Competitors have a head start transitioning to the bioeconomy
July 12, 2016
By Jeff Passmore/Passmore Group Inc.
July 12, 2016 – If you could purchase all your paints, plastic bottles and personal care products knowing they were made from stuff that didn’t contribute to global climate change, would you show a preference for purchasing such items?
And what if Canada’s millions of acres of forests and farmland, and our vast coastal resources, could be used to produce those items, further diversifying our economy and moving Canada away from fossil fuels?
With bio-based products, these opportunities already exist and would fit with the Trudeau government’s low-carbon economy agenda.
According to the International Energy Agency, the term “bioeconomy” refers to the sustainable processing of biomass into a spectrum of marketable products and energy, including chemicals, fuels, power and materials. Bio-based products, as the U.S. Department of Agriculture (USDA) defines them, are derived from plants and other renewable agricultural, marine and forestry materials that provide an alternative to conventional petroleum-derived products.
Think of it this way: most of the consumer products we use today could be made from carbohydrates (biomass) instead of from hydrocarbons (fossil fuels).
Forest/wood residue, agriculture residues such as straw, and dedicated crops and grasses can be sources of biomass. Products from these materials include paper, packaging, engineered wood products, wood pellets, biofuels, insulation and, most recently, biochemicals and biomaterials including paints, solvents, lubricants, plasticizers, cosmetics, textiles, inks, diapers, fragrances, fertilizers, composites — the list goes on.
Canadians probably don’t think of trees and straw as biomass. But whether we’re talking farm or forest, or even marine, Canada is well endowed. In fact, Canada has 10 per cent of the world’s forest — over 700 million acres — and 160 million acres of farmland. Seventy per cent of that farmland is in Saskatchewan and Alberta. Talk about an opportunity for economic diversification!
The Organisation for Economic Co-operation and Development (OECD) Bioeconomy to 2030 report estimates that by 2025-30, the world’s bioeconomy market will be worth between $2.6 trillion US and $5.8 trillion US. Already, within the European Union, the bioeconomy is generating 18 million jobs and €2.1 trillion in annual investment. Germany leads the way with 2015 investments of €343 billion, followed by France at €295 billion and Italy at €244 billion.
Berlin hosted the first Global Bioeconomy Summit in November 2015, with representatives from countries such as the United States, Turkey, Russia, Brazil and Argentina. The eight-page summit communiqué boasted “more than 40 countries are actively promoting bioeconomy with a view to meeting the grand societal challenges of sustainable development.”
The Americans, meanwhile, have been talking biorefineries for over a decade. In February of this year, the U.S. Departments of Energy and Agriculture released their Federal Activities Report on the Bioeconomy. It outlines a vision for the U.S. bioeconomy including “sustainably expanding the production of biomass-based fuels, power and products,” with a view to enhancing the country’s overall competitiveness.
The USDA BioPreferred Program aims to increase the purchase and use of bio-based products, thereby creating new economic opportunities and jobs for farmers, while lowering greenhouse gases through a reduced reliance on fossil fuels.
Under federal law in the U.S., all federal agencies and their contractors must purchase certified bio-based products in categories identified by the USDA. To make it easier for consumers to purchase bio-based products, the USDA has created the “Certified Biobased Product” label, which assures consumers the product to be purchased contains a verified amount of renewable bio-based material.
Any business that meets the USDA’s bio-based criteria may apply for certification and, once approved, can display the certification label. Manufacturers’ claims concerning bio-based content are verified by third parties and monitored by the USDA.
Individual states are also driving innovation. Minnesota is taking steps to make itself a global bioeconomy centre by introducing an incentive to attract commercial production of bioproducts and biomaterials. This year California, already a leader in the sector, declared every April 7 Biotechnology Day.
If the conference calendar is any indication of a growing industrial sector, the bioeconomy is booming. The number of workshops and meetings promoting bio-based chemicals, polymers and plastics has been exploding internationally for at least five years in locations as diverse as Spain, Southeast Asia and England.
We know how to reduce greenhouse gases in electricity through clean energy sources (wind, solar, hydro cogeneration) and transportation (biofuels and, in the longer term, electric vehicles). But what about all those millions of plastic bottles, gallons of paint, thousands of diapers and even tubes of lipstick consumed daily? Biomaterials can provide the answer. A central question is whether Canada will be part of creating new solutions or will simply import products and materials as others make them.
Today, Canada has a progressive federal government at the helm. But the bio sector is up against well-connected, established, incumbent industries. For the sector to flourish, as the Global Bioeconomy Summit stated, “governments are responsible for creating an enabling environment for bio-based industries.”
We are talking about an opportunity to reinvigorate both the forest and agriculture sectors in Canada, as well as rejuvenating inactive industrial sites in places such as Sarnia, Ont., where the community is establishing a bioindustrial business park. New economic opportunities like these don’t come along every decade — we need to grasp them while we can.
Project financing is a challenge where commercialization of all emerging technologies is concerned. To help launch the bioeconomy, the federal government could consider a number of initiatives including a “first commercial project” loan guarantee program (as exists in the U.S.), a national Green Bank to facilitate private investment and provide low-cost debt, an expansion of Sustainable Development Technology Canada’s mandate and budget to encourage both domestic and foreign direct investment in bio-based projects, and tax treatment similar to what fossil and mining companies enjoy.
One day soon, our children will be pulling bio-based products off the shelves without even thinking about it. But transitioning to the bioeconomy will take a coherent effort over 20 years. If Canada wants to stay competitive with its neighbours, we had better get started.
Jeff Passmore is CEO of Passmore Group Inc.
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