least 15% of the Horizon 2020 funds allocated through the PPP goes to these actors. It is expected that significant additional industry funding will go to academia, RTOs and SMEs through their participation in industry-driven demonstration activities

3.           The objectives and activities of BRIDGE PPP

The long-term strategic objectives will be achieved by the triggering of and leverage effects on the BRIDGE direct deliverables. This Chapter describes the BRIDGE activities, as well as the direct deliverables (the Key Performance Indicators - KPIs), which will be achieved if the right framework conditions can be developed.

Table 2. BRIDGE direct deliverables 2020

· 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors (see figure 3); · At least 10 new biobased value chains (new products and feedstock); · Realising a total industrial investment of 2.8 bn Euro by the PPP partners in research, development and innovation via R&D projects, realised demonstration projects and flagship plants: both by building of new operations and upgrading existing and abandoned industrial sites to be converted into biorefinery operations (reindustrialisation). · More than 200 cooperation projects through cross-industry clusters · The new biobased products resulting from BRIDGE will on average have an at least 50% reduction on green house gas emission compared to their fossil alternatives. · 10 new regional biorefinery clusters raised: biorefinery demonstrations, with regional biomass supply · 10 conversion of existing and unused facilities into biorefineries · At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

BRIDGE aims at accelerating the building of biobased value chains, starting from sustainable feedstock production and mobilization towards the implementation and use of biobased materials and products (see Figure 1).

3.1.        BRIDGE activities in the period 2014-2020

A sustainable growth of the biobased economy requires a dedicated and balanced approach addressing specific common research and innovation challenges, while integrating and demonstrating cooperation between stakeholders over different disciplines and value chains. These key challenges have been grouped into three types of projects, as follows:

· Value chain demonstration projects aiming towards integration and deployment of technologies and R&D results into actual value chains and bringing technology close to commercial scale through upscaling in demonstration activities and flagship projects;

· R&D projects focused on filling the gaps in technological innovations: dedicated projects on the development of specific technologies and concepts needed to realise the value chains, and proving the principles in pilot installations;

· Supporting projects, addressing the cross-cutting challenges and supporting the value chains to become reality.

Projects in BRIDGE, especially the value chain demonstration and their resulting flagship projects, will consider the whole value chain. To have competitive biobased products in the market in 2020, each step of the value chain needs to be competitive: the feedstock supply, the processing and the product (both in term of price and performances).

Further details about the different types of projects are presented in the following chapters.

Figure 2: Overview of BRIDGE projects

Table 3. Definitions of the innovation and research phases[10]

3.1.1.     Value Chain demonstration projects - addressing the integration challenge

The core of BRIDGE is the realisation of new untraditional partnerships. This aims for accelerating the building of biobased value chains by the cooperation throughout and across value chains. Value chains will be well integrated to existing infrastructure, demonstrated at suitable level and fully aligned with market demand and sustainable policies. Addressing these challenges through demonstration activities will prove the viability of the new value chains thus contributing to overcome investments barriers.

The demonstration activities in the value chain projects of BRIDGE aim to provide the final proof of technological and economic feasibility of a process or product manufacturing and the necessary supply chain before moving into a commercial phase. A demonstration activity allows, for instance, to scale-up a process to industrial or near-industrial scale. Each step of the process has previously been tested and validated individually on a pilot scale. The demonstration activities focus on proving how different sub-processes can be combined using equipment available at industrial scale. Research activities within the demonstration activities focus therefore mainly on optimization of flows and cost reduction. Those research activities could be for instance testing operational conditions that have been identified before at research and pilot scale to optimize productivity, or to reduce costs. The monitoring, data collection and analysis is critical during this phase. A demonstration also aims at fine tuning the process to ensure a reproducible and constant quality of the product(s).

Wherever possible the value chain demonstration projects will make use of the existing infrastructure and available demonstration facilities for the Biobased Economy (available at the PPP partners - industry and SMEs, or open shared facilities[11]). For some of the new innovative value chains new and near-industrial scale facilities will be required. The developments in the demonstrated value chains will lead to investments in flagship plants.

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (See 3.1.2).

Moreover, demonstrating the value chains will require non-technological, cross-cutting challenges to be solved. This will lead to calls for specific Supporting Projects on cross-cutting issues (See 3.1.3). The value chains demonstration projects will lead to investments in full-scale Flagship projects. Each value chain area will lead to at least one flagship project. These flagships projects will cover the full value chain. They will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures.

Five main innovative biobased value chains have been identified, in which demonstration projects will be carried out. These value chains are built on the ambitions of the existing sectors / industries (the 'pillars') that all have biobased ambitions, though from different perspectives. The current agro- and forest biobased sectors want to strengthen their competitiveness by increasing their product portfolio and maximise the use of scraps and residues. The waste-sector aims to achieve a valuable and sustainable solution for converting waste-streams into resources. And the chemicals, materials, fuels and energy sector have ambitions to transform their current fossil-based products into new sustainable biobased products with low environmental footprint aiming for consolidation of existing markets and creation of new ones.

BRIDGE will thus strengthen the sustainability and competitiveness of all biobased industries, by strengthening the innovation pillars. This increased innovation capacity will facilitate and accelerate the emergence of new sustainable value chains building on an innovative and economically strong infrastructure: effectively building the bridges towards new value chains (Figure 3).

Figure 3: Bridging between the pillars – towards the Biobased Economy

Though starting from different feedstock and/or ambitions, all value chains aim to improve the biomass supply chains and to cooperate for the development and demonstration of new biobased chemicals, fuels, materials and products. Therefore common ambitions are set on achieving the supply chain and product deliverables:

Table 4. BRIDGE direct deliverables 2020 - Biomass Supply

· 5 to 10 new/innovative species varieties · 10% higher mobilisation of forest biomass by innovative technologies · 10% higher biomass yield by combining innovative cultivation methods with the regional most suitable crop rotation · Higher efficiency of fertilizer use (focus on N, P, K) by 15% increase of harvested biomass per unit of fertilizer · 15% increase in the water use efficiency by adapted crop rotations and management practices

Table 5. BRIDGE direct deliverables 2020 - Biobased Products

· 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030 · 10 functionalized chemicals and materials developed, with demonstration of their economic feasibility, lower environmental footprint and societal benefits · 5 successfully demonstrated concepts for valorisation of proteins from plant residues · 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions) · 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials · 10 new biodegradable, compostable or recyclable bio based products and materials for short life application

Value chain 1

From lignocellulosic feedstock to advanced biofuels, biobased chemicals and biomaterials: realising the feedstock and technology base for the next generation of fuels, chemicals and materials.

The projects within this value chain aim at realising sustainable and efficient cascaded value chains at scale to mobilise and convert lignocellulosic feedstock into cost-competitive advanced biofuels[12] and biobased chemicals and materials. This includes new/improved profitable lignocellulosic biomass sources with a higher efficiency in the production (fertilizer, water use, logistics) and/or improved digestibility in biorefineries. This will reduce industrial waste streams and improve the environmental impact, contributing to reducing the pressure on natural resources, the European dependency on imports and increasing the development of rural livelihood. Moreover, it focuses on creating a financial incentive and better revenues for farmers and forest owners to produce and mobilise more biomass at a competitive price.

This value chain furthermore includes the demonstration of advanced technologies to hydrolyze and convert lignocellulosics in a sustainable and economic way into valuable chemical building blocks, materials, and advanced biofuels.

The value chain demonstration projects will achieve:

– Mobilizing an increasing supply by sustainably increasing productivity and mobilization of currently unused biomass and residues for agro and forest with special attention to SMEs and farmers/foresters

– Cost-efficient preparation of harvested material at farm level including suitable packaging and e.g. water extraction from the biomass to reduce transport volume and improved storage capability

– Improved logistics and storage to provide a continuous supply of feedstock

– Development and demonstration of new feedstock with higher sugar content (C6 and C5)

– Integration of lignocellulosic feedstock (e.g. agricultural residues) supply, transportation and storage into a complete biorefinery logistics concept to demonstrate economics of year-round operation

– Evaluate feedstock flexibility of lignocellulosic enzymatic conversion processes for European lignocellulosic biomasses (available agricultural residues, wood residues, energy crops) at demonstration scale

– Demonstration of cost-effective fractionation, separation and purification technologies for lignocellulosic biomass into its basic components, such as lignin, cellulose, hemi-cellulose, sugars and other carbohydrates

– Development and demonstration of low-cost integrated bioreactors in order to reduce the investment needed for the production of biofuels and biochemicals.

– Separation and purification technologies for high quality (low cost) sugar streams for chemicals and fuels

– Development and testing of robust enzyme cocktails for (ligno-cellulosic) biomass conversion for improved performance and cost price reduction

– Demonstrate innovative biotechnological, biocatalytic and catalytic routes to obtain building blocks and chemicals from cellulosic sugars (C5 and C6), to convert ethanol into butanol, and to produce ethanol and butanol derivatives

– Production of biobased advanced fuels and materials via innovative advanced technologies

– Improving the overall conversion yield from the lignocellulosic feedstock into biochemicals and biofuels

– Demonstrate processes for transforming lignin into high(er) value products, such as hydrocarbons, biomolecules, aromatic platform chemicals, resins, additives, new materials and composites

– Demonstrate production of derivative products from ethanol and other fermentation products (e.g. ethylene, ethylene oxide, butanol derivatives, jet fuels)

– Demonstrate processes that decrease Capex and / or Opex and increase the overall process sustainability of processes based on lignocellulosic feedstock

– Demonstrate the economics of combined production of biofuels and bio-based chemicals from lignocellulosic feedstock at large scale

– Demonstrate the added value of integration of existing chemical and catalytic conversion technologies into production processes based on lignocellulosic feedstock

– Polymerisation processes based on new biobased monomers, biopolymer processing into products (films, fibres, packaging, structural composites for e.g. automotive, agriculture) and demonstration of routes to replace specific fossil-based polymers

– Demonstration of new value chains leading to consumer products

– Increase consumer awareness on biobased products and biobased economy.

– Identify and create market applications for new biobased products; diversification of markets of current biomass based products; networks and closer cooperation with downstream industries to better understand and serve industrial customers and consumers requirements

– Demonstrate industrial feasibility for new products.

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.1.4; 1.2.1; 1.2.3; 1.2.4; 1.2.5; 1.2.6; 1.2.7; 2.1.1; 2.1.2; 2.1.3; 2.1.4; 2.2.1; 2.2.2; 2.2.4; 2.2.5; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.8; 3.1.10; 3.1.12; 3.2.1; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require non-technological, cross-cutting challenges to be solved. This will lead to calls for specific Supporting Projects on cross-cutting issues (See 3.1.3).

The value chains demonstration projects will lead to investments in full-scale Flagship projects. This value chain will lead to at least flagship project. These flagships projects will cover the full value chain. They will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures. See below an example of one of the possible flagship projects to be realised within value chain nr 1.

Value chain Flagship Example

A flagship for advanced biofuels using 400.000 dry tons of straw could produce biofuels and biochemicals (ethanol, butanol, polyols, diols) and energy

Value chain 2

The next generation forest-based value chains: utilisation of the full potential of forestry biomass by improved mobilisation and realisation of new added-value products and markets.

Projects within this value chain are built on the current sustainable practice of forestry and its processing value chain (e.g. the pulp and paper industry). The ambition of this sector is to increase the product portfolio and to create new markets in addition to the current products. Technologies and applications will be developed based on their current raw materials and the residues and side streams.

This will be achieved by creating more added-value products from the current feedstock base: by increasing feedstock mobilisation (forest residues), and improved utilization of side and waste streams. For this, innovative and efficient technologies will be implemented, new innovative products developed and co-products, side-streams and residues valorised. This improves the competitiveness of the European forest-based value chains while reducing the pressure on biomass resources by producing more and better from less, and thus developing rural livelihood.

The biobased products from this value chain help to mitigate climate change by realising the replacement of fossil-based materials by biobased materials with a positive social impact and lower environmental footprint. This will fulfil market and consumer demand and create new markets by demonstrating routes and concepts for new and innovative materials into new products.

The value chain demonstration projects will achieve:

– Mobilizing an increasing supply by increasing productivity and mobilization of forest biomass and residues in sustainable manner while making best use of innovations in forestry practices

– Biostimulants that enhance forestry output increasing the nutrient use efficiency

– Innovative tree species that can provide biomass to the biorefinery with sustainable management practices

– Development and demonstration of cost-effective fractionation, separation and purification technologies for wood

– Development and demonstration of new functional biobased chemicals and materials from side streams and residues from forestry and pulp and paper mills (e.g. based on lignin, cellulose, or e.g. hemicelluloses)

– Demonstration of new processes (biological, chemical, and combination thereof) at scale, for added value products, and in particular their economic viability and environmental benefits

– Integration of new biobased additives and formulation for high performance products / in cooperation with converters, formulators and users

– Demonstration of new and more efficient production concepts for specialty and performance chemicals (e.g. biosurfactants, emulsifiers, pigments, lubricants, specialty polymers, additives, etc.)

– Develop adequate advanced recycling methods for bio-materials and residues (improved collection, sorting and processing)

– Replacement of petrochemical specialties / performance chemicals such as stabilizers, emulsifiers, chelants, surfactants, solvents, thickeners, lubricants, antioxidants, pigments, etc. with bio-based counterparts

– Develop and demonstrate new functional biobased materials: e.g. bioplastics, biocomposites, materials based on lignin, starch, (nano-)cellulose or carbon fibre: towards fit-for-purpose solutions for diverse industrial customers

– Formulation of new materials into end-user products and demonstration of new value chains leading to consumer products with higher bio-content, improved ecoefficiency and/or improved performance at the production and customer side (films, fibres, packaging, structural composites for e.g. automotive, construction)

– Application testing and demonstration of the industrial feasibility of new products.

– Increase consumer awareness on biobased products and biobased economy.

– Identify and create market applications for new biobased products; diversification of markets of current biomass based products; networks and closer cooperation with downstream industries to better understand and serve industrial customers and consumers requirements

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.2.7; 1.2.8; 2.1.1; 2.1.2; 2.1.4; 2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.1; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.6; 3.1.8; 3.1.9; 3.1.11; 3.1.13; 3.1.15; 3.2.2; 3.2.3; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require non-technological, cross-cutting challenges to be solved. This will lead to calls for specific Supporting Projects on cross-cutting issues (See 3.1.3).

The value chains demonstration projects will lead to investments in full-scale Flagship projects. This value chain will lead to at least one flagship project. This flagship project will cover the full value chain. They will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures. See below an example of one of the possible flagship projects to be realised within value chain nr 2.

Value chain Flagship Example

A flagship converting a pulp mill into a multiproduct forest-based biorefinery producing new biobased products. Production of innovative pulp fibres for textiles at a volume of 200.000 ton/y from wood, coproducing new biobased products, e.g. biocomposites and biopolymers at 20.000 ton/y

Value chain 3

The next generation agro-based value chains: realising the highest sustainability and added value by improved agricultural production and new added value products and markets.

Projects within this value chain build on the current sustainable practice of agriculture (incl. horticulture, and fertilizer companies) and its processing value chain (e.g. agro-food industry). The ambition of this sector is to increase and broaden the product portfolio and create new bio-based markets on top of the current products. Technologies and applications will be developed based on the current raw materials and increase the use of their residues and side streams. This strengthens the competitiveness of the existing value chains thereby securing the production of their primary products and increasing the added value of industry in rural environment.

This will be achieved by creating more added value products from the current feedstock base through increasing feedstock production and flexibility, improved utilization of side streams and mobilising residues. Moreover new and improved profitable crops with a higher efficiency in the production (regarding fertilizer and water use, logistics) will reduce industrial waste streams and improve the environmental impact. For the existing and new crops, innovative and efficient technologies for growing, harvesting and logistics will be implemented, new innovative products developed and co-products, side-streams and residues valorised. Moreover, for specific value chains an innovative range of inputs will become available enhancing agricultural productivity whilst not threatening the environment. New plant protection products (biocides, biocontrol, …) and plant nutrition products (biostimulants, high -efficiency fertilizers) will be obtained under this value chain. This improves the competitiveness of the European agricultural value chains while reducing the pressure on biomass resources by improved utilisation of by-products and side streams. Moreover, it will create a more competitive European farming sector, thus especially developing rural areas.

The biobased products from this value chain help to mitigate climate change by realising the replacement of fossil-based materials by biobased materials with a positive social impact and lower environmental footprint. This will fulfil market and consumer demand and create new markets by demonstrating routes and concepts for new and innovative materials into new products.

The value chain demonstration projects will achieve:

– Mobilizing an increasing supply by increasing productivity and mobilization in sustainable manner while making best use of innovations in agriculture practices (eg. By improved soil structure and fertility, innovative crop and plant species)

– New plant species or varieties: Deliver specific ingredients for the new value chains (e.g. fatty acids, more homogeneous lipid composition, single and complex carbohydrates or protein components)

– Cost-efficient preparation of harvested material: introduction of innovative technologies and machinery that reduce pre & post-harvest losses and prepare the biomass in the best possible way.

– Demonstration of technologies that recover minerals (such as phosphate) from agricultural, agro-industrial and dairy farming residues, convert them into fertilizers and prove new fertilizer concepts by eg. field trials

– Demonstration of valorisation concepts of co-products and side-streams (proteins, pulp, fibres) from agro-food industry towards higher added-value products including feed and food ingredients, including efficient and cost-effective fractionation, separation purification technologies to simplify biomass into its basic components, mildly extract or separate components while preserving their functionalities (eg. Functional proteins)

– Demonstration of production concepts that specifically use a combination of various biomass feedstocks thereby increasing the diversity and functionality of products

– Integration of new biobased additives and formulation for high performance products / in cooperation with converters, formulators and users

– Demonstration of new and more efficient production concepts for specialty and performance chemicals (e.g. biosurfactants, bioplastics ,emulsifiers, pigments, lubricants, specialty polymers, additives, etc.)

– Replacement of fossil-based plasticizers and flame retardants with biobased (superior) alternatives

– Introduction of new biobased molecules: platform chemicals and polymers going towards 100% biobased solutions, providing alternatives and new solutions to fossil-based chemicals and materials, which should be competitive in the market place and demonstrate environmental benefits (through Life Cycle Assessment)

– Develop and demonstrate new functional biobased materials: e.g. bioplastics, biocomposites, materials based on lignin, starch, (nano-)cellulose or carbon fibre: towards fit-for-purpose solutions for diverse industrial customers

– Formulation of new functional biobased materials into end-user products and demonstration of new value chains leading to consumer products with higher bio-content, improved eco-efficiency and/or improved performance at the production and customer side (films, fibres, packaging, structural composites for e.g. automotive, construction, infrastructure)

– Application testing and demonstration of the industrial feasibility of new products.

– Demonstration of new biodegradable, compostable or recyclable materials and products and development of adequate advanced recycling methods for bio-materials and residues (improved collection, sorting and processing)

– Establishing stronger links and better understanding of the needs (quality, performance) of downstream industries

– Increase consumer awareness on biobased products and biobased economy.

– Identify and create market applications for new biobased products; diversification of markets of current biomass based products; networks and closer cooperation with downstream industries to better understand and serve industrial customers and consumers requirements

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.1; 1.1.2; 1.1.5; 1.1.6; 1.1.7; 1.2.7; 1.2.8; 1.2.2; 2.1.1; 2.1.2; 2.1.4; 2.1.5; 2.2.1; 2.2.2; 2.2.3; 2.2.4; 2.2.5; 3.1.1; 3.1.2; 3.1.3; 3.1.4; 3.1.5; 3.1.6; 3.1.8; 3.1.9; 3.1.11; 3.1.13; 3.1.15; 3.2.2; 3.2.3; 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5

Moreover, demonstrating the value chains will require non-technological, cross-cutting challenges to be solved. This will lead to calls for specific Supporting Projects on cross-cutting issues (See 3.1.3).

The value chains demonstration projects will lead to investments in full-scale Flagship projects. This value chain will lead to at least one flagship project. This flagship project will cover the full value chain. They will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures. See below an example of one of the possible flagship projects to be realised within value chain nr 3.

Value chain Flagship Example

A flagship processing agricultural green or lignocellulosic residues (beet leaves, grass, …) and surplus into 100.000 ton/y of proteins, and valuable chemicals and materials, like dicarboxylic acids

Value chain 4

Emergence of new value chains from (organic) waste: From waste problems to economic opportunities by realising sustainable technologies to convert waste into valuable products.

Projects within this value chain aim to develop and demonstrate value chains based on currently unused by-streams and waste from various biobased sources (agriculture, forestry, waste water treatment, sludge, organic household waste, yard waste, food processing waste, debarking waste). Realising cost competitive value chains producing added-value products will create solutions for the environmental problem of increasing waste flows (partly due to urbanisation), reducing pressure on virgin resources, and increasing the competiveness of industry.

Energy, fuels and building blocks produced from this value chain help in mitigating climate change by realising the replacement of fossil-based solutions with alternatives with a positive social impact and lower environmental footprint.

The value chain demonstration projects will achieve:

– Cost-efficient preparation of heterogeneous waste material, e.g. through e.g. separation technologies for the biogenic part of municipal solid waste (MSW), or thermocatalytical processes (gasification, torrefaction or pyrolysis)

– Modification of the pretreatment conditions to make the cellulose from (MSW) accessible to the enzymes.

– Adaptation of existing technologies to alternative feedstock, like the organic fraction of urban waste.

– Development and demonstration of new enzymes that can hydrolyse the cellulose fraction of MSW to sugars with improved yield, from which biofuels, building blocks and bioproducts can be obtained using different biological and chemical routes.

– Organic waste (agro-food residues and MSW) bioconversion to added value molecules using microorganisms and also higher organisms (e.g. insects)

– Development and demonstration of processes based on bark and other “wastes / sidestreams" from existing industrial uses of biomass as feedstock for high value biobased chemicals and biomolecules.

– Implement adequate advanced recycling methods for bio-materials and residues (improved collection, sorting and processing);

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (see section 3.1.2 for the description behind the topics):

R&D project topics

2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.3;

Moreover, demonstrating the value chains will require non-technological, cross-cutting challenges to be solved. This will lead to calls for specific Supporting Projects on cross-cutting issues (See 3.1.3).

The value chains demonstration projects will lead to investments in full-scale Flagship projects. This value chain will lead to at least one flagship project. This flagship project will cover the full value chain. They will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures. See below an example of one of the possible flagship projects to be realised within value chain nr 4.

Value chain Flagship Example

A flagship that Converts 400 000 tons of straw, 650,000 tons of manure and 50.000 tons of municipal solid waste into 73 million litres of bioethanol and about 99 million cubic meters of biogas (of which 76 million cubic metres of biogas will be upgraded and fed into the natural gas grid). In addition, district heating for approx. 10-20 000 households and electricity equivalent to 15-25,000 households' consumption will be produced.

[1]               Biofuel from waste, residue and non-food cellulosic material, RED Article 21(2). This means that any R&D, demonstration and flagships in the PPP dedicated to biofuel production will be based on waste, residue and non-food cellulosic feedstock.

[2]               Flagship plants are the first units of value chains operating at an economically viable scale

[3]               The primary mode of participation by SMEs in PPP activities is expected to be as regular industry actors

[4]               The qualitative and quantitative objectives in this table have been identified through intense discussions among all partners, and reflect business plans and expected investments. Unless otherwise stated the reference for the figures is the current situation in 2012

[5]               Of this, approx. 400 Mton comes from forestry and other wood sources. In 2010, 229 Mton wood was used for materials, 173 Mton for energy (Mantau, U. et al. (2010), EUwood. Final report, 30. June 2010). In 2008, industry used some 18.6 million tonnes of biomass (excl. wood), and the total quantity of biomass (excl. wood) used for both materials and energy use amounted to over 98 million tonnes (Jossart, J.-M. (2009): Development of the bioenergy sector – future European demand factors, technological development and competition. EEA-JRC-UASE Workshop Biomass resource assessment for biofuels/bioenergy and competition with other biomass. Eberswalde, December 2009). No numbers exist for EU alone, but the worldwide harvested biomass in 2008 was 13 bn tons (forestal and agricultural). Of this, 73% was used for food and feed, 11% was wood for material use, 10% wood for energy use and only approx. 3 % each was renewable raw materials for material and energy use (Nova-Institut 2011, FAO 2011, Kausmann et al 2008).

[6]               IEA Bioenergy Task 37. See also: http://www.iea-biogas.net/_download/publi-task37/Potential%20of%20Codigestion%20short%20Brosch221203.pdf, http://www.iea-biogas.net/_download/publi-task37/IEA_ABP-Brochure_en_2.pdf, http://www.iea-biogas.net/_download/publi-task37/Biogas%20upgrading.pdf, http://www.biores.eu/docs/BIOGASFUNDAMENTALS/IEA-MSWAD.pdf, http://epp.eurostat.ec.europa.eu/portal/page/portal/waste/waste_generation_management/generation

[7]               A 2% substitution of the transport fuels in 2020 with advanced ethanol would require 45 Mton of biomass.

[8]               ERTRAC SRA 2010

[9]               Should SMEs decide to participate in contract research. But it is expected that the primary mode of participation by SMEs in PPP activities will be as regular industry actors, which significantly increases the industrial SME participation.

[10]             Starting points are the definitions provided in the EIBI Implementation plan, as well as the TRL-definitions used by the Commission (Reference to Commission document on TRL levels). TRL 3: Analytical and experimental critical function and/or characteristic proof-of-concept; TRL 4: Technology validation in a laboratory environment; TRL 5: Technology validation in a relevant environment ; TRL 6: Technology demonstration in a relevant environment; TRL 7: Technology prototype demonstration in an operational environment ; TRL 8: Actual technology system completed and qualified through test and demonstration ; TRL 9: Actual technology system qualified through successful mission operations;

[11]             E.g. Leuna, Biobase Europe Ghent, BRI platform Reims, Bioprocess Pilot Facilities Delft, facilities at RTOs, as well as company-owned pilot and demonstration facilities

[12]             biofuels include road transport fuel and aviation jet fuel

Value chain 5

The integrated energy, pulp and chemicals biorefineries: Realising sustainable bio-energy production, by backwards integration with biorefinery operations isolating higher added value components.

New value chains will be demonstrated that improve the sustainability and economics of bio-energy production by conversion / integration into biorefinery operations: creating a spectrum of added-value products from the feedstock in addition to bio-energy. This will decrease the pressure on biomass resources and increase industries competitiveness.

New chemicals, biofuels and materials from this value chain help mitigating climate change by realising the replacement of fossil-based materials by biobased materials with a positive social impact and lower environmental footprint. This will fulfil market and consumer demand and create new markets by demonstrating routes and concepts for new and innovative materials into new products.

The value chain demonstration projects will achieve:

– Primary processing of biomass at farm level including suitable packaging and e.g. water extraction from the biomass to reduce transport volume and improved storage capability (e.g. by Torrefaction, pyrolysis, shredding, etc.)

– Integrating the production of bio-products and advanced bio-energy carriers in a smart way (smart use, maximise carbon and energy yield from biomass)

– Demonstrate processes for more efficient use of lignin: transformation into high(er) value hydrocarbons polymers, aromatics and performance chemicals before energetic use.

– Densify the energy content of the initial feedstock through several pre-treatment processes, e.g. torrefaction pelletization and pyrolysis oil production.

– Implementation of conversion technologies allowing for the use of heterogeneous biomass while ensuring high efficiency and low environmental impact

– Turning solid residues (bottom ash, fly ash) into valuable products, a.o. taking advantage of their mineral properties for plant nutrition.

– Integrating technological results from other value chains into the integrated bio-energy concept

The value chain demonstration projects will also reveal technological challenges that need more extensive R&D. These specific technological challenges are the basis of the calls for R&D Projects (see section 3.1.2 for the description behind the topics):

R&D project topics

1.1.4; 2.2.1; 2.2.3; 2.2.4; 2.2.5; 3.1.3;

The value chains demonstration projects will lead to investments in full-scale Flagship projects. This value chain will lead to at least one flagship project. This flagship project will cover the full value chain. It will include programmes realising feedstock supply, ensuring the market uptake, and integrating in the existing rural and industrial infrastructures. See below an example of a possible flagship project to be realised within value chain nr 5.

Value chain Flagship Example

A flagship for the conversion of an energy plant that currently co-fires 1.000.000 ton/y of biomass for energy production, into an integrated biorefinery, producing 400.000 ton/y cellulose fibres & chemicals next to bio-energy

3.1.2.     The R&D projects (addressing the innovation challenge)

While value chains can be built partly on already developed research results and successful pilot trials, the demonstration projects will still require substantial research and development before the whole value chain can be moved to the demonstration level.

Calls for R&D projects (including specifically SME targeted projects) will address the specific research and innovation challenges arising from the value chain demonstration activities. This will generate the necessary enabling knowledge and technologies to build and reinforce the new value chains from biomass to biorefineries and markets/products. Research and innovation activities addressing the innovation challenge will be centred around the three parts of the value chain: biomass supply, biorefineries and products & markets. The table on the next pages shows an indication of possible research areas and their timing. However, calls will only address those topics that arise from encountered challenges in the value chains to be demonstrated and realised. Calls will therefore be made more specific based on the value chains to be realized. Some (hypothetical) examples of topics becoming more specific:

– "Development of concepts for reuse of fertilizer recovered from by-streams in biorefinery operations" (1.1.2) might become a specific call on "Development of an economical process for the isolation of pure phosphate from process water arising from the value chain that processes Irish nature grass into proteins for fish feed and specific functional food ingredients" and / or "Development of an effective fertilizer application for the phosphate recovered from process water arising from the value chain that processes Irish nature grass into proteins for fish feed and specific functional food ingredients"

– "Efficient and cost-effective fractionation and separation technologies to simplify biomass into its basic components" (2.1.1) might become "Development of a sustainable and cost-efficient technology to separate wheat straw from Denmark into it's pure components cellulose, hemicellulose and lignin, within the specifications given by the further conversion of those components into pure sugars, cellulose for paper, benzene and furans"

Table 6. THE INNOVATION CHALLENGE - MAIN RESEARCH AREAS supporting the value chains

1. Fostering a sustainable biomass supply to feed both existing and new value chains

1.1 Increase biomass production by improving agricultural practices || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

1.1.1 || Development of higher efficiency in cultivation systems to increase yield, availability and use of forestry and agricultural biomass (in particular residues, co- and by-products) while meeting the range of other demands on arable and woodland. Reducing feedstock production costs under sustainable production methods with added value for the complete production chain and demonstrating of value creation (economic, environmental and social) at the production/ mobilisation stage || || ||

1.1.2 || Development of concepts for reuse of fertilizer recovered from by-streams in biorefinery operations. Preferably leading to a separation of organic matter and minerals, helping to improve plant yields and soil quality and reducing waste and environmental impact of biorefineries || || ||

1.1.3 || Identifying the most appropriate crop cultivation systems to increase biomass production for specific value chains taking into account climate change, crop rotational effects, resistance to biotic and abiotic stresses, nutrient and carbon balance, water use efficiency, soil tillage practices and management needs || || ||

1.1.4 || Development of pre-transformation techniques at harvest and/or storage, in particular focusing on cost- effective concentration systems to facilitate transport and/or storage. || || ||

1.1.5 || Development of agronomic solutions to maintain soil structure and fertility, reducing erosion, putting into value arable land and maximizing water use efficiency for specific areas in order to supply the biomass production for dedicated new fuels, chemicals and materials value chains || || ||

1.1.6 || Precision farming: improving soil quality, water, land use, new input management technologies (water, crop protection, animal husbandry techniques, sensor technology) for specific areas in order to increase the biomass supply for dedicated new value chains; || || ||

1.1.7 || Develop regional closed loop systems in biorefinery clusters and hubs: study the use and impact of spreading safe and nutrient-rich process water from biorefineries onto fields on soil quality and productivity || || ||

1.2 Mobilising an increasing supply || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

1.2.1 || New plant species or varieties: Improving composition of lignocellulose or other components for the use of plants as source of renewable materials to be used in specific value cahins (e.g. more easily hydrolysable, lower lignin content, lignin with less stable bonds) || || ||

1.2.2 || New plant species or varieties: Deliver specific ingredients (e.g. fatty acids, more homogeneous lipid composition, single and complex carbohydrates or protein components) || || ||

1.2.3 || New plant species or varieties: Create a list of biomass genotypes (e.g., poplar, willow, miscanthus, reed canary grass) to be grown for specific new value chains || || ||

1.2.4 || Mobilisation of currently unused biomass and residues from agriculture and forest through precision equipment for harvesting and collection, while maintaining other important functions of woodland and crop land || || ||

1.2.5 || Storage: Develop technologies to improve biomass storage properties and to improve feedstock quality || || ||

1.2.6 || Logistics: Improved logistics and storage to provide a continuous supply of feedstock to specific value chains, minimise transport costs, exploitation of transport as process stage and guarantee intermediate product quality and availability; || || ||

1.2.7 || Planning and managing integrated logistics chains at local and regional scale to achieve the maximum supply potential required for the value chains (also combining different transport types: road, railways and waterways) || || ||

1.2.8 || Recycling: Develop adequate advanced recycling methods for bio-materials and residues (improved collection, sorting and processing) || || ||

2. Optimising efficient processing through R&D and pilot biorefineries

2.1 Primary conversion processes || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

2.1.1 || Efficient and cost-effective fractionation and separation technologies to simplify biomass into its basic components, such as lignin, cellulose, hemi-cellulose, minerals, oils and fatty acids, protein, starch, sugars and other carbohydrates || || ||

2.1.2 || Innovations in existing primary processes (agro-food, pulp and paper) to minimise residues and obtain higher value || || ||

2.1.3 || Advanced technologies to mildly extract or separate components while preserving their functionalities and minimising the degradation of other components to enable their further valorisation || || ||

2.1.4 || Cost-efficient preparation of harvested material || || ||

2.1.5 || Ensuring flexibility on size of biorefineries while at the same time remaining price-competitive Combining low investment costs with large regional stakeholder commitment improving market deployment with the specific advantages of local/regional processing || || ||

2.2 Secondary conversion processes || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

2.2.1 || Bio-technological || || ||

2.2.2 || Chemo-catalytical || || ||

2.2.3 || Thermo-chemical processes || || ||

2.2.4 || Hybrid & consolidated processes || || ||

2.2.5 || Downstream processes || || ||

3. Developing innovative products and accelerating market-pull for biobased products and fuels

3.1 New materials & products (incl. conversion and functionalization technologies) || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.1.1 || Materials based on lignin (and bio-aromatic) chemistry; || || ||

3.1.2 || Biobased alternatives for existing polymers and innovative polymers from new biobased monomers || || ||

3.1.3 || Advanced biofuels and bioenergy carriers from waste, residues, lignocellulosic materials and other new promising biomass sources; || || ||

3.1.4 || New (chemical) building blocks from renewable resources; || || ||

3.1.5 || New functional biobased materials and products: e.g. bioplastics, biocomposites, materials based on lignin, starch, (nano-)cellulose or carbon fibres; || || ||

3.1.6 || Materials based on cellulosic and hemicellulosic fibres and fibre/polymer composites || || ||

3.1.7 || Lignin-based carbon fibres and nano-cellulose fibres; || || ||

3.1.8 || New packaging solutions derived from biobased materials; || || ||

3.1.9 || Materials based on biopolymers (such as starch, polyesters from vegetable oils and sugar, chitin) || || ||

3.1.10 || Biomass based oleochemistry: fatty acids conversion technologies, including chemistry (metathesis, for example) and biotechnology (including microbial conversion of sugars to lipids/fatty acids, cutin and suberin conversions) || || ||

3.1.11 || New advanced fertilizers; || || ||

3.1.12 || New high-value products (pharmaceuticals, cosmetics, chemical), in some cases directly extracted from plants || || ||

3.1.13 || New hygiene products derived from biobased solutions || || ||

3.1.14 || Materials based on oils and fats from plants and animals e.g. biolubricants, biosurfactants, biosolvents || || ||

3.1.15 || Recyclability concepts for biomaterials || || ||

3.2 Conversion and functionalisation technologies || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.2.1 || Functionalisation and conversion technologies, including chemical catalysis, mechanical, thermal and biotechnology processes towards functionalised chemicals and products || || ||

3.2.2 || Fractionation and extraction technologies to preserve structure and activities of macromolecules of natural polymers. Advanced functionalisation technologies; || || ||

3.2.3 || Biopolymer processing into products (films, fibres, packaging, structural composites for e.g. automotive, agriculture). || || ||

3.2.4 || Polymerisation processes based on new biobased monomers; || || ||

3.3 New applications and market development || Short 2014-'15 || Medium 2016-'17 || Long 2018-'20

3.3.1 || Connect market demand with biobased opportunities: combine required techno-economical specifications with opportunities of new biobased chemicals and materials || || ||

3.3.2 || Increase consumer awareness on biobased products and biobased economy. || || ||

3.3.3 || Identify and create market applications for new biobased products; diversification of markets of current biomass based products; networks and closer cooperation with downstream industries to better understand and serve industrial customers and consumers requirements || || ||

3.3.4 || Demonstrate industrial feasibility for new products. || || ||

3.3.5 || Create combinations and synergies between fossil and biobased materials. || || ||

3.1.3.     Supporting projects (addressing the societal challenges)

Demonstrating the value chains will require non-technological cross-cutting challenges to be solved. Some of those will be solved in the value chain demonstration projects and R&D projects, or on the programme level in the Joint Undertaking. Others will lead to calls for specific Supporting Projects on cross-cutting issues. Supporting projects will thus enable the value chains to face the many critical elements related to cross-disciplinary approaches. These practices and tools can either address market, legal aspects, technology, quality or any other aspect. Cross-cutting issues include cross-sectoral and critical elements which connect the different steps of the value chains, the different levels of innovation as well as the different stakeholders involved from the private and the public sector.

The Supporting Projects in BRIDGE will take into account the following cross-cutting issues:

– Clustering and networking: Clusters are networks of stakeholders in the bioeconomy, which transcend regions and value chains. They will be essential to develop new value chains and support the development of new processes and materials by connecting different partners: research, technology development, operators/producers and consumers. Some value chains aim to create and strengthen optimally integrated areas of rural and industrial biobased activities (Biobased 'hubs), and create and strengthen clusters which connect value chains and linking regional agriculture, industry and research networks. Activities might also involve the demonstration of systems of new integrated cascaded biorefinery approaches or systems of industrial ecology and symbiosis: combined residue processing, bio-energy production, heat integration and valorisation, re-use of water and (organic) nutrients, analyse energy streams to discover what processes / companies could fit together, etc. Studies might include feasibility studies regarding the optimal locations for biorefineries and suitable unused facilities for conversion to biorefineries.

– SME engagement: SMEs are expected to play an important role in building the European bio-based industries. They will be active throughout the whole PPP, in R&D and demonstration projects. In addition, BRIDGE will develop supportive measures for SMEs concerning critical issues such as financing, market information and forecasts, legal obstacles and international partnering. Moreover it is planned that SMEs pay a reduced membership fee to the PPP[1].

– Standards and regulations: While developing new biobased products, the BRIDGE projects will contribute to the development of standards working closely together with CEN[2]. Specific questions might arise from the value chain demonstration for analysing the relationship between the development of standards and regulations and the markets for bio-based products and bio-fuels and identify societal demands and unmet market needs. This includes the development of a common language over the entire value chain(s).

– Feed-stock sustainability and LCA: Specific value chains might require the assessment of methodologies for addressing sustainability criteria facilitating all projects, including a sustainability and economic feasibility evaluation over the whole value chain, and the environmental footprint of the resulting product.

Cross-cutting issues to be covered in the individual projects and by the overall Joint Undertaking concern increasing awareness and support for the activities of BRIDGE. Actions will include proactive communication, dissemination and outreach, educational activities and monitoring the impact on the European biobased economy.

3.2.        Monitoring the progress and impact

Fast implementation and performance feedback are key issues of BRIDGE. Overarching strategic objectives towards the Biobased Economy that will be triggered by the PPP activities and results have been identified in Table 1 (Chapter 2), covering the whole value chain as well as cross-cutting areas. Looking at the ambition and the high level strategic objectives of BRIDGE, the effectiveness and throughput will be the most suitable aspects for monitoring the success of the initiative.

The PPP is a chain of links: input, throughput, output, outcome, impact. Each of these links is taken into account in monitoring to assess and evaluate:

– Efficiency, in terms of relationship input/output;

– Effectiveness, in terms of relationship input/outcome and impact;

– Throughput, in terms of relationship between output, outcome and impact.

It is proposed to implement all validated technologies or processes at pilot scale within demonstration projects and in some cases flagships allowing the assessment of the programme progress with the help of an appropriate set of KPIs. Three levels of quantitative and qualitative Key Performance Indicators have been identified (see Figure 4).

Figure 4: The different levels of KPIs

In particular:

– KPIs “Level 1” address the contribution to accomplishment of the overall strategic objectives of the Biobased Economy associated with the Vision 2030 (outcome and impact). Although the PPP results and activities will be crucial triggers for these objectives, these objectives will not be direct results of the PPP;

– KPIs “Level 2” aim at monitoring the progress of BRIDGE and measuring how the specific research and innovation targets defined by 2020 are met (output and outcome);

– KPIs “Level 3” allow monitoring the success of each project to be funded under BRIDGE.

KPI level 3 will be defined by each project as ad-hoc KPIs attuned to KPI level 2.

Efficiency of BRIDGE

For the sake of monitoring progress and implementation of BRIDGE, the direct quantitative objectives could be used as KPIs Level 2 to monitor the progress of the programme (see Tables 2, 4, 5 and 8). A limited selection from these objectives is made as key specific objectives. These objectives are directly linked to a set of key performance indicators (kpi's), to be measured and monitored during the progress of the PPP, and to be used to steer the PPP activities accordingly. See table 8 and 9 on the next pages.

The monitoring at this level will be a task of the programme management. Frequent monitoring gives insight in the efficiency of the programme During the execution of the programme these KPIs will be evaluated on their effectiveness, in order to be able to change and complete the monitoring of the programme when needed.

These kpi's will be complemented with operational objectives on the PPP performance to be monitored continuously:

– Overall percentage % of industry investments (cash + in-kind) in the total PPP organisation and projects

– A well balanced SME involvement in BRIDGE organisation and projects, in line with Horizon 2020

– Involvement of RTOs / Academia (i.e. targeted amount of finances flowing to RTOs / Academia)

– Balance between R&D, demonstration and supporting projects

– Addressing the societal challenges (i.e. including some cross-cutting issues in demonstration projects)

– Follow-up on R&D results: % of PPP R&D results brought into demonstration projects

– How well do the projects realised address the variety of topics in the SIRA in a balanced way (e.g. variety in feedstock, in products, in processes, etc.)

– A geographically balanced distribution of projects across member states (in all projects, and especially large demonstrators)

Table 7. PPP Key Objectives

· 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors); · At least 10 new biobased value chains (new products and feedstock); · More than 200 cooperation projects through cross-industry clusters · 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030 · 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions) · 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials · At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

Effectivity of BRIDGE

To get insight in the effectiveness of the programme, i.e. answering the question ‘are we doing the right things?’, a monitoring for the KPIs at Level 1 (Table 1) has to be set-up. This is a task of the programme management, but might be supported by a Supporting Project within the PPP, that will run throughout the execution of the programme.

KPI level 3 will be defined by each project. This can be done by setting monitoring criteria in the call for proposal and/or by demanding the determination of KPIs in the Description of Work of the projects. The KPIs Level 3 have to be attuned to KPI level 2 and 1. Ensuring the KPIs Level 3 are well attuned is the responsibility of the programme management of BRIDGE. The project manager is responsible for monitoring the progress of the project and has to deliver data for KPIs Level 1 and 2 when needed.

Table 8: PPP key specific objectives + kpi's for monitoring and assessing the progress of the Biobased Industries PPP

1 || Objective || 36 new cross-sector interconnections in biobased economy clusters (new bridges creating cooperation between the 9 different sectors);

KPI || # of new cross-sector interconnections in BRIDGE projects || 31-12-'16 || 31-12-'18 || 31-12-'20

10 || 20 || 36

How to analyze || Amount of innovative cooperation's started in BRIDGE value chain demonstration projects: When companies from different sectors start to cooperate on building new value chains, while these companies have not been active in the same value chain before / did not cooperate in business before (or did cooperate but in a totally different field).

2 || Objective || At least 10 new biobased value chains (new products and feedstock);

KPI || New biobased value chains realised || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 4 || 10

How to analyze || Amount of completely new value chains (from raw material to product) developed in BRIDGE projects: New innovative products or existing products that have not been produced from the biobased feedstock before. The new value chains are proven in the PPP projects to be economically viable, and to fulfil all relevant sustainability criteria. Each of the value chains have elaborated business cases and plans for commercialisation (if not already scaled up to flagship projects - see objective 7)

3 || Objective || More than 200 cooperation projects through cross-industry clusters

KPI || General progress of BRIDGE || 31-12-'16 || 31-12-'18 || 31-12-'20

80 projects || 140 projects || 200 projects

How to analyze || Amount of cooperation projects started (value chain demonstrations and R&D)

4 || Objective || 5 new building blocks based on biomass of European origin validated at demonstration scale, further increasing to 10 in 2030

KPI || Amount of new biobased building blocks || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 2 || 5

How to analyze || New building blocks developed and demonstrated by BRIDGE projects. New biobased building blocks are chemical building blocks that are currently made from fossil sources and have not (successfully) been made from biomass on (pre)commercial scale before, or are new building blocks that could replace the current fossil based ones. The new building blocks are proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

5 || Objective || 50 new biobased materials (eg. such as specialty fibres, plastics, composites and packaging solutions)

KPI || Amount of new biobased materials || 31-12-'16 || 31-12-'18 || 31-12-'20

10 || 20 || 50

How to analyze || New biobased materials developed and demonstrated by BRIDGE projects. The biobased materials that replace current materials have proven to have an equal or overall better sustainability (by LCA, replacing fossil based, improved material efficiency, reduced GHG emission, biodegradability, recyclability or other improved effects during use or reuse). The biobased materials have proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

6 || Objective || 30 new demonstrated ‘consumer’ products based on biobased chemicals and materials

KPI || Amount of new biobased ‘consumer’ products || 31-12-'16 || 31-12-'18 || 31-12-'20

5 || 15 || 30

How to analyze || New biobased products and applications developed and demonstrated by BRIDGE projects. The biobased products (materials, fuels, chemicals successfully converted into to 'consumer' products) will have an overall better sustainability than its current alternative (by LCA, replacing fossil based, improved material efficiency, reduced GHG emission, biodegradability, recyclability or other improved effects during use or reuse). The biobased products have proven in the PPP projects to fulfil a clear market demand and its technical requirements, to be economically viable and to fulfil all relevant sustainability criteria.

7 || Objective || At least 5 flagships resulting from BRIDGE producing new biobased materials, chemicals and fuels which have proven to become cost-competitive to the alternatives based on fossil resources (at least 1 per value chain)

KPI || Bringing PPP results into practice || 31-12-'16 || 31-12-'18 || 31-12-'20

1 || 2 || 5

How to analyze || Amount of flagship projects started based on BRIDGE demonstration projects

Figure 5: Proposed approach to monitor BRIDGE

Monitoring of these key specific objectives and kpi's will be performed according to the overall logic of figure 5.

3.3.        Call procedure

BRIDGE supports research and innovation activities following open and competitive calls for proposals, independent evaluation, and the agreement for each selected project of a Grant Agreement and a Consortium Agreement.

Submission and evaluation procedure

Applications to the Joint Undertaking for financial support will be made following open competitive calls for proposals. The evaluation, selection and award procedures will be described in details in a specific document "Rules for submission of proposals, and the related evaluation, selection and award procedures". Evaluation will be performed on the basis of Excellence. The evaluation criteria (including weights and thresholds) and sub-criteria together defining 'Excellence', and the eligibility, selection and award criteria, for the different funding schemes will be based on Horizon2020 guidelines and described in a dedicated chapter in each Annual Implementation Plan and call, titled "Evaluation criteria and procedures".

Proposals will not be evaluated anonymously. Ranked lists of proposals will be established for each main area. Proposals from different topics, within the same area, with equal overall scores will be prioritized according to the overall Joint Undertaking Annual Implementation Plan coverage. Proposals for the same topic with equal overall scores will be prioritised according to their scores for the S/T Quality criterion. If they are still equal, they will be prioritised according to their scores for the Impact criterion. A reserve list will be constituted if there is a sufficient number of good quality proposals, which will be taken into consideration if budget becomes available.

Consortium Agreement

The legal entities wishing to participate in a project shall form a consortium and appoint one of its members to act as its coordinator. As a general rule, the coordinator of a demonstration project should come from the Industry Grouping (members of the Biobased Industry Consortium - BIC) or become member of BIC (before project application). For R&D and Supporting Projects the coordinator can be an Associate member to the BIC (e.g. RTO, university, industry association, …), however supported and steered by one or more members of BIC that together defined and support the specific call topic, based on the value chain project under development. Any exception to this rule will have to be justified. The IPR rules of BRIDGE will be described in a separate document.

Grant Agreement and forms of grants

The Consortium Agreement (between the partners) has to be agreed and signed before the signature of the Grant Agreement (between consortium and BRIDGE).

BRIDGE financial contribution will be given as a grant to the beneficiaries. The contribution will depend on the funding scheme, activity, nature of the beneficiary and type of cost. The reimbursement rules will be specified in detail in the call for proposals.

The Grant Agreement will:

– Govern the relationship between the consortium and BRIDGE,

– Provide appropriate provisions for the implementation of the RTD activities and support actions,

– Ensure that appropriate financial arrangements and rules are in place relating to the intellectual property rights policy (to be further detailed in the Consortium Agreement) and,

– projects shall be supported by a financial contribution from BRIDGE and through in-kind and/or cash contributions from the legal entities participating in the activities.

Requirements for participation

Participation in projects shall be open to all legal entities and international organisations once the minimum conditions have been satisfied. The minimum conditions for projects funded by BRIDGE are (cfr. Horizon 2020 rules):

– at least three legal entities must participate, each of which must be established in a Member State or Associated country;

– The partners should come from at least 3 different Member States

– All three legal entities must be independent of each other as defined in Chapter 1, Article 7 of the Rules of Participation of Horizon 2020;

BRIDGE will ensure that innovative SMEs will be an integral part of the PPP execution by having a visible and easy accessible SME portal, easy access to market information and financing instruments dedicated to SME. Furthermore, it is envisaged that a significant number of PPP funded projects will include a minimum of SME involvement, including special SME-calls for technology development.

Details on the calls procedure of BRIDGE (programming and implementation) are described in a separate document.

[1]               A defined in the BIC statutes, its Internal Rules and the Biobased Industries PPP Governance document.

[2]               European Committee for Standardization (Comité Européen de Normalisation)

4.           Stakeholder involvement

A group of 40 leading companies and clusters from current and future biobased sectors, across Europe, together developed this underlying Strategic Innovation and Research Agenda. The cooperation and exchange across a broad range of sectors such as chemical, pulp and paper, agro-food, biofuel and energy companies and well as technology providers (e.g. biotechnology) is exceptional and promises to be extremely fruitful and holds great potential. Partners cover all the key phases of a general biobased value chain, as well as nearly all countries in the EU. SMEs are well involved and integrated in the PPP partnership. Research organisations and academics are joining and supporting the research and demonstration priorities.

4.1.        Industrial partners in BRIDGE

4.1.1.     The Industry Grouping

Currently 41 industrial partners (large enterprises, SMEs and clusters) contribute financially and in-kind to the founding of the PPP (see figure 6). The industrial partners have grouped themselves into a legal entity (BIC AISBL), with a General Assembly and a balanced representation of the relevant industrial sectors.

Figure 6: The BIC industrial members (large enterprises, SME, clusters)

The industrial partners are supported and advised by their European Associations (figure 7).

Figure 7: European Associations contributing to BRIDGE

4.1.2.     SME participation

A substantial part of the transition to a biobased economy will be initiated and/or developed by innovative starters and SMEs. These SMEs are essential in offering and developing specific services, technologies, equipment and instruments, both in enhancing developments at large enterprises as well as in stand-alone projects or local cooperation. In addition, innovative SMEs capture the potential of new technologies extremely fast, thus pushing the bioeconomy as a whole. This PPP will develop supportive measures for SME concerning critical issues such as financing, market information and forecasts, legal obstacles and international partnering.

SME representation will take place through the different clusters participating in BRIDGE, but also through individual membership of BIC. Already among the current partner consortium, SMEs are already well involved, either directly or via clusters.

Direct SME partners

Currently 5 SMEs are direct members in BIC:

– IUCT (a high-tech company for industrial technological innovation aimed at developing, implementing and promoting new technologies in the chemical, pharmaceutical, and environmental fields)

– CLEA Technologies (core competencies in the development of green, sustainable biocatalytic processes and a proprietary technology for enzyme immobilization as Cross-Linked Enzyme Aggregates (CLEAs). 16-20 employees

– Biobase Europe Pilot Plant (open innovation pilot and demo facilities for the biobased economy)

– Direvo – Engineering Biomass (develops and implements biology-based solutions for partners and customers in the fast growing biomass conversion market)

– Biorefinery Process Facilities (open innovation pilot and demo facilities for the biobased economy)

SMEs in Clusters

Many SMEs are currently involved via four cluster-members in BIC: IAR, GFP, DBC and CLIB2021.

GFP – German Federation of Private Plant Breeders

A cluster of 60 German plant breeders of which 2/3 is SME

IAR ("Industries et Agro-ressources") cluster, France

90 SMEs represented and, in particular, the companies:

– Deinove (microbiological technologies for lignocellulose conversion into biofuels and chemicals)

– YNSECT (novel molecules from biomass using insects)

– CIMV (novel organosolv technology for lignocellulosic feedstock fractionation )

– Omega Cat System (novel catalysts and solutions in the field of olefin metathesis).

– Maguin (novel extraction process using pulsed electric fields)

– Alderys (disruptive synthesis for the production of chemical compounds by micro-organisms)

Dutch Biorefinery Cluster (DBC)_

– Via the association of Dutch paper and board mills: 2 SME specialty paper mills

· Coldenhove Papier

· Meerssen Papier

– Via the Product Board Arable Products

· Several SMEs converting arable biomass to food and materials

– Via the Product Board Horticultural Products

· Several SMEs converting arable biomass to food and materials

Biobased Innovations

– Involvement of SMEs is arranged on project bases. Two projects active (biobased innovations & biofunctionals). Active SMEs

· 5 SMEs in biobased innovations (advisory, fermentation, agrofood, biobased cleaning)

· 13 SMEs in biofunctionals (biogas, textile, advisory, agrofood, biomaterials, technology, packaging, filtration, paper, 1 torrefaction)

CLIB2021 Cluster Industrial Biotechnology, Germany

26 PPP-relevant SME members from Germany, EU27 and other countries represented, in particular 5 companies.

– SME are active in a variety of biotech sectors (see figure 8):

· Technology development/services (enzyme/strain development and optimisation, bioproducts, fermentation/reaction technology, purification, downstream processing, process optimisation, pilot plant/pilot services, biofuels, analytics)

· Biomass processing

· Biomaterials

· Policy/market analysis

Figure 8: SMEs in CLIB2021

BRIDGE will have a clear direct impact on SMEs’ competitiveness. European SMEs offer a wide range of biobased products, processes and technologies in different stages of development. For example, in Spain it is estimated that 95 bioprocesses, 91 bioproducts (49 of which are advanced biofuels) and 53 biobased technologies are currently being developed by biobased companies, most of which are SMEs[1]. However most of the SMEs do not have a product or a process ready for demonstration and still require substantial research work to be carried out.

Figure 9: Positioning of SMEs along the innovation chain

The Biobased Industries PPP will contribute to bringing these products and processes led by SMEs to the market, which will significantly contribute to fulfilling the 2030 objectives associated with the PPP’s ambitions. SMEs can also provide valuable support to large industrial players with technical assistance and support, often in tight cooperation with RTOs. They are experts in high technological solutions and are technology developers. Bioreactor design, process optimization, new biocatalyst for biomass processing, are some examples of areas where SMEs are deeply involved. These technologies and expertise could be instrumental for the implementation and deployment of demonstration projects.

Figure 10: Potential contribution of SMEs along the innovation chain

The industrial interest of this type of SME will be to develop a new product, process or services to be licensed or used by larger players in traditional and new value chains. BRIDGE, with a strong presence of SMEs, will become a platform for the most effective exploitation of the available resources to have new technologies going to the market. This will result in a greater number of new innovative products on the market.

BRIDGE will ensure that innovative SME will be an integral part of the PPP execution by having a visible and easy accessible SME portal, easy access to market information and financing instruments dedicated to SME. Furthermore, it is envisaged that a significant number of PPP funded projects will include a minimum of SME involvement, including special SME-calls for technology development.

4.1.3.     Biomass production

Sustainable biomass supply is an essential part of biomass value chains. This includes the increased production and mobilisation of existing biomass (forestry and agriculture), as well as the development of new dedicated crops. PPP partners investing in this part of the value chain are:

Plant breeders

– Federation of German Private Plant Breeders (60 plant breeders)

– Via Dutch Biorefinery Cluster

· Productboard Arable farming

· Productboard Horticulture

Fertilizer companies

– Fertiberia

Farmers / Farmers associations / Farmers cooperatives

– Nordzucker (16,000 beet growers as biomass suppliers, all shareholders are farmers)

– Südzucker (56% share holders are farmers – beet growers cooperative)

– Via Dutch Biorefinery Cluster

· FrieslandCampina (cooperative of dairy farmers)

· Cosun (cooperative of beet growers)

· Avebe (cooperative of potato growers)

· Productboard Arable farming

· Productboard Horticulture

– Via IAR:

· Tereos (cooperative, 12 000 farmers as shareholders)

· Sofiproteol (leading player in the French vegetable oil and protein industry with agricultural shareholders)

– Via ARD:

· Cristal Union, 9500 farmers involved as cooperators

· Vivescia, the main cooperation of Siclae, has 12.000 farmers also cooperators.

Forest cooperatives

– Holmen: 60% of their wood consumption is from own forest: 1Mha

– Metsä Group (Metsäliitto Osuuskunta): cooperative of 125.000 Finnish forest owners

– SCA: Europe largest private forest owner – 50% of own wood consumption: 2.5 Mha

– Södra (cooperative) has a total of 36,000 forest properties and 51,000 people as members

– UPM: own forests in EU area 0,9 Mha – 16 % of annual wood consumption originate from own forests and plantations

4.1.4.     Participation across Europe

The current PPP members cover whole Europe with their businesses. Except for Malta, production and conversion activities are in all EU member states. Especially in terms of contributing to an EU wide supply of sustainable biomass, the potential of the EU12 is substantial. Agricultural and forestry production levels are relatively low and leave significant room for progress. The Bloomberg New Energy Finance study estimates the potential of agricultural & forestry residues & municipal waste across the EU27 and concluded that 25.4 % of the total EU potential is located in the EU12, with Poland ranking in 5th position overall in the EU. For reasons of efficiency, biorefineries need to be close to the biomass sources.

The EU12 could not only benefit from being purely biomass suppliers, thus creating additional income opportunities for farmers and foresters, but even more so in terms of establishing the required industrial conversion/biorefinery capacities. This approach would allow addressing difficulties of the EU12 to identify a sufficient number of economically viable projects that can "absorb" the resources available to them in rural development funds. The concept of "Smart Specialisation" in this regard would allow EU12 Member States to build on their individual strengths, e.g. in terms of agriculture and forestry and in terms of fermentation know-how, giving priority to related investments in R&D&I. DG REGIO in cooperation with DG RTD and other services is currently preparing a "Practical Guide for Managing Authorities", assisting managing authorities (MAs) in integrating green growth into the regional research and innovation strategies for smart specialisation, thus making optimal use of the EU Structural Funds to address issues of sustainable energy, eco-innovation and eco-system and nature protection.

Independent from or as a follow-up to BRIDGE, the development of a network of biorefineries in EU12 Member States can provide an excellent opportunity to leverage the necessary structural funds under the EU Cohesion Policy, creating new sources of employment and economic growth.

In addition, PPP information and brokerage events will need to be organised in cooperation with the industry, specifically focusing on the EU12.

Therefore, BRIDGE will also stimulate demonstration activities at the production locations in EU-12 countries. Below an overview is given from the production facilities of the current BIC members:

· Billerud: Lithuania

· Borregaard: Czech Republic

· Cargill: Poland

· Clariant: Czech Republic, Poland

· Holmen: Estonia

· Metsä Group: Poland, Slovak Republic, Estonia

· Mondi: Slovakia (2x), Czech Republic (5x), Bulgaria (1x), Poland (11x), Hungary (3x)

· Nordzucker: Lithuania, Poland, Slovak Republic, Czech Republic

· Roquette: Bulgaria, Estonia, Romania

· SCA: Poland, Slovak Republic

· Smurfit Kappa: Poland, Czech Republic, Slovakia, Romania, Latvia, Lithuania

· Stora Enso: Estonia, Hungary, Latvia, Lithuania and Poland.

· Südzucker: Poland, Hungary, Romania, Slovak Republic, Czech republic

· Tereos (via IAR): 5 plants in Czech Republic.

· Siclae (via ARD), via its subsidiaries: Hungary, Romania and Poland

· Sofiproteol (via IAR): Romania.

· UPM: Poland, Estonia

· Unilever: Czech Republic, Romania

In order to benefit from scientific and technological expertise from institutes and academia from all over Europe, BRIDGE will cooperate with the relevant ERA NETs. Results of ERA NETs will be incorporated and implemented in BRIDGE and the PPP will advise on their research topics. Moreover, involved industrial partners in ERA NETs will be stimulated to become partners in BRIDGE.

In the ERA-NET ERA-IB (industrial biotechnology) partners and observers from 15 different countries joined forces to reduce fragmentation of national research efforts, and to encourage academics and industrial researchers to work together. The fact that member states such as Romania, Croatia and Poland are also participating, illustrates the growing interest of the Eastern European countries. Some of the clusters in BRIDGE have strong ties to academic institutions in EU-12 countries (e.g. CLIB2021 with Poland and the Slovak Republic).

4.1.5.     Participation research organisations

Research organizations, consisting of Research and Technology Organisations (RTO) and universities, play an important role in the implementation of the European Framework Programme for Research & Technology Development[2]. They also have an essential role in BRIDGE, through supporting the demonstration activities by executing research and development required to realize the vision of the Joint Undertaking. They furthermore contribute by evaluating and disseminating the scientific achievements as described in the annual activity reports and advise in setting the R&D agenda and Annual Implementation Plans.

A large network consisting of over 200 representatives of research organizations from different European member states expressed their interest in the SIRA (see Figure 11). In their combined response to the prioritization of the SIRA research topics, it was shown that the research organizations have a quite similar prioritization of the research topics as the industrial partners.

Figure 11. Distribution of RTOs and universities interested in the BioPPP over different European member states

4.1.6.     Regions

Many regions in Europe have already developed a regional strategy for the biobased economy, and several have set up local clusters and PPPs. Also the Committee of the Regions (CoR) recently emphasized the important role of public-private partnerships (PPPs) in accelerating the transition towards a bioeconomy[3]. More specifically, the CoR suggested that advanced regions in the bioeconomy field should be supported in taking the steps required by bioeconomy value chains and in connecting to other less advanced regions, and believes that this approach leads to an effective use of resources, while fostering cohesion.

Through the “Smart Specialisation Strategy” the European Commission encourages national and regional authorities across Europe to draw up research and innovation strategies for smart specialisation, so that the EU’s Structural Funds can be used more efficiently. Synergies between different EU, national and regional policies, as well as public and private investments, can be increased.

The Biobased Industries PPP is a key enabler in this respect since several of the regional clusters participate. BRIDGE will contribute to the creation of the “bridge” between Horizon 2020 and Structural Funds since it will trigger the participation of the regions in planning actions and measures well aligned with the intrinsic capabilities of each local areas.

5.           The EU added value

In February 2012, the European Commission has adopted a strategy and action plan “Innovating for Sustainable Growth: a Bio-economy for Europe2” to shift the European economy towards greater and more sustainable use of renewable resources. This bio-economy strategy is part of the Europe 2020 flagship initiatives "Innovation Union" and "A Resource Efficient Europe". The goal is a more innovative and low-emissions economy, reconciling demands for sustainable agriculture and fisheries, food security, and the sustainable use of renewable biological resources for industrial purposes, while ensuring biodiversity and environmental protection. This PPP is part of the implementation of this strategy.

5.1.        Added value of action at EU level and of public intervention using EU research funds

The multi-sectoral approach in the biobased PPP will combine the strengths of industries, regions and EU countries enabling the transition from oil & gas to a biobased sustainable economy. Neither single stakeholders nor individual member states will reach the required critical mass on their own, justifying the clear added value of tackling these ambitions on a EU27 scale. Highly forested countries and highly productive agricultural regions will be linked to industrial centres in Europe to generate new value propositions through the development of integrated value chains.

The EU approach has a distinct added value, complementing and bringing together national approaches. The EU mandates on the Common Agricultural Policy and the EU Horizon 2020 programme that combines knowledge and expertise from member states with the technologies available in other member states and the value chains in the different EU regions add up to a much larger effort than single projects alone. BRIDGE projects will therefore, where possible, be combined with national projects and structural and regional funds to achieve a multiplier effect.

Another rationale for an EU-led PPP is evident: most of the barriers/challenges to kick-start a biobased economy – from sustainable biomass supply to market pull via targets, product standardisation and green public procurement schemes – are not adequately addressed at national level but rest firmly on Community-level regulation, i.e. the Common Agricultural Policy, environmental regulations and the single market. In this context, BRIDGE will report on policy feedback on several cross-sectoral policies of relevance for the industry (from supply to market pull measures).

A clear EU added value for the Biobased Industries PPP is its key enabling role for implementing the European Commission's strategy and action plan, "Innovating for Sustainable Growth: a Bioeconomy for Europe”. It will also contribute to the implementation of several European policies and existing EU actions, deliverables and recommendations (i.e. the Lead Market Initiatives for Bio Based Products) which will help to increase coherence of market pull measures for biobased products across member states: green public procurement, standardisation, mandates, tax incentives for sustainable biobased product categories, setting indicative or binding targets for certain biobased product categories where they contribute to achieving the objectives of existing and future EU sustainability policies. The creation of a permanent policy desk within the initiative will also contribute to an improved and more informed dialogue between public and private biobased economy stakeholders.

Tackling these challenges in a cooperation between industry and the European Commission within the framework BRIDGE is justified by:

– the research needed which is so complex that no single company or public research institution can perform it alone,

– the absence of an agreed long-term budget plan and strategic technical and market objectives to encourage industry and the research community to commit more of their own resources will slow down the pace of innovation,

– the sub-optimal allocation of funds leaving gaps and overlaps in a fragmented research coverage, when member states do not align their funding,

– an insufficient volume of funds for an integrated and continuous programme covering fundamental research, applied research and EU-level demonstration and flagship activities,

– the fact that the value chains are dispersed across different countries and sectors which restricts the exchange and pooling of knowledge and experience.

This summarizes the clear European added value in having BRIDGE as a EU wide long term research and demonstration programme to allow large industrial companies and SMEs, including those in the new Member States, to collaborate between themselves and with European RTOs, universities, national governmental organisations and NGOs, working towards shared short, medium and long-term objectives across value chains.

5.2.        Additionality to existing activities

This SIRA aims at providing research and innovation priorities for the period 2014-2020 with the ultimate goal of accelerating the pace of innovation towards a sustainable biobased economy.

In this framework, there are three components of additionality:

– Input Additionality: collaborative Research and Innovation activities around an industry-led programme in close dialogue with different EC services could not be launched without public support, at first due to the current economic and financial challenge, but also because of the specific nature of the sectors involved and their complex value chains.

– Process Additionality: the innovation process is managed and implemented in a more efficient way due to the value chain approach, well aligned with the Horizon 2020 objectives.

– Output Additionality: the partners have drawn pathways to meet the 2030 vision, whatever economic scenarios may be faced by investors. This means a European roadmap towards demonstration and flagship projects and the tests of various business models and associated value propositions. It brings direct benefits to the participants and to the represented sectors and industries, showing that the barriers towards a sustainable biobased economy are not insurmountable.

Synergy, optimal alignment, cooperation and exchange with all main running initiatives in EU, is required to facilitate practical realisation. We will actively work with, for example, the following EU initiatives to deliver the objectives described in this document:

– European Innovation Partnerships (EIPs) aim to address weaknesses in the European research and innovation system, which might prevent the entry of innovations into the market. They provide a working interface between practice, science, policy makers, advisors, and other stakeholders at EU, national and regional level. Three candidate EIPs are of relevance to the biobased PPP: Agricultural Productivity and Sustainability, Raw Materials and Water Efficiency.

– EIBI (European Industrial Bioenergy Initiative) supports the demonstration of reference plants for innovative bioenergy value chains which are not yet commercially available (excluding existing biofuels and heat & power technologies) and which could be deployed on a large scale. The biobased PPP will develop competitive biorefineries optimising the creation of economic, social and environmental values, including energy conversion from waste streams, thus contributing important developments to the EIBI. In turn, the EIBI’s demonstration of successful bioenergy value chains could be valuable for the integrated biorefineries which are the goal of the Biobased PPP.

– EERA (European Energy Research Alliance) is a co-operation between the major European RTOs advising the EC on necessary bioenergy-related fundamental and applied research to achieve the policy goals defined in the SET-Plan

– The PPPs running under the Recovery Plan, in particular Factories of the Future PPP increases the technological base of European manufacturing through the development and integration of enabling technologies. Synergies with the biobased PPP are related to sustainable manufacturing tools, methodologies and processes for cost-efficiently shaping, handling and assembling products composed of complex and novel materials. The Green Cars PPP develops sustainable transport methods, including research on greening combustion engines, biomethane use, logistics and transport systems. Synergies with the biobased PPP lie in the realisation of value chains providing sustainable advanced biofuels for transport. The Energy-efficient Buildings (EeB) PPP aims at promoting green technologies and the development of energy-efficient systems and materials in new and renovated buildings aiming to reduce their energy consumption and CO2 emissions. The biobased PPP develops value chains which could deliver sustainable biobased building materials to support the EeB PPP objectives.

– The SPIRE PPP, also developed under Horizon 2020, aims to better understand and develop the role of the process industry in resource & energy efficiency. The biobased PPP supports the SPIRE PPP and its stakeholders by developing sustainable value chains, bringing together the critical stakeholders to ensure an infrastructure from field to the output from biorefineries. The SPIRE PPP strengthens the biobased PPP and its stakeholders by developing energy and resource efficient processes (both fossil and biobased) and prepares the current process and manufacturing industry for feeding in biobased building processes and blocks. Biobased Industries PPP, together with the Bio PPP, has identified docking points between the two PPPs to ensure mutual support and complementarity.

An overview of complementarities and synergies is provided in the following picture.

Figure 12: Complementarity and synergy of biobased PPP with main EU initiatives

The intended biobased PPP is fully complementary and synergetic to the Lead market initiatives and its recommendations, aiming at:

– Continuing to stimulate and enhance technological innovation and the development and application of technology.

– Increasing public funding for demonstration projects via public-private partnerships.

– Increasing public funding for demonstration projects and stimulating the construction of demonstrators via Public-Private Partnerships.

– Setting up a specific “EU Innovation Fund” which could also serve to aid the transition of the results to full-scale implementation and to the marketplace.

– Developing incentives for the conversion of production plants and industrial processes into biobased ones, provided that they have proven to be sustainable and that applicable EU State Aid rules are respected.

– Developing incentives (taxation or state aid measures, grants) to support the development of new, sustainable biobased products’ production processes.

Ultimately, this SIRA builds heavily on the findings of the previous CSA projects BECOTEPS[4] and Star-COLIBRI[5]. In particular the industrial stakeholders have further elaborated their findings and aligned them with the overall vision towards 2030, based on the integrated value chain approach.

6.           Financials

Budget

It is estimated that, to realise this Strategic Research and Innovation Agenda, a total budget of €3.8 billion is needed (see Figure 13). The founding partners together intend to invest above €2.8 billion in research and innovation efforts between 2014 and 2020, if the right framework conditions can be developed. This means that an additional € 1 billion funding from the Horizon 2020 budget of the European Commission will be needed to implement this proposed agenda.

The prioritisation in this research and innovation agenda, as well as the budget, is based on the ambitions of the BIC members in March 2013. A regular review will be performed on both the topics and budget distribution, based on obtained results and updated ambitions of the industrial partners (at least every 2 years).

Biomass supply

Many partners representing the 'biorefinery-sector' as well as the 'bio-products and bio-fuels' part of the chain recognize that the 'biomass supply' is an important area to invest more resources in. This stresses the importance for either increasing the involvement of partners active in the biomass supply chain, or stimulating research, development and demonstration via other funds.

Enable to realise the objectives on increasing the biomass supply, BRIDGE will actively cooperate with the EIP Agricultural Productivity and Sustainability to align on the relevant R&D and demonstration topics. Only by a strong cooperation with the agricultural and forestry sectors, a sustainable and secure supply of biomass for the production of biochemicals, bio-based materials can be secured, in harmony with food and feed applications.

Other funding for demonstration and flagship projects

Demonstration and flagship activities are a key output of BRIDGE. This is an area where significant public co-investments will be deployed jointly with large investments by industry to firstly implement their technologies on the market. Demonstration and flagship activities in BRIDGE include both smaller demonstrators (TRL 4-6) and bigger demonstrators (TRL 7-8) - see Table 3, the latter however not being fully eligible under Horizon2020. Thus, these developments require a close synergy between research and innovation grants available through H2020 on one side and cohesion and structural funds as well as debt facilities and risk finance instruments by EIB on the other side. The involvement of the EIB can act as a catalyst, encouraging other banks, financial institutions and the private sector to participate in an investment. Eventually EIB loans can be combined with EU grants depending on the scope and definition of the individual project fully in line with the overall ambition of the Innovation Union and H2020.

Structural Funds may complement local financial needs in terms of deployment of technologies, processes and products. Within the structural funds there are also regional development funds (cohesion funds for regional development); they will be addressed for instance for improved logistics, roads, required education, help SMEs to start-up. Within the integrated approach targeted by BRIDGE also the second pillar of the CAP is considered, which provides funds for rural development, in particular to help farmers to place investments that benefit the rural development. These should also be addressed for biobased economy related themes, for instance machinery to mobilise the residues, improve storage at the farms, etc.

Details on the finances and funding rules within BRIDGE are described in a separate document.

[1]               Data collected from the Industrial Biotechnology of ASEBIO, ASEBIO report 2011

[2]               Research and Technology Organisations in the Evolving European Research Area – A status report with Policy Recommendations by EARTO

[3]               Conference 'Partnering for the Bioeconomy in European Regions', 12 October 2012, Brussels

[4]               http:// www.becoteps.org

[5]               http://www.star-colibri.eu

Annex 4 – report on the European Commission's on-line public consultation

“Bio-based industries, towards a public-private partnership under Horizon 2020?”

Draft submitted by

Dr. Felice Addeo

for revision by Commission Services

Contents

1.     Introduction. 4

2.     Results. 8

2.1.       Respondents’ profile. 8

2.1.1.    Respondents answering as individuals. 10

2.1.2.    Respondents answering on behalf of an organization or an institution. 11

2.1.3.    The whole sample. 13

3.     Identification of the problems. 15

3.1.       Overall views on the competitiveness of the European bio-based Industries. 15

3.2.       The European bio-based Industries: strengths and weaknesses. 21

4.     European Added Value. 31

4.1.       The importance of EU level intervention. 31

4.2.       Added value of EU level intervention. 36

5.     Objectives of EU level intervention. 40

6.     Towards a PPP?. 44

7.     Impacts. 45

1.     Examples of flagship biorefinery plants from the SIRA (see Annex 3) 69

2.     EU annual economic potential for advanced bioethanol through replication of a successful bio-ethanol flagship plant. 69

3.     Social impact of competitiveness in the bio-based segment of the chemical industry  69

1.           Introduction

Implementing Horizon 2020 in relation to bio-based industries

Bio-based industries, at the heart of the bio-economy

Europe is committed to excel in smart, inclusive and sustainable growth. In this context, the Europe 2020 strategy highlights the building of a bioeconomy by 2020 as one of the deliverables under its flagship initiative "Innovation Union". The Commission has recently presented the communication "Innovating for sustainable growth: A bioeconomy for Europe" (COM (2012) 60 final).

The on-line public consultation conducted in connection with the preparation of the bioeconomy communication found that a large majority (>85%) of respondents saw significant advantages in developing a European strategy on a sustainable bio-based economy as follows:

· Supporting bio-based markets and the creation of economic growth and highly-skilled jobs (88.3%)

· Fostering the move towards a zero waste society (90.4 %)

· Securing a sufficient supply of food and biomass (88.3 %)

· Integrated, sustainable agricultural, aquatic and ecosystem services (89.9 %)

· Strengthening the research and innovation base (85.7 %)

The above-mentioned communication also sets out a comprehensive bioeconomy action plan. The plan includes the establishment of a public-private partnership on research and innovation for bio-based industries as a means to promote the development of integrated and diversified biorefineries, including their biomass supply chains. Consequently, the aim of a public-private partnership has been proposed in Horizon 2020, the future EU framework program for research and innovation.

Europe needs to champion the use of sustainable bio-based resources as a major source of raw material for conversion into innovative industrial products and fuels/energy. This must be achieved without creating shortages in food and feed supply and in full respect of the environment. Several studies (e.g. by the European Environment Agency[1]) demonstrate the potential to mobilise, in a sustainable manner, large volumes of non-food biomass in the EU as feedstock to support the growth of the bio-based industries. Europe's bio-based industries need to be technologically prepared and equipped to successfully address this challenge, along with all other participants in the value chain (e.g. farmers, foresters, waste managers).

An important goal is to expand the range and the volume of innovative products manufactured by the bio-based industries (including e.g. bio-based plastics, chemical building blocks, high-value ingredients for pharmaceuticals or cosmetics, advanced biofuels) from renewable biological resources (e.g. specialty crops, residues from agriculture, forestry, fisheries and the utilisation of biowaste). This will require the development of new types of biorefineries and the associated value chains as well as innovation within established bio-based industries with a long tradition of processing renewable biological resources (e.g. the pulp and paper industry, the starch and the food industry). The pulp and paper and the starch industries have the potential to play a significant role in the innovation cycle leading to the successful development of an effective integrated biorefinery infrastructure in Europe. Furthermore, the chemical industry can play an important role by expanding its use of bio-based resources. The biotechnology industry will deliver key components for innovative new processes.

The development of bio-based industries, if successful, can bring a lot of rewards that concern many stakeholders: consumers who get access to new sustainable products based on renewable biological resources, bio-based industries that take technological and sustainability leadership and thereby build long-term competitive advantages; enhanced economic growth and new jobs in rural, coastal and industrial areas; new revenue streams for EU27 agriculture and forestry.

Horizon 2020, aims to build technological and sustainability leadership as a lever for industrial competitiveness on a global scale. In addition to delivering excellence in research and technology development, the aim is to deliver real innovation and to promote its deployment on a large scale.

Under FP7, the EU's currently on-going seventh Framework Programme for Research, certain sectors pioneered the use of public-private partnerships (PPP), as a novel means to manage and implement EU Research Programmes. In the context of a PPP, both private and public sector contribute resources to support research and innovation activities, based on multi-annual research agendas. Examples of PPPs operating under FP7 include: European Green Cars Initiative, Factories of the Future, Innovative Medicines Initiative, Clean Sky, Fuel Cells and Hydrogen. The continued use of public-private partnerships is explicitly provided for under Horizon 2020.

A large group of stakeholders from the bio-based industries has shown strong interest in the creation of a new PPP in the area of bio-based industries and has expressed a commitment to contribute to its activities. The Commission is considering supporting a PPP in the area of bio-based industries, addressing specific parts of Horizon 2020: "Sustainable and competitive bio-based industries" and "Alternative fuels and mobile energy sources".

On the basis of these considerations, the “Bio-based industries, towards a public-private partnership under Horizon 2020?” consultation was launched to collect the opinions of stakeholders active in the field and of public at large on the state of play of the European bio-based industries, focusing on the aspects related to research and innovation.

The consultation specifically aimed at seeking respondents’ views about the role of the public-private partnership in implementing research and innovation activities under Horizon 2020.

The research design of the public consultation is made up of six general dimensions (as shown in the concept map, fig. 1):

– Respondents’ profile: information about respondents according to their type of participation to the consultation (individuals or on behalf of an organization or institution), such as occupation, organization sector, professional field, residence, workplace;

– Identification of the problems: this section addresses the respondents’ perception about: the competitiveness of the European bio-based Economy; the strengths and weaknesses of the European bio-based industries; the innovation capacity of the bio-based industries;

– European Added Value: views about the Added value of European level intervention in facing the problems of the bio-based industries, in comparison with other levels ( regional, national);

– Objectives of EU level intervention: what are the goals that should be addressed assuming EU level action on Research and Innovation in connection with bio-based industries;

– Towards a PPP?: considerations about the implementation of research and innovation activities in the bio-based industries area under Horizon 2020 through a PPP;

– Impacts: this section deals with the perceived potential impact of EU Research and innovation actions on bio-based industries if these actions are applied under a PPP framework;

The instrument used for the public consultation was a questionnaire (designed with assistance of the "Inter-service Steering Group (ISG) on Article 187 initiatives"). The on-line version of the questionnaire was prepared using the internet-based software package IPM (Interactive Policy Making), an Internet-based software package aiming at the creation, launch and analysis of replies of online questionnaires. The questionnaire was accompanied by the Specific Privacy Statement and a statement for the protection of personal data.

The questionnaire was articulated in six sections, resembling the research dimensions shown before. Each research dimension was measured using a single question or, more often, a set of items.

The public consultation was open for contributions between 21/09/2012 and 14/12/2012.

Awareness about the opening of this consultation was raised through a number of sources, including:

– the DGs involved in the Interservice Group;

– Programme Committee;

– FP7 Advisory group and National Contact Points;

– European Bioplastics Association;

– ERRMA (European Renewable Resources and Materials Associations);

– European Technology Platform for Sustainable Chemistry;

– Forest-based sector Technology Platform;

– Plants for the Future Technology Platform;

– EuropaBio;

– CEFIC (European Chemical Industry Council);

– CEPI (Confederation of European Paper Industries);

– FoodDrinkEurope;

– COPA COGECA (European Farmers and European Agricultural Cooperatives Association);

– ESA (European Seed Association).

All contributions collected through the on-line questionnaire were analyzed and used to generate the tables and the graphs found in this report.

fig. 1 - Concept map of public consultation

2.           Results

The online public consultation was open from 21/09/2012 to 14/12/2012.

During the consultation period 682 answers were collected. Data quality control and data cleaning procedures were applied to the dataset.

Nine (9) participants were removed because they answered two times to the public consultation (they were identified because they provided the same contact details); moreover, 35 people were removed from the final dataset because they did not agree to provide their name and contact details. During the analysis of the replies it was noted that 61 respondents from one single Member State were absolutely identical, apart from the contact details. These responses, representing 9.5% of the total, were further analysed to establish whether they overall influenced the outcome of the analysis and to what extent. It was concluded that the overall outcome of the consultation was not affected by the 61 respondents and for that reason it was decided to fully include them in this report.

The final sample is composed of 638 respondents.

2.1.        Respondents’ profile

This paragraph illustrates the profile of the participants to the public consultation. As shown in Fig. 2, the number of respondents who answered as “individuals” (53.1%) was slightly higher than that who answered “on behalf of an organization or an institution” (46.9%).

fig.2 - Are you answering as an individual or on behalf of an organization or an institution? (%; n=638)

Poland was the most represented country in this consultation, followed by Netherlands, Germany, Spain, France, Belgium, Sweden, Finland, Italy and Austria. Generally speaking, almost all EU Member States are represented; there were also some respondents from associated and non EU-countries (Norway, Switzerland, Bosnia and Herzegovina, Serbia, United States, and so on).

tab. 1 - Geographical contributions (frequency; n=638)

|| Frequency

Poland || 143

Netherlands || 94

Germany || 82

Spain || 58

France || 54

Belgium || 47

Sweden || 30

Finland || 24

Italy || 22

Austria || 21

Norway || 9

United Kingdom || 9

Czech Republic || 6

Portugal || 5

Romania || 5

Denmark || 4

Switzerland || 4

Bosnia and Herzegovina || 3

Ireland || 3

Hungary || 2

Serbia || 2

United States || 2

Brazil || 1

China (People's Republic of) || 1

Greece || 1

Israel || 1

Moldova (Republic of) || 1

Peru || 1

Singapore || 1

Slovakia || 1

Turkey || 1

Total || 638

The previous table is summed up in the next figure that shows the distribution of the respondents according to their origin: 71.2% of participants originated from the EU15 (Member States of the European Union prior to 1 May 2004), 24.6% originated from the EU12 (those MS joining the EU on/after 01 May 2004), 4.2% originated from countries outside the EU.

fig. 3 - Geographical contributions grouped according to EU aggregation (%; n=638)

2.1.1.     Respondents answering as individuals

The number of respondents answering as “individuals” was 339 (53.1% of the total sample); the majority of them working as a researcher in a research organization or in academia (30.1%) or for a private company (other than an SME; 25.4%).

Also a significant number of farmer/forester (19.2%) and SME employees (13.0%) participated in the consultation.

tab. 2 - If you are responding as an individual (frequency; %; n=339):

|| frequency || %

I work as a researcher in a research organization or in academia || 102 || 30,1

I work for a private company (other than an SME) || 86 || 25,4

I am a farmer / forester || 65 || 19,2

I work for an SME || 44 || 13,0

I am self-employed (but not as a farmer / forester) || 11 || 3,2

I work for a public authority (national level) || 11 || 3,2

I work for a public authority (local/regional level) || 8 || 2,4

I work for a non-governmental organisation (other than a consumer organisation) || 3 || ,9

I work for an international organisation (e.g. UN, OECD) || 2 || ,5

|| ||

Other || 7 || 2,1

Total || 339 || 100,0

As regards professional fields, respondents were allowed to give up to two choices, which explains why the number of responses exceeded the number of respondents (tab. 3).

tab. 3 - Main professional field of respondents’ answering as individuals (multiresponse)

|| frequency || % responses

Agriculture || 115 || 26,6

Food and feed || 60 || 13,9

Industrial biotechnology || 60 || 13,9

Chemicals || 42 || 9,7

Energy and bio-fuels || 40 || 9,3

Forestry || 27 || 6,3

Environment || 25 || 5,8

Transport || 8 || 1,9

Health || 8 || 1,9

Socio-economics || 5 || 1,2

Nanotechnology || 4 || ,7

Fisheries and aquaculture || 0 || ,0

|| ||

Other || 27 || 6,3

Other (non-pharmaceutical) biotechnologies || 11 || 2,5

Total (n= 339; responses = 432) || 432 || 100,0

The relative majority of respondents was engaged in the agricultural field (26.6%). Other professional fields mainly represented were: Food and feed (13.9%), Industrial biotechnology (13.9%), Chemicals (9.7%), Energy and bio-fuels (9.3%). No individual respondent from the Fisheries and Aquaculture field responded.

2.1.2.     Respondents answering on behalf of an organization or an institution

Participants answering on behalf of organization or an institution mainly represented the private sector: 48.2% represented a small or medium-sized enterprise (SME, 22.4%), a multinational or a trans-European private company (18.1%) or a national private company (7.7%). Other respondents represented the academic sector (18.1%), public authorities/public administrations (10.0%) and industry associations or chambers of commerce (9.7%).

tab. 4 - If you are responding on behalf of organization or an institution (frequency; %; n=299):

|| frequency || %

I represent a Small or Medium Enterprise (SME) || 67 || 22,4

I represent a multinational or a trans-European private company || 54 || 18,1

I represent an academic/research organisation or association of academic/research organisations || 54 || 18,1

I represent a public authority/public administration || 30 || 10,0

I represent an industry association or a chamber of commerce (national/regional/local) || 29 || 9,7

I represent a national private company (excluding SME) || 23 || 7,7

I represent an association of farmers or other primary producers (national/regional/local) || 16 || 5,4

I represent a non-governmental organisation/associations of NGOs (excluding consumer association) || 9 || 3,0

Other || 17 || 5,6

Total || 299 || 100,0

Participants replying on behalf of an organization mainly represented the Industrial biotechnology field (17.9%), and fields like Agriculture (14.4%), Food and feed (12.7%), Energy and bio-fuels (12.2%), and Chemicals (11.2%).

tab. 5 - Main professional field of respondents on behalf of an organization or an institution (multiresponse)

|| frequency || % responses

Industrial biotechnology || 75 || 17,9

Agriculture || 60 || 14,4

Food and feed || 53 || 12,7

Energy and bio-fuels || 51 || 12,2

Chemicals || 47 || 11,2

Forestry || 28 || 6,7

Environment || 23 || 5,5

Transport || 6 || 1,4

Health || 6 || 1,4

Fisheries and aquaculture || 5 || 1,2

Socio-economics || 4 || 1,0

Nanotechnology || 3 || ,7

|| ||

Other || 47 || 11,2

Other (non-pharmaceutical) biotechnologies || 10 || 2,5

Total (n= 299; responses = 418) || 418 || 100,0

2.1.3.     The whole sample

In order to synthetize the information about the type of organization the respondents worked for, a typology was created, combining the answers to the variables shown in table 2 and table 4.

The typology has four categories[2]: Private, Public, Academia and NGO (Non-governmental organization) (tab. 6).

The majority of respondents worked in a private organization (64.6%), whereas 24.6% belonged to the academic sector. Few respondents were categorized coming from the Public sector (8.8%) or a NGO organization (2.0%).

tab. 6 - Type of organization

|| frequency || %

Private || 412 || 64,6

Academia || 157 || 24,6

Public || 56 || 8,8

 NGO || 13 || 2,0

Total || 638 || 100,0

Considering the entire sample, the most represented professional fields were Agriculture (20.6%), followed by Industrial biotechnology (15.9%), Food and feed (13.3%), Energy and bio-fuels (10.7%) and Chemicals (10.5%).

tab. 7 - Main professional field of respondents (whole sample; multiresponse)

|| frequency || % responses

Agriculture || 175 || 20,6

Industrial biotechnology || 135 || 15,9

Food and feed || 113 || 13,3

Energy and bio-fuels || 91 || 10,7

Chemicals || 89 || 10,5

Forestry || 55 || 6,5

Environment || 48 || 5,6

Transport || 14 || 1,6

Health || 14 || 1,6

Socio-economics || 9 || 1,1

Nanotechnology || 7 || ,8

Fisheries and aquaculture || 5 || ,6

|| ||

Other || 74 || 8,7

Other (non-pharmaceutical) biotechnologies || 21 || 2,5

Total (n= 638; responses = 850) || 850 || 100,0

In the following graph, professional fields were re-categorized according to primary (35.7%) and other type of production (64.3%).

fig. 4 – Type of Production (n= 638; %)

 

3.           Identification of the problems

Section B of the questionnaire addresses the respondents’ perception about the competitiveness of the European Bio-based Industries. Participants were asked to express their view about the state-of-the-art of the bio-based economy in Europe, focusing on the problems faced by European Bio-based Industries. This section of the questionnaire contained three sets of items, whose specific aim was to survey the opinions of the respondents about the potential strength and weakness of the bio-based industries in relation to the current state of affairs in research and innovation.

3.1.        Overall views on the competitiveness of the European bio-based Industries

The first question of section B intended to analyze what participants think about the general level of competitiveness of the European bio-based Industries. This topic was surveyed with a set of seven statements, each one of them referring to the perceived competitiveness in various steps in the value chain (Primary production; Logistics and storage; Extraction and processing of renewable resources; Commercialization; Market development).

Respondents were asked to express their agreement with each item using a 5 point Likert scale, ranging from “strongly disagree” to “strongly agree”.

According to the respondents’ answers, the items were divided in three groups:

(1) Sectors in which European bio-based Industries were considered competitive in a global context (fig. 5):

· Logistics and Storage (strongly agree + agree = 65.0%) and

· Primary production (strongly agree + agree = 54.5%);

(2) Sectors in which uncertainty prevailed over European bio-based Industries competitiveness in a global context (tab. 8):

· Extraction and processing of renewable biological resources into value-added bio-based materials (neutral = 40.1%) and

· Extraction and processing of renewable biological resources into biofuels (neutral = 39.3%);

(3) Sectors in which European bio-based Industries were not considered competitive in a global context (fig. 5):

· EU measures for market development, harmonization and standardization in the field of bio-based Industries (strongly disagree + disagree = 55.7%) and

· Commercialization of value-added products produced from renewable biological resources (strongly disagree + disagree = 50.5%).

tab. 8 - What are your overall views on the competitiveness of the European bio-based Industries? (%)

Items || strongly disagree || disagree || neutral || agree || strongly agree || no opinion || total

EU primary production is competitive in a global context || 5,2 || 23,0 || 14,6 || 47,0 || 7,5 || 2,7 || 100,0

EU logistics and storage is competitive in a global context || 1,6 || 12,4 || 15,5 || 55,6 || 9,4 || 5,5 || 100,0

Extraction and processing of renewable biological resources into value-added bio-based materials in the EU is competitive in a global context || 3,6 || 21,5 || 40,1 || 24,1 || 8,5 || 2,2 || 100,0

Extraction and processing of renewable biological resources into biofuels in the EU is competitive in a global context || 5,8 || 28,7 || 39,3 || 17,2 || 5,3 || 3,7 || 100,0

Commercialization of value-added products produced from renewable biological resources in the EU is competitive in a global context || 29,2 || 21,3 || 19,1 || 19,9 || 7,4 || 3,1 || 100,0

EU measures for market development, harmonization and standardization in the field of bio-based Industries are competitive in a global context || 28,4 || 27,3 || 21,6 || 13,9 || 3,9 || 4,9 || 100,0

Overall, Europe's bio-based Industries are competitive on the worldwide scene || 3,1 || 23,8 || 42,9 || 21,9 || 5,3 || 3,0 || 100,0

N. B.    = "Strongly agree" plus "Agree" more than "Strongly disagree" plus "Disagree";  ="Strongly disagree" plus "Disagree" more than" Strongly agree" plus "Agree";   ="Neutral" more than 25%;

fig. 5 - What are your overall views on the competitiveness of the European bio-based Industries? (%; strongly disagree + disagree vs. strongly agree + agree)

As shown in the following graphics (fig. 6 to fig. 7), the overall competitiveness perception of EU Bio-based Industries appeared to vary by type of organization: respondents from academia and the public sector were more likely to have a better perception of the competitiveness of Bio-based Industries than those from the private sector.

fig. 6 - What are your overall views on the competitiveness of the European bio-based Industries? (%; strongly disagree + disagree vs. strongly agree + agree)

Private Sector Academic Sector

 

fig. 7 - What are your overall views on the competitiveness of the European bio-based Industries? (%; strongly disagree + disagree vs. strongly agree + agree)

Public Sector NGO Sector

 

3.2.        The European bio-based Industries: strengths and weaknesses

The next part of the questionnaire dealt with the perceived strengths and weaknesses of the European bio-based Industries. Two sub-dimensions were surveyed: 1) the EU's current situation and 2) the current innovation capacity of the bio-based Industries.

Regarding the evaluation of the EU's current situation, respondents were asked to rate, on a 5 point scale from “very weak” to “very strong”, the EU's current situation for 10 items, having as benchmark what they believed was required for Europe to be successful in the development of competitive bio-based industries (Tab. 9).

According to the responses received, the following 3 items received the highest approval rates, based on summing up the results for "very strong" and "strong":

· Strength of basic research in areas of likely future relevance with 78.7%;

· Investment of the private sector in research and innovation related to bio-based industries with 50.3%;

· Filing of patent application with 42.6%.

Other items considered rather strong than weak by respondents were:

· Strength of applied research & technology development (41.8%);

· SME participation in Research and Innovation related to bio-based industries (40.7%);

Having analyzed the responses for “very weak” and “weak”, two items were identified as being by far the weakest points:

· Access of bio-based industries to a range of state-of-the-art demonstration plants with 70.8%;

· Involvement of primary producers (farmers, forestry or aquaculture) in innovation efforts related to the development of supply chains for biomass as feedstock for bio-based industries with 68.5%.

Other items considered more weak than strong by respondents were:

· Collaboration between stakeholders along value and supply chains in terms of conducting R&I pertinent to bio-based industries (60.7%);

· Investment of the public sector in Research and Innovation related to bio-based industries (59.3%);

· EU wide coordination of applied research & technology development (55.9%).

In the context of this online public consultation it was surprising to see that even the public sector itself seemed to indicate that the investment in R&I by the public sector was considered a weakness (Figure 9). Due to the sample size of 638 valid responses, this result could certainly not be regarded as fully representative for the public sector in the EU in general; nevertheless it was considered to show a consensus among all stakeholder groups, calling for better and more public support for R&I activities in the EU.

tab. 9 - The European bio-based Industries: strengths and weaknesses - the EU's current situation (%)

Items || very weak || weak || neutral || strong || very strong || no opinion || total

Strength of basic research in areas of likely future relevance || 0,6 || 7,7 || 11,1 || 64,6 || 14,1 || 1,9 || 100,0

Strength of applied research & technology development || 0,6 || 40,6 || 15,7 || 32,1 || 9,7 || 1,3 || 100,0

EU wide coordination of applied research & technology development || 26,6 || 29,3 || 23,8 || 13,6 || 4,1 || 2,6 || 100,0

Involvement of primary producers (farmers, forestry or aquaculture) in innovation efforts related to the development of supply chains for biomass as feedstock for bio-based industries || 8,2 || 60,3 || 17,1 || 9,9 || 2,4 || 2,1 || 100,0

Investment of the private sector in Research and Innovation related to bio-based industries || 4,1 || 23 || 20,4 || 45,6 || 4,7 || 2,2 || 100,0

SME participation in Research and Innovation related to bio-based industries. || 6,3 || 23,2 || 24,1 || 35,7 || 5 || 5,7 || 100,0

Investment of the public sector in Research and Innovation related to bio-based industries || 5,2 || 54,1 || 20,7 || 14,7 || 3,6 || 1,7 || 100,0

Filing of patent applications (in line with the exploitation potential of research results obtained) || 1,6 || 14,7 || 27,0 || 40,4 || 2,2 || 14,1 || 100,0

Collaboration between stakeholders along value and supply chains in terms of conducting R&I pertinent to bio-based industries || 4,9 || 55,8 || 20,5 || 12,1 || 3,1 || 3,6 || 100,0

Access of bio-based industries to a range of state of the art demonstration plants || 39 || 31,8 || 14,7 || 7,4 || 2,8 || 4,3 || 100,0

N. B.    = "Very strong" plus "Strong" more than "Very weak" plus "Weak";  ="Very weak" plus "Weak" more than "Very strong" plus "Strong";   ="Neutral" more than 25%;   =”no opinion" more than 10%

fig. 8 - The European bio-based Industries: strengths and weaknesses - the EU's current situation (%; very weak + weak vs. very strong + strong)

fig. 9 - The European bio-based Industries: strengths and weaknesses - the EU's current situation (%; very weak + weak vs. very strong + strong)

Private Sector                                                                           Academic Sector

fig. 10 - The European bio-based industries: strengths and weaknesses - the EU's current situation (%; very weak + weak vs. very strong + strong)

Public Sector                                                                                                                     NGO Sector

Overall, the perception of individual stakeholder groups with regard to the items surveyed was found to be very similar and in line with the overall results for all stakeholder groups together. However, some interesting indications in terms of different views between stakeholder groups were identified as follows:

· The NGO and academic sector differed from the other 2 sectors in that they regarded the participation of SMEs in research and innovation activities as being rather weak, whereas the private and public sectors considered this being rather a strong point in the EU.

· The private and public sectors regarded the investment of the private sector in R&I as a strength, whereas the NGO/academic sectors seem to have considered this rather a weakness.

· And finally, the same pattern was identified for filing patent applications, which was regarded by the private and public sectors rather a strength, in contrast to the other 2 sectors, which were of opposing views.

The second item surveyed the opinion of stakeholders regarding the current innovation capacity of the bio-based industries in the EU. A set of 11 statements was presented in the questionnaire. These statements were considered having a direct or indirect impact on the industrial innovation capacity. Respondents were again asked to rate these statements on a 5 point scale from strongly disagree to strongly agree.

Participants were found to generally disagree with the majority of the statements, and therefore also indicating an overall limited innovation capacity of bio-based Industries in the EU. Taking the responses of all stakeholder groups into account, the most disapproved statements were as follows (see Table 10 and Figure 11):

· Consumers are well informed about benefits and risks associated with bio-based products with 82.2%;

· Bio-based Industries are sufficiently consolidated and integrated (critical mass) across Europe to support the growth of the biorefinery infrastructure with 69.9%;

· Appropriate industry standards, certification systems and labels are in place to create a favorable economic environment for the development of bio-based industries with 68.8%;

· Member state public support mechanisms stimulating large-scale deployment of innovation in the bio-based industries are strong with 68.0%.

However, 2 statements overall received fairly positive ratings from all participants, namely:

· There is good potential to source, in an environmentally sustainable way, other types of non-food feedstocks with 56.9%;

· There is a sufficient availability of traditional feedstock, mainly foodcrops such as maize, wheat, sugar beet or oilseeds in Europe, to support the rapid growth of bio-based industries while assuring food and feed supply with 51.1%.

Generally speaking, under the current circumstances respondents seemed not to have much confidence in the current innovation capacity of the bio-based industries in the EU. This issue was further analyzed in the following sections of this report.

tab. 10 - European bio-based Industries: strengths and weaknesses which may have a direct or indirect impact on the innovation capacity of bio-based industries (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

Bio-based Industries are sufficiently consolidated and integrated (critical mass) across Europe to support the growth of the biorefinery infrastructure || 8,3 || 61,6 || 13,6 || 11,8 || 1,7 || 3,0 || 100,0

There is a sufficient availability of traditional feedstock, mainly foodcrops such as maize, wheat, sugar beet or oilseeds in Europe, to support the rapid growth of bio-based industries while assuring food and feed supply || 8,6 || 21,3 || 13,5 || 21,0 || 30,1 || 5,5 || 100,0

There is good potential to source, in an environmentally sustainable way, other types of non-food feedstocks (e.g. residues from agriculture, forestry and biowaste, lignocellulosic crops) in Europe, supporting the future development of EU bio-based industry || 2,0 || 6,3 || 33,2 || 36,8 || 20,1 || 1,6 || 100,0

Appropriate solutions to ensure an effective biomass supply chain are already in place (e.g. logistics, stable supply contracts) || 11,6 || 31,8 || 39,5 || 13,2 || 1,4 || 2,5 || 100,0

Necessary cross-sectorial collaboration between stakeholders in bio-based value-chains enabling smart and sustainable ways of using biomass is in place || 8,5 || 56,7 || 15,5 || 11,9 || 4,9 || 2,5 || 100,0

EU level public support mechanisms stimulating large-scale deployment of innovation in the bio-based industries are strong || 37,8 || 29,8 || 18,5 || 9,1 || 1,9 || 3,0 || 100,0

Member state public support mechanisms stimulating large-scale deployment of innovation in the bio-based industries are strong || 34,0 || 34,0 || 18,0 || 9,4 || 1,4 || 3,1 || 100,0

Appropriate industry standards, certification systems and labels are in place to create a favourable economic environment for the development of bio-based industries || 8,9 || 59,9 || 13,8 || 10,3 || 2,4 || 4,7 || 100,0

Policy measures and initiatives promoting the use of bio-based products create a favourable environment for the development of local bio-based industries || 9,1 || 52,7 || 15,2 || 13,0 || 6,9 || 3,1 || 100,0

There is a strong and effective integration of measures to protect the environment with measures aimed at the development of bio-based industries || 7,7 || 53,0 || 17,1 || 14,7 || 2,8 || 4,7 || 100,0

Consumers are well informed about benefits and risks associated with bio-based products || 48,7 || 33,5 || 9,4 || 5,6 || ,9 || 1,9 || 100,0

N. B.    = "Strongly agree" plus "Agree" more than "Strongly disagree" plus "Disagree";    ="Strongly disagree" plus "Disagree" more than" Strongly agree" plus "Agree";    ="Neutral" more than 25%

fig. 11 - Actions required for Europe to be successful in enhancing the innovation capacity of the bio-based Industries

(%; strongly disagree + disagree vs. strongly agree + agree)

fig. 12 - Actions required for Europe to be successful in enhancing the innovation capacity of the bio-based Industries

(%; strongly disagree + disagree vs. strongly agree + agree)

Private Sector                                                                                    Academic Sector

 

fig. 13 - Actions required for Europe to be successful in enhancing the innovation capacity of the bio-based Industries

(strongly disagree + disagree vs. strongly agree + agree)

Public Sector                                                                                      NGO Sector

 

Figures 12 and 13 display the opinion of the individual stakeholder groups regarding the 11 statements mentioned. Apart from 2 issues, no major differences between the groups were identified.

The statement “There is a sufficient availability of traditional feedstock, mainly food crops such as maize, wheat, sugar beet or oilseeds in Europe, to support the rapid growth of bio-based industries while assuring food and feed supply” was supported by the majority of respondents of the private and public sector groups, whereas the majority of the academic and NGO groups did not agree with this statement.

Another difference in views between stakeholder groups was found regarding the statement "Appropriate industry standards, certification systems and labels are in place to create a favorable economic environment for the development of bio-based industries". Here, the opinion within the NGO group was equally split between those who agreed and who disagreed (both 30.8%), while respondents of the other 3 groups largely disapproved this statement.

4.           European Added Value

Section C of the questionnaire requested the view of stakeholders on the added value of EU level action on research and innovation for the bio-based industries. Respondents were asked to provide their opinions regarding: 1) the importance of EU level intervention in comparison with other types of interventions and 2) the added value of EU level intervention.

4.1.        The importance of EU level intervention

Participants were asked to provide their opinion concerning the added value of European level intervention in comparison with no public intervention and intervention at regional and/or national level.

According to the replies displayed in table 11, respondents strongly believed that support for research and innovation actions at European level is essential; the statement “An intervention at EU level is needed to help industry address the problems” was supported by 94.3% of all participants. No major differences between stakeholder groups were noted in this regard, although the statement received slightly more support from private and academic stakeholders and slightly less from NGOs and public stakeholders.

In this context also to be noted that some participants from academia with 18.5%, NGO with 15.4% and private stakeholders with 10.2%, expressed support for intervention at regional or national level.

tab. 11 - Tackling the problems (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

Industry alone, without government support, is able to address the relevant problems || 54,5 || 38,7 || 3,4 || 1,7 || ,8 || ,9 || 100,0

An intervention at the level of the regions or of Member States would be sufficient to help industry address the relevant problems || 10,2 || 59,9 || 16,8 || 9,7 || 2,5 || ,9 || 100,0

An intervention at EU level is needed to help industry address the problems || ,8 || 1,1 || 2,5 || 31,0 || 63,3 || 1,3 || 100,0

N. B.    = "Strongly agree" plus "Agree" more than "Strongly disagree" plus "Disagree";  ="Strongly disagree" plus "Disagree" more than" Strongly agree" plus "Agree";   ="Neutral" more than 15%

fig. 14 - Tackling the problems (%; strongly disagree + disagree vs. strongly agree + agree)

fig. 15 - Tackling the problems (%; strongly disagree + disagree vs. strongly agree + agree)

Private Sector

Academic Sector

fig. 16 - Tackling the problems (%; strongly disagree + disagree vs. strongly agree + agree)

Public Sector

NGO Sector

4.2.        Added value of EU level intervention

The next section of the questionnaire aimed to gather stakeholder's views about the potential added value of public intervention at EU level with regard to bio-based industries. The section was composed of 8 statements, which respondents were asked to rate, using a series of 5 points ranging from “Strongly disagree” to “Strongly agree”.

Table 12 and figure 17 respectively provide an overview of the responses received and the results achieved in terms of ranking the 8 statements on the added value of a possible EU intervention. According to the results, all statements listed in the questionnaire were considered by the stakeholders to indeed provide added value, with strongest support for:

· achieving the required level of investment in research and innovation with 93.1%;

· ensuring EU wide cooperation between all relevant stakeholders along the value chains with 92.0%;

· providing improved policy coherence, e.g. in terms of environmental, agricultural and industrial policies with 91.4%;

· promoting non-traditional partnerships (transnational, cross-sectorial) between stakeholders that may otherwise lack opportunities or incentives to collaborate with 90.8%.

The least appreciated statement was identified as “greater mobilization of research efforts in universities and research institutes”, which was supported by the respondents with 61.5%, with 34.3% of them giving a "neutral" answer.

tab. 12 - EU intervention will provide added value in terms of: (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || total

… mobilizing the necessary critical mass required to reach key objectives in a timely way || ,6 || 1,3 || 7,1 || 38,9 || 50,8 || 1,3 || 100,0

… ensuring EU wide cooperation between all relevant stakeholders along the value chains || ,2 || 1,6 || 5,3 || 62,2 || 29,8 || ,9 || 100,0

… promoting non-traditional partnerships (transnational, cross-sectorial) between stakeholders that may otherwise lack opportunities or incentives to collaborate || ,3 || 1,1 || 6,9 || 32,3 || 58,5 || ,9 || 100,0

… contribute to achieving the required level of investment in research and innovation || ,5 || ,8 || 4,7 || 32,0 || 61,1 || ,9 || 100,0

… greater mobilisation of research efforts in universities and research institutes || ,5 || 2,4 || 34,3 || 35,3 || 26,2 || 1,3 || 100,0

… coordination between national policies || ,3 || 1,1 || 9,6 || 60,3 || 26,3 || 2,4 || 100,0

...reduce first mover risk associated with deployment of innovative technologies || ,2 || 1,6 || 8,2 || 27,4 || 58,8 || 3,8 || 100,0

… providing improved policy coherence, e.g. in terms of environmental, agricultural and industrial policies || ,3 || ,9 || 5,5 || 29,5 || 61,9 || 1,9 || 100,0

N. B.    = "Strongly agree" more than " agree" = " Agree" more than " Strongly agree ";   ="Neutral" more than 20%

fig. 17 - EU intervention will provide added value in terms of: (%; strongly agree + agree)

fig. 18 - EU intervention will provide added value in terms of: (%; strongly agree + agree)

differences by stakeholders

5.           Objectives of EU level intervention

Section D of the questionnaire sought stakeholder's views on a range of objectives of EU level intervention. Respondents were asked to rate in 5 steps from “Not important at all” to “Very important” the significance of these 15 objectives, the results of which are summarized in table 13.

According the replies received, the top 5 ranked EU level intervention objectives were as follows:

· facilitate more rapid deployment of promising technologies in pilot, demonstration and "first of its kind" industrial scale plants with 94.2%;

· generate knowledge required for competitiveness of EU industries in the medium and long term with 93.4%;

· promote effective collaboration on research and innovation between all stakeholders along the value chain for greening the industry with 93.3%;

· delivering innovative technologies for the use of biomass in smart and efficient no-waste processes with 92.0%;

· deliver innovative technologies aimed at building stable, competitive and sustainable biomass/biowaste supply chains (e.g. with regard to logistics and integration of supply networks) with 90.6%

The objective of "ensuring that greater emphasis is placed on seeking protection through intellectual property rights when promising results emerge" was the least supported statement by respondents, still receiving a relatively good mark of 64.9%.

With regard to differences between individual stakeholder groups, it was noted that in particular the objective of "reinforcing and effectively utilising the research and innovation potential present in Europe's universities and research centres" showed significantly higher support from academia compared to the public and private sectors. Given the discussions on the innovation "valley of death" in Europe, this could be interpreted as indeed there seems to be a gap between basic and applied research, which closer cooperation between academia and private sectors is expected to overcome.

With regard to differences between stakeholder groups, NGO seemed to consider the following 2 statements as of much lower importance than the other 3 groups:

· "ensure that greater emphasis is placed on seeking protection through intellectual property rights when promising results emerge" was considered by only 23.1% of NGOs as being an important objective of EU level intervention;

· "favour high industrial participation rates in funded projects" was considered important by 46.2% of NGO participants, still considerably lower compared to other stakeholders.

tab. 13 - Objectives of EU level intervention: EU level action on Research and Innovation in connection with bio-based industries should (%)

Items || Not at all important || Unimportant || Neutral || Important || Very important || No opinion || Total

… generate knowledge required for competitiveness of EU industries in the medium and long term || 0,2 || 0,6 || 4,7 || 31,5 || 61,9 || 1,1 || 100,0

… boost EU leadership in technologies for conversion of lignocellulosic biomass and other non-food feedstock such as biowaste || 0,0 || 0,5 || 7,4 || 26,2 || 64,3 || 1,6 || 100,0

… promote effective collaboration between stakeholders to conduct the research and innovation work required to ensure sufficient availability of biomass || 0,0 || 0,6 || 7,8 || 33,7 || 56,7 || 1,2 || 100,0

… promote effective collaboration on research and innovation between all stakeholders along the value chain for greening the industry || 0,0 || 1,3 || 4,9 || 33,4 || 59,9 || 0,5 || 100,0

… promote building projects with greater critical mass || 0,3 || 2,5 || 12,9 || 29,5 || 53,3 || 1,5 || 100,0

… incentivise private sector stakeholders to increase their investment level in R&I || 0,0 || 1,4 || 8,5 || 34,5 || 54,1 || 1,5 || 100,0

… help to build pan-European and cross-sectoral linkages with a view to achieving enhanced innovation success || 0,0 || 1,3 || 29,9 || 37,3 || 29,6 || 1,9 || 100,0

… effectively promote the participation of SME's in funded projects || 0,2 || 1,7 || 11,6 || 53,1 || 32,0 || 1,4 || 100,0

… favour high industrial participation rates in funded projects || 0,2 || 1,4 || 13,2 || 31,8 || 52,4 || 1,0 || 100,0

… reinforce and effectively utilise the research and innovation potential present in Europe's universities and research centres || 0,0 || 0,3 || 31,8 || 32,6 || 33,9 || 1,4 || 100,0

… ensure that greater emphasis is placed on seeking protection through intellectual property rights when promising results emerge || 0,6 || 6,4 || 22,9 || 50,5 || 14,4 || 5,2 || 100,0

… facilitate more rapid deployment of promising technologies in pilot, demonstration and "first of its kind" industrial scale plants. || 0,0 || 0,8 || 3,6 || 23,8 || 70,4 || 1,4 || 100,0

… deliver research and innovation outputs (e.g. related to standards or labels) that can stimulate the growth of the markets for bio-based products || 0,2 || 1,6 || 8,8 || 30,1 || 57,5 || 1,8 || 100,0

… deliver innovative technologies for the use of biomass in smart and efficient no-waste processes || 0,0 || 0,6 || 5,6 || 30,6 || 61,4 || 1,8 || 100,0

… deliver innovative technologies aimed at building stable, competitive and sustainable biomass/biowaste supply chains (e.g. with regard to logistics and integration of supply networks) || 0,0 || 0,9 || 6,9 || 59,9 || 30,7 || 1,6 || 100,0

N. B.    = "Very important" more than " Important"; = " Important" more than "Very important";   ="Neutral" more than 20%

fig. 19 - EU level action on Research and Innovation in connection with bio-based industries should (%; important + very important)

fig. 20 - EU level action on Research and Innovation in connection with bio-based industries should (%; important + very important)

differences by stakeholders

6.           Towards a PPP?

Section E of the questionnaire contained a single question seeking the view of stakeholders regarding the format of a future EU research programme on bio-based industries. It was explained in the questionnaire that compared to the standard management of collaborative research by the European Commission, setting up a PPP would allow for a much greater role of private sector stakeholders in establishing a jointly agreed long-term strategic research agenda with the European Commission. It was furthermore explained that compared to standard collaborative research, a PPP would allow to take on board a greater private sector financial contribution, thus generating additional "leverage" at European level and that different types of PPP structures could be considered.

The vast majority of stakeholders, 86.9%, agreed or strongly agreed that a PPP was the most appropriate mechanism to implement the research and innovation programme for bio-based industries under Horizon 2020 (fig. 21).

fig. 21 - A public-private partnership is the most appropriate mechanism to implement the Research and Innovation Programme for bio-based Industries under Horizon 2020 (%)

The idea that a PPP could be the best solution to foster the implementation of a research and innovation programme was strongly supported by the private sector with 93,2%, followed by academia with 77.7%, the public sector with 69.6% and NGOs with 69.2% (fig. 22).

fig. 22 – Agreement towards PPP per Stakeholders (%)

7.           Impacts

Section F explores the potential impact of EU research and innovation actions - applied in the context of a PPP - on bio-based industries. Specifically, respondents were asked to rate on a 5 point scale from “strongly disagree” to “strongly agree”, their agreement with twelve medium or longer-term socio-economic impacts that one can expect to achieve as a result of an optimal development of the bio-based industries in Europe under the PPP frame.

Considering together “strongly agree” or “agree”, all the items were scored with a mark higher than 80%. This significant result means that interviewees are very favorable to a European research and innovation strategy on the basis of a PPP and they believe that implementing this could produce many favorable outcomes in terms of socio-economic impact (tab. 14).

Participants mostly appreciated the following statements, when they were asked whether research and innovation work done in the context of a PPP:

· will enable a greater use of renewable biomaterials in a wide range of products (92.3%);

· will help to increase overall investments in research and innovation activities in the EU in the sectors concerned (91.4%);

· will help ensure that bio-based industries develop in line with EU objectives on sustainability (90.6%);

· will contribute to the competitiveness of bio-based industries in the EU at a global level (89.5%);

· will contribute to developing technologies that allow the conversion/upgrading of existing plants to use new types of biomass input and / or to manufacture new products (88.7%);

· will help in achieving EU ambitions with regard to bio-based products from biomass in a way that is environmentally sustainable and compatible with food/feed security (88.2%);

· will increase the chances of setting up "first of its kind" industrial scale biorefineries in the EU based on innovative processes (87.7%);

· will contribute to the creation of new jobs in rural and/or coastal areas (85.3%).

The least supported items were:

· will contribute to the creation of new and attractive income streams for farmers, foresters and aquaculture (81.5%) and,

· will help ensure development of bio-based industries in a way that is compatible with food security objectives (82.7%).

Results clearly indicate that the private sector is more confident towards the socio-economic effects of a PPP than the academic and the public sectors: the percentage of “strongly agree + agree” expressed by respondents from the private sector is by far the highest in all the items but one; “will enable a greater use of renewable biomaterials in a wide range of products” received slightly more support from the academic sector (94.3 vs 93.9%).

Tab. 14 - Achievement of Socio-economic Impacts: Research and innovation work done in the context of a PPP on bio-based industries … (%)

Items || Strongly disagree || Disagree || Neutral || Agree || Strongly Agree || No opinion || Total

… will help ensure development of bio-based industries in a way that is compatible with food security objectives || 0,6 || 2,5 || 11,4 || 29,3 || 53,4 || 2,8 || 100,0

… will help ensure that bio-based industries develop in line with EU objectives on sustainability || 0,5 || 2,0 || 5,6 || 36,4 || 54,2 || 1,3 || 100,0

… will contribute to developing technologies that allow the conversion/upgrading of existing plants to use new types of biomass input and / or to manufacture new products || 0,5 || 1,6 || 7,1 || 33,4 || 55,3 || 2,1 || 100,0

… will increase the chances of setting up "first of its kind" industrial scale biorefineries in the EU based on innovative processes || 0,5 || 1,3 || 8,2 || 31,3 || 56,4 || 2,3 || 100,0

… will contribute to the competitiveness of bio-based industries in the EU at a global level || 0,3 || 2,2 || 6,7 || 29,5 || 60,0 || 1,3 || 100,0

… will contribute to the development of more effective biomass supply chains in the EU || 0,5 || 2,5 || 11,0 || 35,0 || 49,4 || 1,6 || 100,0

… will contribute to the creation of new and attractive income streams for farmers, foresters and aquaculture || 0,2 || 2,7 || 13,0 || 29,8 || 51,7 || 2,6 || 100,0

… will contribute to the creation of new jobs in rural and/or coastal areas || 0,3 || 3,0 || 8,6 || 28,1 || 57,2 || 2,8 || 100,0

… will contribute to achieving EU greenhouse gas emission reduction objectives || 0,3 || 3,6 || 10,5 || 28,2 || 55,2 || 2,2 || 100,0

… will enable a greater use of renewable biomaterials in a wide range of products || 0,2 || 0,8 || 5,0 || 26,8 || 65,5 || 1,7 || 100,0

… will help in achieving EU ambitions with regard to bio-based products from biomass in a way that is environmentally sustainable and compatible with food/feed security || 0,6 || 1,7 || 6,7 || 29,9 || 58,3 || 2,8 || 100,0

… will help to increase overall investments in research and innovation activities in the EU in the sectors concerned || 0,2 || 1,6 || 5,6 || 29,0 || 62,4 || 1,4 || 100,0

N. B.    = "Strongly agree" more than 50%;   ="Neutral” more than 10%

Fig. 23 - Achievement of Socio-economic Impacts: Research and innovation work done in the context of a PPP on bio-based industries (%; strongly agree + agree)

Fig. 24 - Achievement of Socio-economic Impacts: Research and innovation work done in the context of a PPP on bio-based industries (%; strongly agree + agree)

differences by stakeholders

Annex 5 - Current and future potential of biomass as a source of materials and energy

This Annex presents some considerations regarding the availability of advanced sustainable biomass resources necessary to achieve the different quantitative targets envisioned for the EU's bio-based industries, in terms of production of materials, fuels and energy. These considerations rely on a number of studies authored e.g. by the European Environmental Agency. It is however important to acknowledge that the sourcing of additional biomass has to be fully compliant with the European agricultural, environmental and renewable energy/biofuels policies. This implies sustainability of agricultural production or forest management, sustainable utilisation of agricultural residues and organic wastes and smart use of marginal and degraded lands for production of dedicated industrial crops. Such considerations would need to be addressed at programme and/or project level, before any implementing actions would be carried out, e.g. in the form of life-cycle assessments.

Furthermore, this annex does not attempt to simultaneously assess whether the biomass flows that are theoretically available can also be mobilised at an economically competitive cost taking into account the current state of technology and other organisational factors.

It should also be noted that according to the National Renewable Energy Action Plans[3] (NREAP) of Member States, the production of biofuels from waste feedstocks and advanced biofuels technologies is not expected to be significant and lower than anticipated, reaching only 2.3 million tonnes of oil equivalent (Mtoe) (approximately 1.5% with double counting) in 2020. The Impact Assessment prepared in the context of amending Directives 98/70/EC and 2009/28/EC to better address indirect-land-use-change reports that the installed capacity for advanced biofuels is currently negligible in the MS, limited to a few pilot plants; it however does not reflect upon future national plans for increasing the industrial capacities to produce advanced biofuels.

Arriving at a substantiated and comprehensive overall view is challenging since it requires aggregating data for a number of sectors which are often considered separately in different studies. Aggregation challenges include (i) combining biomass supply data from agriculture, forestry and waste streams; and (ii) integrating materials and energy potential.

Current status – Use of biomass

Based on the Nova-Institute, an overall estimate of the total amount of biomass used in the EU for energy and material uses was provided[4]. Total use is estimated to amount to 470 million tonnes. This includes biomass from agriculture and biomass, including imported biomass (but not imported biofuels).

The lion's share (400 million tonnes) comes from forestry with an estimated 230 million tonnes of wood used as a "classical" bio-based material for the woodworking and the pulp and paper industries. 170 million tonnes of wood are used for production of energy (mainly heat and power)[5].

The amount of biomass from agriculture, transformed in industrial material and energy is estimated to amount to 70 million tonnes, with energy use (40 million tonnes) estimated to be somewhat larger than material use (30 million tonnes). Obviously, a much larger share of biomass from agriculture (> 90 %) goes into food and feed applications.

Figure 1

Important features to note:

-           In spite of the fact that liquid biofuels are a subject of more active debate, on a weight basis, the use of wood for energy production (mainly heat and power) is estimated to exceed by a factor of > 4 the use of agricultural biomass for energy production.

-           Biofuels are currently mainly produced from agricultural biomass, today mostly foodcrops. The estimated 2010 use of biomass in the EU for liquid biofuel production amounted to approximately 10 million tonnes of oil (of which 6.3 million tonnes are rapeseed oil) and approximately 17,5 million tonnes of starch/sugar crops (sugarbeet >>wheat > corn<other cereals. ).

-           Starch, sugar and oilseed crops are also the most important crops serving as a raw material input for producing industrial materials. According to Carus the estimated 30 million tonnes of agricultural biomass dedicated to the production of materials corresponds to some 16,5 million tonnes of pure starch (10,3 million tonnes), sugar (1 million tonnes), oils (3,1 million tonnes) and fibre (1,8 million tonnes) which are actually used by industry. This is in line with the 30 million tonnes estimated since the remainder of the biomass use represents the residual fractions of the crop.

In addition to European biomass supplies, imported biofuels and biomass (such as wood pellets) contribute to the total[6] and are important for Europe in terms of stabilizing supplies and price levels.

Current status – Production of energy and materials

Biomass contributes about 85 Mtoe (million tonnes of oil equivalent) to the EU energy mix. Biomass is thus by far the single most important source of renewable energy in the EU.[7] (source market observatory energy statistics EU). Renewable sources overall contribute 12.5 % of the EU's total gross energy consumption.

The EU's liquid biofuel production amounted to 12 Mtoe with biodiesel (9,6 Mtoe) well ahead of bioethanol (2.3 Mtoe). The EU production of biofuels in 2010 thus represented appr. 3 % of the 370 Mtoe final energy consumption of the transport sector 370 Mtoe.

Figure 2

When looking at materials use of biomass, wood is by far the most important source of biomass with 230 million tonnes, primarily used in the woodworking and pulp and paper industry.

The amount of agricultural biomass dedicated to industrial material uses is estimated at 30 million tonnes.

-           In the textile sector, the share of bio-based activities is estimated to be around 50 % (based on natural fibres).

-           In the chemical industry, experts estimate that the current share by volume of bio-based inputs in the amounts to approximately 10 % (with a higher fraction for specialty and fine chemicals and a lower fraction for polymers and other bulk chemicals).

-           More specific estimates can be provided for certain specific subcategories of "chemicals": bioplastics (some 0.2 million tonnes or less than 1 % of all plastics), bio-composites (0.35 million tonnes representing some 14 % of all composite materials), bio-lubricants (0.15 million tonnes), bio-solvents (0.63 million tonnes). Bio-surfactants (1.5 million tonnes) represent the largest specific product category.

This short analysis clearly highlights that biomass is already today a very important source of energy and materials, at least when we combine "traditional" and "new" bio-based industries. It further puts in perspective the particular significance of the forestry component in total biomass use. As to the use agricultural crops for industrial applications, striking features are the predominant use of food crops. As of today, "residual" fractions and waste streams are still of very limited relevance in the overall picture of biomass-based energy and materials production.

Perspectives for sustainable growth

An increase in the share of energy and materials derived from biomass by in a 2020 to 2030 timeframe, can be achieved by

-           making more efficient use of biomass resources as they already exist today (e.g. forest resources , agricultural residues and biowaste streams).           

-           producing more and/or different types of biomass e.g. by increasing agricultural productivity, expanding production of specific biomass crops.

Progress will further depend on the state of play with regard to biomass conversion technologies (e.g. making new types of biomass accessible to efficient conversion) and on possibilities to use biomass in a smarter way (e.g. producing multiple products from a single source material).

The echoes of the "food versus fuel" debate sometimes tend to lead to a perception that there is limited or no scope for making greater/better use of biomass for energy and/or materials production. A brief review of several in-depth studies on biomass potential and availability is therefore provided below. All studies conclude that there is significant potential to expand the share of energy and/or materials production from biomass in a 2020 to 2030 timeframe in a sustainable way and without entering into conflict with food and feed security.

Obviously, a number of conditions will need to be met to realize this potential in a sustainable way. Studies differ in their assessment of these conditions, and in the extent to which they have been taken into account. A review of these issues is beyond the ambition of this annex. Amongst the important parameters we can mention: further modernization and efficiency increases in conventional agricultural production and livestock management are essential, effective sustainability frameworks, proper zoning and evolution of agricultural policies.

A range of estimates is available for three major sources of biomass that could support further growth of the bio-based industries as compared to the current status.

A first source of biomass relates to different types of agricultural residues and waste that are currently underutilized. Estimates range from 70 million tonnes to 225 million tonnes in the 2030 timeframe. The lower estimates place strong restrictions on collection of agricultural residues, e.g. for reasons related to protection of soil fertility. In energy equivalent this corresponds to a range from 44 to 141 Mtoe.

So far however, a lack of studies was noted that quantify the biomass potential from agricultural production while taking fully into account current and upcoming EU policies on agriculture and environmental requirements. For instance, the utilisation of straw that otherwise would be incorporated into the soil in all cases reduces the carbon content in the soil. This can reduce soil fertility, which can imply a loss of productivity, water and nutrient retention and thereby overall increased greenhouse gas emissions. Life cycle analyses that compare the greenhouse gas balance of straw utilisation with soil incorporation in a quantitative way are not yet available.

Study || Agricultural Biomass Potential (million tonnes) || Comments

IEA, 2011 low scenario || 90,3 || assuming 10% of residues are collected

IEA, 2011 high scenario || 225,7 || assuming 25% of residues are collected

Elbersen et al., 2012 || 158 || assuming 20% of residues are collected

BNEF, 2012 || 150 || assuming 17.5% of residues are collected

EEA, 2006 || 70 || very high restrictions for straw availability

Panoutsou et al., 2009 || 123 ||

EUBIONET, 2011 || 98 ||

BEE, 2010 low || 73 ||

BEE, 2010 High || 207 ||

RENEW || 134 || Only cereal straw

DBFZ & Oeko Institute, 2010 || 110 || Only cereal straw

EEA, 2012 || 119 || For 2020, in Storyline 1(economy & market first)

de Wit et al., 2010 || 206 ||

Table 1

A second source of biomass relates to additional biomass from sustainable forestry. Compared to an estimated current use of 400 million tonnes, it is estimated that EU forests could sustainably supply between 237 and 342 million tonnes of additional woody biomass (an energy equivalent of between 162 and 233 Mtoe) by 2030.

 Study || Forest Biomass Potential (million tonnes) || Comments

EUWOOD low, 2010 || 625 || the total potential that could be supplied by forests in the EU, regardless whether it is used for material or for energetic use.

EUWOOD high, 2010 || 898

Elbersen et al., 2012 || 342 || Additional potential to exploit

EEA, 2006 || 326

Panoutsou et al., 2009 || 267

EUBIONET, 2011 || 237

BEE, 2010 low || 222 ||

BEE, 2010 High || 514 ||

RENEW || expecting data ||

EEA, 2012 || 330 || For 2020, in Storyline 1(economy & market first)

de Wit et al., 2010 || 750 ||

Table 2

Estimates strongly depend on assumptions related to the quality of forest management, constraints that may apply in terms of biodiversity safeguards as well as on projections with regard to future "conventional" demand for wood (e.g. in the pulp and paper industry).

Potential for increased mobilisation but need for better data: A clear potential to increase forest utilisation for energy exists in most countries of the EU as only 60 – 70% of the annual increment of EU forests is harvested. Much of the potential for expansion can be found in small private holdings, comprising forest residues and complementary fellings, namely first thinnings. The pattern of supply of wood for energy varies widely between countries, but calculations at EU – level on such a potential of wood for energy differ significantly. It will be important to improve the information available about it.

Forest fragmentation has an impact on mobilisation: The average size of forest ownership in the EU is only 12.7 ha in case of private holdings and about 975 ha in case of public holdings. However, there are also considerable differences in the average size of private forest holdings between individual Member States and regions. A further increase in the number of private holdings is expected in several Eastern European countries due to on-going restitution or privatisation processes. In other countries forest holdings may be subdivided, as a rule due to successive inheritances. Fragmented forest ownership structures will be of increasing relevance for the European forest sector, which has an impact on wood mobilisation.

Need to ensure sustainable forest management: For forest based biomass, the principles of Sustainable Forest Management that ensure safeguarding economic, ecological and social functions of forests should apply for forest management activities. The implementation of the new EU Forest Strategy will address this.

A third major source of biomass relates to dedicated production of industrial crops on agricultural land. Estimates for the EU in 2030 vary largely, see table 2.

Study || Agricultural Biomass Potential (million                tonnes) || Comments

EEA, 2006 || 325 || especially for innovative bioenergy crops.

EEA, 2012 || 217 || 16.7 million ha available in 2020 in Storyline 1 (economy & market first)

Elbersen et al., 2012 || 234 || 18.8 million ha in 2030, reference scenario - Biomass Futures project

 Fischer et al., 2010 || 575 || Agricultural land potentially available for growing biofuel feedstocks in 2030: EU27 & Ukraine/ LU-Env scenario: 44.2 million ha

Table 3

Net land availability for dedicated industrial crops depends strongly on various policies and trends (e.g. agricultural and environmental policies, international trade), time-frame and geographical scope. Assuming steady improvements in agricultural management, in line with what has been historically achieved, and measures to ensure compliance with sustainability criteria, industrial crops can be expected to represent a large resource category.

A consolidated picture then emerges, indicating that in addition to current uses of biomass, some 100 million tonnes of agricultural residues + 300 million tonnes of forest material + 250 million tonnes of biomass from industrial crops could serve as sustainable feedstock for new bio-based industries. This represents a total of 650 million tonnes. This figure however needs to be ascertained through further research addressing the potential of producing industrial crops in dependence of EU sustainability criteria and policies.

The industry vision document aims for 30 % of all chemicals to be bio-based by 2030. Taking into account that the current share is approximately at 10 %, this would mean that biomass use for production of chemicals will need to be multiplied by a factor of approximately 3. Today's production of chemicals is primarily derived from food crops, with an estimated use of less than 30 million tonnes (this figures includes textiles). Extrapolating from the current status (and assuming the use of food crops is maintained at the current level) we can thus estimate that allocating around 60 million tonnes or only 10 % of the "additional biomass potential" to industrial materials uses should go a long way in supporting the projected transformation of the chemical industry to much greater use of bio-based resources. This overall estimate makes abstraction of specific types of biomass available and is obviously based on the assumption that suitable conversion processes will be developed for the types of biomass that is actually available.

If "industrial materials" targets can be reached with 60 million tonnes, close to 600 million tonnes of biomass could be left for energy related uses over and above current energy uses. This could represent an energy equivalent of 376.8 Mtoe. With projected transport fuel consumption in 2030 at around 400 Mtoe, biomass availability per se is not an obstacle to reach 100 Mtoe or a 25 % contribution of advanced biofuels to the transport fuel mix, thereby liberating the 30 million tonnes of agricultural materials currently dedicated to first generation biofuels. In fact, an additional 276.8 Mtoe could remain available to expand other types of energy uses. Non biofuel energy uses (e.g. production of electricity and heat, mainly based on wood resources) are estimated to amount to approximately 73 Mtoe today and could thus be expanded to reach well over 300 Mtoe. Biomass could thus support a total energy production (fuel + non-fuel) of around 400 Mtoe by 2030. EU total energy consumption (now 1703 Mtoe) is expected to remain constant or to decline in overall terms; hence a contribution of around 25 % renewable energy derived from biomass appears within reach from the perspective of theoretical sustainable biomass supply potential.

Economic factors such as cost of mobilising certain types of biomass and the availability of capital for the rapid development of biorefinery infrastructure are likely to lead to a growth scenario under which the theoretical potential of available biomass will not be exhausted in the foreseeable future.

Annex 6– Overview of research and innovation at regional and national level

Germany

The BioEconomy Research and Technology Council (BioÖkonomieRat[8]), was founded jointly by the German Ministry of Education and Research and the Ministry of Food, Agriculture and Consumer Protection, and is an independent advisory body to the German government for all matters relating to bioeconomy. The Council is made up of experts from university and non-university research institutes, the federal government’s own departmental research, and from research in the private sector. The mission of the BioEconomy Council is to improve parameters, accelerate the development of innovative technologies, and identify the need for future research. Another task of the Council is to analyse the strategic goals of Germany as a whole, the individual Regions, as well as those set within the EU and other international partner countries. The BioEconomy Council’s first term has been set at three years, and is supported by an office in Berlin.

The concrete aims of the BioEconomy Council are:

· To offer an overview of the opportunities and prospects of the bio-economy in Germany;

· To deliver scientifically-based recommendations for measures to improve parameters;

· To develop scenarios to create parameters for research, education and training, and student support;

· To help strengthen networks of relevant actors from science, business and politics with a view to achieving maximum harmonisation on strategic questions.

In 2010, the Council published its analytical “Bio-economy Innovation Report[9]”, placing emphasis on increasing biomass yield volumes and more efficient production processes in the food and energy sectors. Meanwhile, also two reports with recommendations were published: the report “Combine disciplines, improve parameters, seek out international partnership[10]” suggested for a restructuring of research funding and recommended incentive systems for private investment, and in the report “Priorities in Bio-economic Research[11]”), the BioEconomy Council defined the priorities with regard to relevance and urgency of the research topics. The Council has recently been very critical towards the focus on bioenergy alone, arguing for more actions on behalf of industrial biomass use[12].

Germany also developed an “Action plan for the industrial use of renewable raw materials[13]”.

In 2007, the German Federal Ministry of Education and Research initiated the creation of five German regional industrial biotech clusters. Among these clusters is CLIB2021[14] (cofounded by the Ministry of Innovation, Science and Research of the German State of NRW) with 32 founding members. Since then the cluster grew to include more than 70 academic institutes, companies and investors, launched R&D projects with a total volume of 50 million Euros, founded 5 start-ups and attracted 10% international members. Another cluster is BioM WB[15] with two demonstration plants for cellulosic ethanol and acetic acid, a new multi-purpose pilot plant for and a degree programme of industrial biotechnology at the Technical University of Munich.

In order to develop visions for the next generation of biotechnological processes and their realization, the German Federal Ministry of Education and Research (BMBF) has started in 2010 a common and longterm (over the next 10-15 years) strategy process together with German Research Organisations (Max-Planck-Gesellschaft, Fraunhofer-Gesellschaft, Helmholtz-Gemeinschaft and Leibniz-Gemeinschaft) and German Universities. The cooperation of the research organisations has been documented in a Memorandum of Understanding. This strategy process is accompanied and advised by a newly founded coordination committee, in which all partners are represented. This strategy process brings the German research organisations, universities and ministry of education and research together to a common dialogue. Expert discussion meetings, a yearly congress and a website[16] describing a national competence map and the progress of this strategy process have been created to assist the strategy process. In addition a new research price has been installed this year, which will stimulate promising researchers, because they can apply for the creation and financing of their own independent research group for up to five years if successful. It is by the cooperation of all relevant drivers from science, industry and politics in the framework of this strategy process, by which a roadmap will be developed describing the most important scientific and technological milestones. This will form the base for future funding initiatives, which will accelerate the development of a next generation of biotechnological processes.

The Netherlands

In the Netherlands, the previous Cabinet of Economic Affairs, Agriculture and Innovation has decided that the biobased economy is one of the strong emerging economic pillars to be supported. The development of the national strategy was the result of an on-going interaction between business, society, and science, stimulated by policy makers. In April 2012, the Cabinet presented a mid- and longterm vision and strategy for the biobased economy[17]. Also the new Cabinet “Rutte 2” has taken up the biobased economy as one of the priority themes.

The innovation contract biobased economy is a joint agenda developed by the industry and the research organisations. It contains 6 working packages, each covering the entire innovation chain (from more basic research to valorisation). ‘Biobased materials’ is one of the working packages. In total more than 100 companies will participate in the projects, and have committed more than EUR 200 million[18].

BE-Basic[19] (Biobased Ecologically Balanced Sustainable Industrial Chemistry) is a public-private partnership that develops industrial biobased solutions for a sustainable society, and has an R&D budget of more than EUR 120 million. Half of this is funded by the Ministry of Economic Affairs, Agriculture and Innovation. BE-Basic was founded early 2010, and puts its international focus into practice through strategic partnerships in a selected number of countries: Brazil, Malaysia, the US and Vietnam.

Sweden

In February 2012, the Swedish Government prepared a “Swedish Research and Innovation Strategy for a Biobased Economy[20]”. The following research and development needs were defined: the replacement of fossil-based raw materials with biobased raw materials, smarter products and smarter use of raw materials, change in consumption habits and attitude and prioritisation and choice of measures (e.g. environmental consequences, socio-economic consequences, governing policies).

France

In 2005, the French General Directorate for Competitiveness, Industry and Services has created the so-called Competitiveness clusters, an initiative that brings together companies, research centers and educational institutions in order to develop synergies and cooperative efforts. The French Government accompanies cluster development by allocating financial support for the best R&D and innovation platform initiatives via calls for projects or by seeking assistance from local authorities, who can also provide financial support for cluster projects (R&D, innovation platforms). One of the clusters is the “Industries and Agro-Resources” Cluster or IAR[21]. This cluster unites stakeholders from research, higher education, industry and agriculture in the Champagne-Ardenne and Picardy regions of France around a shared goal: the value-added non-food exploitation of plant biomass. In order to achieve this ambitious objective, the IAR cluster has defined four strategic fields of activity around the biorefinery concept: bioenergy, biomaterials, biomolecules, and green ingredients. A large number of international-scale R&D projects have already been launched covering the four target markets. A special relationship has been build up with several international clusters in Canada, Finland, Hungary and elsewhere.

UK

In the UK, the Technology Strategy Board has created an Industrial Biotechnology Special Interest Group (IB-SIG) to operate across its networks to implement the recommendations of the 2009 Industrial Biotechnology Innovation and Growth Team[22].

Also in the UK, the “Integrated Biorefining Research and Technology Club (IBTI Club)” was launched in 2009. This group consists of a research and technology partnership involving the Biotechnology and Biological Sciences Research Council, the Engineering and Physical Sciences Research Council, Industry and the Bioscience for Business Knowledge Transfer Network (KTN). The club will interface with the KTN's wider Integrated Biorefinery Technologies Initiative (IBTI) and will invest around GBP 6 million in industrially relevant, innovative, basic biological, chemical and engineering research in biorefining technologies.

Norway

In Norway, an official “Norwegian Industrial Biotech Network[23]” has been set up mid-2012. The main objective of the Industrial Biotech Network is to stimulate innovation through partnerships and dissemination of knowledge. The network will connect academia and industry across research disciplines, industry sectors and geography. The network is the result of a joint initiative by Innovation Norway, The Research Council of Norway, and SIVA[24].

In February 2011, a memorandum of understanding was signed between Innovation Norway and the Technology Strategy Board in the UK. This collaboration agreement intends to foster transnational collaboration between industries and research institutions in the area of industrial biotechnology and biorefining. Beginning of 2012, it was decided to work together to support nine new research and development projects that will create innovative processes to generate high-value chemicals through industrial biotechnology and biorefining. The UK Technology Strategy Board has offered grant funding totalling GBP 1.82 million to the nine UK-led projects (four full-scale collaborative R&D projects and five feasibility projects) and four of these will also be supported by Innovation Norway, which is providing additional funding of GBP 400,000 to the Norwegian businesses that are taking part. The projects will look at how industrial biotechnology and/or biorefining can be competitively applied to the production of high value chemicals and will see collaboration between industrial biotechnology developers, higher education institutions and the chemicals sector.

Finland

Also Finland has not yet an official bioeconomy strategy yet, but the authorities are working on an official strategy. In 2011, SITRA (the Finnish Innovation Fund) prepared a report “Sustainable Bioeconomy: Potential, Challenges and Opportunities in Finland[25]”. The study claims that the market for small-scale solutions is large, which provides a basis for mass-production of bio-economic solutions. The side benefits can be identified and measured. A fully integrated solution creates a hybrid where different systems complement each other, thereby increasing the profitability of the investment. In addition, a system consisting of many small production plants is highly reliable. Functional modularisation provides economies of scale and adaptability which can be turned into a business-driven offering. Last but not least, the capability to develop, design, deliver and operate bioeconomic solutions can be exported.

Also in Finland, the BioRefine 2007-2012 programme of TEKES has allocated 137 million Euro to the development of innovative technologies, products and services related to biorefineries and the processing of biomass in general for the international market.

Denmark

Denmark has implemented a national bioeconomy strategy, via the 2009 agreement on Green Growth[26]. The purpose of the Agreement is to ensure that a high level of environmental, nature and climate protection goes hand in hand with modern and competitive agriculture and food industries. A total of 1.8 billion EUR funding until 2015 is foreseen, which is a 50% increase compared to previous initiatives.

Italy

Since the launch of the EU Bioeconomy Strategy, the Minister of Economic Development has set up a working group on green chemistry with the aim of starting at a national level the elaboration of possible national strategy. In May 2012 the Minister of Innovation launched a call for implementing clusters focused on top innovative sectors for the country and one of them is green chemistry.

Ireland

Already in 2008, Ireland published its Foresight Report “Towards 2030 – Teagasc’s Role in Transforming Ireland’s Agri-Food Sector and the Wider Bioeconomy[27]”. The four pillars are: food production and processing, value-added food processing, agri-environmental products and services, and energy and bio-processing. In addition, in 2009 the Irish High-Level Group on Green Enterprise published “Developing the Green Economy in Ireland[28] ”. The key actions of the “Green Economy” strategy are:

· Promote green sectors that drive exports and job creation (e.g. renewable energy, energy efficiency and management, waste management, water/wastewater);

· Deliver green zones and a green international financial services sector (IFSC[29]);

· Create world-class research centres and human capital;

· Remove hurdles to the development of the green economy (e.g. technical, regulatory and planning barriers to the development of renewable energy projects; implementing green public procurement in Ireland; ensuring that green firms can access finance and developing Ireland’s brand).

Belgium

In Flanders, an interdepartmental working group started first half of 2012 to develop a regional vision and strategy for the biobased economy. A study was performed to to support the Government of Flanders in developing its own strategy for a biobased economy and to draft recommendations for an integrated and sustainable economic innovation policy. In order to develop this strategy, Flanders’ assets were identified and used as the basis for defining policy choices. Key objective is to see how Flanders can optimally use its positive starting position with a strong chemical industry, a limited (in terms of surface area) but highly intensive agricultural and horticultural and thus likewise food industry, and a high population density with large and well-managed waste streams, in the transition to a sustainable biobased economy.

Annex 7 – Example of a regional bioeconomy cluster moving up-scaling activities outside the EU[30]

The bio-based industries have a strong foothold in Bazancourt-Pomacle, in the North-East of France. Driven by a number of large agricultural cooperatives and well embedded in the strong Industry and Agro-Resources (IAR) bioeconomy cluster, an impressive site integrating several biorefineries has developed. The site harbours sugar industry, starch industry, ethanol production, production of cosmetic ingredients and a cogeneration plant. A lot of synergies between these activities are being exploited. For more than 20 years, the cooperatives and industries active on this site have jointly developed ARD, a research enterprise with approximately 100 employees now. ARD aims to develop innovation for the bio-based industries and to bring it to market.

ARD decided in 2008 to build a 2000 tonne demonstration plant for innovative bio-based processes (BIODEMO). This represented a total investment of € 22 million of which € 17 million were privately funded and € 5 million were obtained from public funding (€ 2.5 million regional and € 2.5 million from the European Fund for Regional Development). This decision was made in the context of a partnership with an American technology company to develop an innovative process for the production of bio-based succinic acid, which is an important building block for the chemical industry. The research was successful. A bio-based manufacturing process was developed and optimised. It was shown to be economically competitive and to bring significant sustainability benefits.

Nevertheless, hopes to see the construction of a flagship type facility at industrial scale on site failed to materialise. The partners concluded a joint venture with Mitsui & Co. They were attracted to Ontario (Canada), apparently due to substantial levels of public funding. The government of this province explains on its website, that it granted about Canadian $ 35 million in "loans and subsidies" on a total investment of C$ 80 million. A facility with a projected capacity of 34,000 tonnes bio-based succinic acid is now reported to be under construction in Sarnia, Ontario. Europe thus misses out on an opportunity to bring the results of its successful research and demonstration work to commercial fruition on EU territory.

Annex 8 – Definition of Technology Readiness Levels (TRLs)

Technology Readiness Levels (TRLs) are used to define the different research and innovation (R&I) steps from fundamental research to the commercialisation of a product. Financing instruments for R&I activities may focus on certain ranges of TRLs, e.g. Horizon 2020 on TRLs from 1 to 8, see Figure below.

Definition of TRL levels:

– TRL 1 Basic principles observed and reported: Transition from scientific research to applied research. Essential characteristics and behaviors of systems and architectures. Descriptive tools are mathematical formulations or algorithms.

– TRL 2 Technology concept and/or application formulated: Applied research. Theory and scientific principles are focused on specific application area to define the concept. Characteristics of the application are described. Analytical tools are developed for simulation or analysis of the application.

– TRL 3 Analytical and experimental critical function and/or characteristic proof-of concept: Proof of concept validation. Active Research and Development (R&D) is initiated with analytical and laboratory studies. Demonstration of technical feasibility using breadboard or brassboard implementations that are exercised with representative data.

– TRL 4 Component/subsystem validation in laboratory environment: Standalone prototyping implementation and test. Integration of technology elements. Experiments with full-scale problems or data sets.

– TRL 5 System/subsystem/component validation in relevant environment: Thorough testing of prototyping in representative environment. Basic technology elements integrated with reasonably realistic supporting elements. Prototyping implementations conform to target environment and interfaces.

– TRL 6 System/subsystem model or prototyping demonstration in a relevant end-to-end environment (ground or space): Prototyping implementations on full-scale realistic problems. Partially integrated with existing systems. Limited documentation available. Engineering feasibility fully demonstrated in actual system application.

– TRL 7 System prototyping demonstration in an operational environment (ground or space): System prototyping demonstration in operational environment. System is at or near scale of the operational system, with most functions available for demonstration and test. Well integrated with collateral and ancillary systems. Limited documentation available.

– TRL 8 Actual system completed and "mission qualified" through test and demonstration in an operational environment (ground or space): End of system development. Fully integrated with operational hardware and software systems. Most user documentation, training documentation, and maintenance documentation completed. All functionality tested in simulated and operational scenarios. Verification and Validation (V&V) completed.

– TRL 9 Actual system "mission proven" through successful mission operations (ground or space): Fully integrated with operational hardware/software systems. Actual system has been thoroughly demonstrated and tested in its operational environment. All documentation completed. Successful operational experience. Sustaining engineering support in place.

Annex 9 – Detailed description of the specific objectives and link to wider policy context

Specific objectives || Operational objectives/results

Up-scale and validate at demonstration scale entirely new building blocks for the chemical industry produced from biomass of European origin. || By 2020: 5 new building blocks, to be increased to 10 by 2030)

Develop new bio-based materials (e.g. specialty fibres, plastics, composites and packaging solutions), which either substitute existing petro-chemical materials or offer entirely new characteristics and functionalities. || By 2020: 50 new bio-based materials

Demonstrate new, close to the market consumer products (advanced prototypes) that have been enabled by using bio-based chemicals and materials. || By 2020: 30 new consumer products

Set up flagship biorefinery plants for the production of new bio-based materials, chemicals and fuels from the PPP, which have proven to be close to cost-competitive to comparable fossil-based production plants. || By 2020: At least 5 flagship biorefinery plants (at least one per bio-based value chain, see above).

Establish new bio-based value chains, which will integrate players along the whole value chain. They will ensure sufficient supply of sustainable feedstock, develop conversion solutions for the transformation of the biomass, up-scale these conversion processes to commercial scale, develop new bio-based products, and support the uptake of these products by consumer markets. || By 2020: 10 new bio-based value chains

Create new cross-sector interconnections in bioeconomy clusters (new bridges creating cooperation between nine different sectors, i.e. farmers, agrofood industry, horticulture, forestry, pulp and paper, chemicals, pharmaceuticals, materials, fuel/energy)) || By 2020: 36 new cross sector interconnections

Support cooperation projects through cross-industry clusters. || By 2020: >200 projects

The implementation of the specific objectives of the proposed Bio-based PPP will directly or indirectly contribute towards reaching a number of strategic medium- to long-term EU policy objectives.

In an attempt to link its specific objectives to the policy objectives, industry formulated a number of additional indicative objectives in the SIRA. These objectives have not been addressed in the Impact Assessment since they are likely to be subject to change in line with EU policy developments. Furthermore, their completion will not solely depend on the PPP's activities and progress would therefore be difficult to monitor.

Industry objectives || Indicative operational objectives/results

Help to guarantee a secure and sustainable supply of lingo-cellulosic biomass (including waste) for European biorefineries through the development of integrated and sustainable agricultural and forestry value chains ||

Contribute to valorising better currently underutilised or not used agricultural land by improving its utilisation or putting it back into production. ||

Contribute to increasing the current biomass supply in Europe by enhancing productivity and mobilisation in a sustainable manner while making best use of innovations in agriculture and forestry practices. ||

Stimulate the mobilisation and utilisation of currently unused by-products and wastes from various bio-based sources (e.g. agriculture, forestry, waste water treatment, sludge, organic household waste, yard waste, food processing waste, debarking waste). || By 2020: 15% in the total amount of waste used By 2030: 25%

Contribute to maintaining and further developing a competitive and knowledge intensive rural economy in Europe based on biorefineries, which results in new, higher and more diversified revenues to farmers and cooperatives and creating new skilled jobs of which more than 80% will be in rural and today underdeveloped areas || By 2020: up to 400.000 new skilled jobs created by PPP By 2030: 700.000

Contribute to protein isolation and valorisation from additional biomass processing, that will result in 15% reduced import of protein (e.g. soy) for feed in Europe in 2020 (50% by 2030). || By 2020: 15% reduction in protein import for feed By 2030: 50%

Optimise soil fertility programmes including recovery and use of phosphate and potash, leading to reduced import of those components for fertilizers applied to feedstock production. || By 2020: 10% reduction in fertiliser component imports By 2030: 25%

Contribute to and trigger industrial deployment of bio-based chemicals, biomaterials and advanced biofuels, to: ||

· Increase the share of bio-based production of chemicals and materials in Europe. The share today is of 10% || By 2020: 20% By 2030: 30%

· Ensure that there is a share of sustainable advanced biofuels in European fuel mix. || By 2020: 2% By 2030: 25%

· Realise first-of-their-kind flagship plants to optimise biomass conversion technology and ensure price-competitiveness for a second wave of commercial production to kick-in. || From 2017: 5 flagship plants

Contribute to the ambition that in 2020, the market supplied by bio-based polymers and composites at comparable quality-price ratio compared to the fossil alternatives will be 5 times higher than today (factor 10 in 2030. || By 2020: 5x higher market supplied By 2030: 10x

Annex 10 – Examples illustrating the potential socio-economic impact of a option i-PPP

1.           Examples of flagship biorefinery plants from the SIRA (see Annex 3) [31]

Example 1: Direct economic impact of a successful flagship biorefinery plant processing 1.3 million tonnes of forest material (value chain 2)

Outputs: High value fibers for textiles, bio-plastics, green power

Projected annual turnover: € 176 million

Projected annual feedstock cost: € 64 million, i.e. € 50 million revenue to primary  producers and € 14 million transport costs

Jobs (recurring): 440

Example 2: Direct economic impact of a successful flagship biorefinery plant processing 1 million tonnes of biomass (value chain 5)

Investment: € 120 million

Outputs: Green power, cellulose fibers, chemicals.       

Projected annual turnover: € 145 million

Projected annual feedstock costs: € 100 million, i.e. € 80 million revenue to primary producers and € 20 million transport cost.

Jobs (recurring): 35

2.           EU annual economic potential for advanced bioethanol through replication of a successful bio-ethanol flagship plant

Feedstock: 225 million tonnes of agricultural & forestry residues and biomass fractions of municipal waste, sustainably mobilised.

Output: 75 billion litres of ethanol (energy equivalent of 10 % of current EU transport energy consumption).

Trade balance impact: Savings in EU gasoline importation of € 26 billion.

Infrastructure: 788 biorefineries across the EU (near biomass sources), representing a total investment of € 74 billion.

Jobs: 124.000 (peak associated with construction of biorefineries) levelling off to 87.000 in residue collection, transport to biorefinery and biorefinery operations

Farmer revenue potential: € 15 billion

3.           Social impact of competitiveness in the bio-based segment of the chemical industry

European chemical industry in 2010 realised total sales of € 491 billion[32]. Extrapolating from total sectoral employment, bio-based chemical sales of € 50 billion can be estimated to involve 120.000 direct and 340.000 total jobs. The vision paper prepared by the industry group backing the Bio-based PPP aims to increase the share of bio-based chemicals from 10 to 30 % by 2030.

These basic Figures help to define a key challenge for the EU chemical industry: How to be a leader in the high growth bio-based segment, creating jobs in Europe to transform biomass grown in Europe into high-added value products with good prospects on the global markets. From 2011 to 2030, 20 % of the chemical industry business, corresponding today to some € 100 billion in revenue, will shift from fossil-based to bio-based. It is crucial for the competitiveness of the EU chemical industry to develop a position of strength in this market segment in order to maintain or grow its share in the domestic and global markets. Over the period from now to 2030, the difference between a position of leadership or a position of relative weakness will obviously have a major impact on the EU chemical industry's revenue and employment.

The impact on EU agriculture and forestry will also be substantial. Feedstock costs in a typical biorefinery are estimated to amount to between 25 and 40 % of final product value[33]. Taking 25 % of an estimated € 100 billion new bio-based product market value in 2030 (at 2010 prices) would then imply feedstock costs of € 25 billion. Allowing 20 % of this amount for transportation and logistics of the biomass supply chain, this could well represent around € 7.5 billion in revenue potential for EU farmers and foresters. This corresponds to >1 % of the total 2010 revenue for agriculture and forestry/wood combined and to >12 % of the support level provided by the EU's Common Agricultural Policy (with a total cost of € 55 billion).[34]

Annex 11 – Bibliography of the Impact Assessment

EU documents:

· European Court of Auditors (2013) Special Report 2: Has the Commission ensured efficient implementation of the Seventh Framework Programme for Research? http://eca.europa.eu/portal/pls/portal/docs/1/22482779.PDF

· MEMO/12/989 http://europa.eu/rapid/press-release_MEMO-12-989_en.htm

· DG COMP Seminar on State Aids January 2013

· COM(2012) 710 – Decision on a General Union Environment Action Programme to 2020 “Living well, within the limits of our planet” http://ec.europa.eu/environment/newprg/pdf/7EAP_Proposal/en.pdf

· COM(2012) 595 – Amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion of the use of energy from renewable sources http://ec.europa.eu/clima/policies/transport/fuel/docs/com_2012_595_en.pdf

· COM(2012) 582 – Communication “A Stronger European Industry for Growth and Economic Recovery” http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0582:FIN:EN:PDF

· COM(2012) 79 – Communication “on the European Innovation Partnership 'Agricultural Productivity and Sustainability' ” http://ec.europa.eu/agriculture/eip/pdf/com2012-79_en.pdf

· COM(2012) 60 – Communication “Innovating for Sustainable Growth: A Bioeconomy for Europe” http://ec.europa.eu/research/bioeconomy/pdf/201202_innovating_sustainable_growth.pdf

· SWD(2012)11 – Commission staff working document accompanying the COM(2012)60, "Communication on Innovating for Sustainable Growth: A Bioeconomy for Europe" http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2012:0011:FIN:EN:PDF

· CDR1112-2012 – Working Document of the Commission for Education, Youth, Culture and Research " Innovating for Sustainable Growth: A Bioeconomy for Europe " http://cor.europa.eu/en/activities/stakeholders/Documents/working-document-educ-v-024.pdf

· DG RTD (2012) Roadmap for a Joint Technology Initiative in the field of Bio-based industries http://ec.europa.eu/governance/impact/planned_ia/docs/2013_rtd_007_biobased_industries_en.pdf

· DG REGIO (2012) Connecting Smart and Sustainable Growth through Smart Specialisation: A practical guide for ERDF managing authorities http://ec.europa.eu/regional_policy/sources/docgener/presenta/green_growth/greengrowth.pdf

· Public Consultation on "Bio-based industries, towards a public-private partnership under Horizon 2020?" http://ec.europa.eu/research/consultations/bio_based_h2020/consultation_en.htm

· Conference “Partnering for the Bioeconomy in European Regions” co-organised by DG RTD and the Committee of the Regions (CoR) on 12 October 2012 at the CoR, Brussels Belgium www.eurosfaire.prd.fr/.../1347636965_designed_programme_14_se...

· COM(2011) 809 – Proposal for a regulation establishing Horizon 2020 “The Framework Programme for Research and Innovation (2014-2020) ” http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0809:FIN:en:PDF

· COM(2011) 808 – Communication “Horizon 2020 - The Framework Programme for Research and Innovation” http://ec.europa.eu/research/horizon2020/pdf/proposals/com(2011)_808_final.pdf

· COM(2011) 572 – Communication “Partnering in Research and Innovation”  http://ec.europa.eu/research/era/pdf/partnering_communication.pdf

· COM(2011) 244 – Communication “Our life insurance, our natural capital: an EU biodiversity strategy to 2020” http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/2020/1_EN_ACT_part1_v7[1].pdf

· COM(2011) 112– Communication “A Roadmap for moving to a competitive low carbon economy in 2050” http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0112:FIN:en:PDF

· SEC(2011) 1427 – Impact Assessment Accompanying the Communication from the Commission “ Horizon 2020 - The Framework Programme for Research and Innovation” http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2011/1427/COM_SEC(2011)1427_EN.pdf

· Public consultation “Bio-based economy for Europe: state of play and future potential” from 22 February to 2 May 2011 http://ec.europa.eu/research/consultations/bioeconomy/consultation_en.htm

· DG RTD Expert Group (2011) First interim evaluation of the Fuel Cell and Hydrogen JU, Expert Group Report 24862 http://www.gppq.fct.pt/_7pq/_docs/brochuras/online/EvalFuelCellHydroReport2011_ALLBROCHUREWEB.pdf

· DG RTD Expert Group (2011) First interim evaluation of the Fuel Cell and Hydrogen JU, Expert Group Report 24862

· European Industrial Bioenergy Initiative (EIBI) (2011) “Boosting the contribution of Bioenergy to the EU climate and energy ambitions Implementation Plan 2010 – 2012” http://ec.europa.eu/energy/technology/initiatives/doc/implementation_plan_2010_2012_eii_bioenergy.pdf

· DG ENER (2011) Key Figures – Market Observatory for Energy – June 2011

· Eurostat (2011) http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Climate_change_statistics

· Designing together the “ideal house’ for public-private partnerships in European research JTI Sherpas” Group Final Report 2010 http://ec.europa.eu/invest-in-research/pdf/workshop/amanatidou_h2.pdf

· DG RTD (2010) Biotechnologies panel report, Food Agriculture and Biotechnology 25/02/2011 prepared in the context of the impact assessment of Framework Programme Activities in FAFB.

· DG RTD Expert Group (2010) Interim Evaluation of the Seventh Framework Programme http://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/fp7_interim_evaluation_expert_group_report.pdf

· DG ENTR (2009) Taking Bio-based from Promise to the Market – A report from the Ad-hoc Advisory Group for Bio-based Products in the framework of the European Commission’s Lead Market Initiative http://ec.europa.eu/enterprise/sectors/biotechnology/files/docs/bio_based_from_promise_to_market_en.pdf

· Directive 2009/30/EC amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0088:0113:EN:PDF

· Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=Oj:L:2009:140:0016:0062:en:PDF

· COM(2008) 468 – Communication vers une programmation conjointe de la recherche “Travailler ensemble pour relever plus efficacement les défis communs” http://ec.europa.eu/research/press/2008/pdf/com_2008_468_fr.pdf

· COM(2007) 860 – Communication “A lead market initiative for Europe” http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0860:FIN:en:PDF

· FP7 Ex-ante Impact Assessment (SEC(2005)430) http://cordis.europa.eu/documents/documentlibrary/72661491EN6.pdf

· Directive 2003/30/EC http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:123:0042:0042:EN:PDF

Other documents:

· BIC (2012) Biobased for Growth – A public-private partnership on biobased industries http://www.biobasedeconomy.nl/wp-content/uploads/2012/07/Bio-Based-Industries-PPP-Vision-doc

· Bloomberg New Energy Finance (2010) Next-generation ethanol and biochemicals: What's in it for Europe http://www.novozymes.com/en/sustainability/benefits-for-the-world/biobased-economy/white-papers-on-biofuels/Documents/2010%20-%20Bloomberg%20-%20Next-generation%20ethanol%20and%20biochemicals%20what's%20in%20it%20for%20Europe.pdf

· Burill & Company (2012) Biotech 2012: Innovating in the New Austerity; Burill & Company's 26th Annual Report on the Life Science Industry http://www.burrillandco.com/content/news/PR-April%202012-final.pdf

· CEFIC (2012) The European chemical industry in worldwide perspective Facts and Figures 2012 http://www.cefic.org/Documents/FactsAndFigures/2012/Facts-and-Figures-2012-The-Brochure.pdf

· CEFIC (2011) Annual Report 2011 “The chemical industry in Europe: Towards Sustainability” http://www.cefic.org/Documents/Learn%20and%20Share/Cefic_Sutainability_Report2011-2012.pdf

· Coyle, W. (2010) The Future of Biofuels: A Global Perspective, Economic Research Service, USDA http://aoatools.aua.gr/pilotec/files/bibliography/Future%20of%20Biofuels-0572659200/Future%20of%20Biofuels.pdf

· Dalberg (2011) Biorefinery Feasibility Study http://www.europabio.org/industrial/press/bridging-gap-between-research-and-market

· EPO (2012) Analysis of EPO data on industrial biotechnology patents provided by Novozymes

· Festel, G. (2011) Presentation at the 4th Annual European Forum for Industrial Biotechnology & The Biobased Economy, Amsterdam, 20 October 2011 www.efibforum.com/Core/DownloadDoc.aspx?documentID=9007

· Futuris (2012) Supporting the set-up of industrial demonstrators in Europe - Position paper

· Hermann, Blok and Patel, Producing Bio-based bulk chemicals. Using industrial biotechnology saves energy and combats climate change. Environ. Sci. Technol. 2007, 41, 7915-7921 http://igitur-archive.library.uu.nl/chem/2008-0416-200513/NWS-E-2007-187.pdf

· Inman, M. (2013) The true cost of fossil fuels, Scientific American, April 2013

· Mantau, U. (2012) Wood Flows in Europe www.cepi.org/system/.../2012/CEPIWoodFlowsinEurope2012.pdf

· McKinsey (2009) http://www.dsm.com/en_US/downloads/sustainability/white_biotech_mckinsey_feb_2009.pdf

· OECD (2011) Industrial Biotechnology and Climate Change: Opportunities and Challenges http://www.oecd.org/sti/biotech/49024032.pdf

· OECD (2009) The bioeconomy to 2030: Designing a Policy Agenda http://www.oecd.org/futures/long-termtechnologicalsocietalchallenges/42837897.pdf

· Star-Colibri (2011) Joint European Biorefinery Vision for 2030 http://www.star-colibri.eu/files/files/vision-web.pdf

· USDA BioPreferred Program www.biopreferred.gov

· WEF (2010) The future of Industrial Biorefineries http://www3.weforum.org/docs/WEF_FutureIndustrialBiorefineries_Report_2010.pdf

· WWF (2009) http://wwf.panda.org/?174201/Biotechnology-could-cut-C02-sharply-help-build-green-economy

· WWF(2009) Industrial Biotechnology: More than green fuel in a dirty economy http://www.bio-economy.net/reports/files/wwf_biotech.pdf

· Wit and Faaij (2010) Biomass and Bioenergy http://ac.els-cdn.com/S0961953409001457/1-s2.0-S0961953409001457-main.pdf?_tid=ce18d5fa-9164-11e2-a05c-00000aacb361&acdnat=1363787471_aa7b26e16c05b3214bd061d090157b9a

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[2]               Respondents who chose the residual category, i.e. “Other”, could specify their answers with a textual comment. The content analysis allowed to re-classify the open answers Into one of the four categories. The same criterion has been adopted for the re-categorization of the professional field.

[3]               Plans available under http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm

[4]               Bio‐based Economy in the EU-­‐27: A first quantitative assessment of biomass use in the EU industry; nova-Institut, August 2012.

[5]               According to Wood Flows in Europe (U. Mantau) 577.1 million m3 of wood resources are used in the EU (estimated to correspond to appr. 450 million tonnes) ; with 36 % used for energy applications, 18,7 % for pulp and paper and 45,2 % for the woodworking industry.

[6]               See e.g. Global wood chip trade for energy Lamers et al. 2012 – IEA Task 40

[7]               Appr. 57 % out of a total renewable energy production of 150 Mtoe.

[8]               http://www.biooekonomierat.de

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[11]             BÖR, (2011). Priorities in Bio-economic Research. Recommendations of the Bio-economy Council. Bio-Economy Research and Technology Council. ISBN 978-3-942044-20-2. http://bioeconomy.dk/GermanBioeconomyCouncil_Recommendations_No2.pdf

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[13]             BMELV (2009). Aktionsplan der Bundesregierung zur stofflichen Nutzung nachwachsender Rohstoffe. Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz. http://www.bmelv.de/SharedDocs/Downloads/Broschueren/AktionsplanNaWaRo.pdf?

[14]             http://www.clib2021.de

[15]             http://www.biom-wb.de

[16]             http://www.biotechnologie2020plus.de

[17]             Dutch Cabinet (2021). Hoofdlijnennotitie Biobased Economy. Kamerstuk 02-04-2012, EL&I.

[18]             Innovatiecontract Biobased Economy 2012-2016 (2012). Groene groei: van biomassa naar business. http://www.biobasedeconomy.nl/wp-content/uploads/2012/04/7250-ELI-Innovatierapport-aanpv3.pdf

[19]             http://www.be-basic.org

[20]             FORMAS (2012). Swedish Research and Innovation Strategy for a Biobased Economy. The Swedish Research Council for Environment, Agricultural Sciences and Spatial Planning. ISBN 978-91-540-6068-9. http://bioeconomy.dk/Sweden_Strategy_Biobased_Economy.pdf

[21]             http://www.iar-pole.com

[22]             IB- IGT (2009). IB 2025: Maximising UK Opportunities from Industrial Biotechnology in a Low Carbon Economy. Industrial Biotechnology Innovation and Growth Team. http://www.berr.gov.uk/files/file51144.pdf

[23]             http://www.indbiotech.no

[24]             Industrial Biotech Network Norway (2012). Virksomhetsplan for Industrial Biotechnology Network Norway (Network Vision and Strategy). http://www.indbiotech.no/sites/default/files/Virksomhetsplan%20Norwegian%20Industrial%20Biotech%20Network%20ver10juni12%20%282%29.pdf

[25]             http://www.sitra.fi/julkaisut/Selvityksi%C3%A4-sarja/Selvityksi%C3%A4%2051.pdf

[26]             http://www.mim.dk/NR/rdonlyres/54887891-D450-4CD7-B823-CD5B12C6867A/0/DanishAgreementonGreenGrowth_300909.pdf

[27]             TEAGASC (2008). Towards 2030. Teagasc's Role in Transforming Ireland's Agri-Food Sector and the Wider Bioeconomy (Foresight Report). http://www.teagasc.ie/publications/2008/20080609/ForesightReportVol1.pdf

[28]             FORFAS (2009). Developing The Green Economy In Ireland. High-Level Group on Green Enterprise. http://www.forfas.ie/media/dete091202_green_economy.pdf

[29]             http://www.ifsc.ie

[30]             Information provided by the Industry and Agro-Resources (IAR) bioeconomy cluster

[31]             Note: These figures have been provided by the BIC.

[32]             CEFIC (2011) Annual Report 2011.

[33]             Dalberg (2011) Biorefinery Feasibility Study

[34]             Note: These figures are estimates based on information from the BIC.