EU Outlook for Biomass Flows and Bio-based Products

The Bioeconomy Strategy Action Plan calls for sustainable extraction, processing, and use of biological resources in Europe as a pathway to achieve environmental, social and economic goals. However, the transition towards sustainable food systems within and across countries is diverse due to the existing heterogeneous land patterns and agricultural production structures, the variety of potential industries competing for specific biomass feedstocks, and the national policy frameworks in place. Therefore, it is key for policymakers to understand how biomass is supplied, and how it flows through the economy and is used for alternative purposes. This calls for tools that can monitor and quantitatively analyse these aspects. BioMAT has projected the annual growth rate of the EU bio‐based chemical production from 2018 to 2030 to be four times higher than its fossil‐based counterpart. The associated net‐availability of industrial sugars in 2030 is quite balanced, but excess demands for starch and plant oils will increase to fulfil requirements of a growing bio‐based chemical sector. As a vast amount of biological feedstock for material use originates from non‐EU regions (e.g. palm oil), sustainable sourcing and a better use of biological residues should be emphasised. Scenario analyses are helpful to consider consequences of assessing different technical pathways or policies.


Myrna van Leeuwen, Ana Gonzalez-Martinez and Viktoriya Sturm
Understanding the importance of the bioeconomy and its analysis Existing food systems are not sustainable and a rising global demand for food, feed, biomaterials and bioenergy will further intensify the pressure on natural resources and increase conflicts between supply and demand for biomass as a key material.Current policy instruments including the European Green Deal, the Farm-to-Fork Strategy, and the CAP 2023-2027 aim to design sustainable food systems that guarantee food security, sustainable production, and an efficient use of biomass resources.The importance of the bioeconomy as a catalyst for implementing the EU Green Deal has been acknowledged by the European Commission (European Commission, 2020).The bioeconomy encompasses all sectors and services that produce, process, use and distribute biological resources, including ecosystem services.The EU Bioeconomy Strategy (adopted in 2012; updated in 2018) and its Action Plan call for sustainable extraction, processing and use of biological resources in Europe as a pathway to achieve environmental, social and economic goals.
Despite the progress made regarding the implementation of the Bioeconomy Strategy, there are some critical factors that hinder progress towards the 2030 ambitions.The EU Bioeconomy Strategy Progress Report (published in 2022) urges additional efforts for better management of land and biological resources, as well as further actions to bring consumption towards a sustainable pathway.A major reason beyond both implementation gaps is the limited understanding of complex interactions between the components of the bioeconomy, i.e. how biomass flows into, through and out of the EU economy.Tensions between supply and demand of biomass emerge from the pressure on resources due to a variety of reasons, e.g.climate change mitigation, nature protection, the provision of ecosystem services and supply of biomass for both existing (e.g.food, feed, seed, bioenergy) and emerging uses (e.g.bio-based chemicals and bio-based construction).A cross-sectoral and cross-regional approach is helpful to identify and address trade-offs between policy targets and competing uses of land and biomass in the context of the aim to achieve a sustainable and efficient distribution of the available biomass over the different bioeconomy sectors.
Transition pathways towards sustainable food systems within and across countries can be diverse due to heterogeneous land patterns and agricultural production structures, the variety of potential industries competing for specific biomass feedstocks, as well as differing policy frameworks in place.There is no one-size-fits-all approach on how biomass should flow throughout an economy and in which industry it should end up.The Bioeconomy Strategy Action Plan recommends that initiatives aimed at exploiting the full potential of the bioeconomy should best take place at the country or regional level.Dedicated regional bioeconomy governance structures and strategies should promote and support specific biological resources, and concrete cross-sectoral cooperation and sustainability principles.
A key element for those involved in the bioeconomy is to understand how biomass is supplied, as well as how it flows through the economy and how

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it is used for alternative purposes, e.g.food, feed, seed, bioenergy and bio-based materials.Bringing together the supply and the demand for biomass within the economy provides new insights into the net availability of biological resources for the bio-based industry, as well as gives an indication of the types of feedstock imports on which the bio-based industries rely e.g.palm oil.In this context, anticipating bioeconomy market trends is also of strategic importance when thinking of economic development in the future.However, the complexity of the food system and especially the diversity of pathways towards achieving a sustainable supply and efficient use of biomass, requires tools that can monitor and quantitatively analyse these aspects.
To the best of our knowledge there is no single model that represents all aspects of the food system, links primary agriculture with bio-based industries, covers the whole EU and is applicable for ex-post and ex-ante analysis.Hence, the EU H2020 BioMonitor project used a suite of methods and simulation tools, which in combination can address a variety of environmental, economic and social aspects of the bioeconomy in the EU and its Member States (see Table 1).
In short, the main aims of this article are to quantify the medium-term development of EU bio-based chemical markets assuming a business-as-usual situation, and to estimate the consequences of this development for required versus available biological feedstock types.

A quantitative representation of the EU bioeconomy
Evidence-based policymaking is key when thinking of (re)designing both agricultural systems and the bioeconomy in the future (Gonzalez-Martinez et al., 2021).Focusing on agriculture, there is a well-established tradition of publishing, on a yearly basis, market outlooks by the European Commission and the OECD-FAO.These outlooks are based on the projections generated by quantitative models like AGMEMOD (Chantreuil et al., 2012) (Verkerk et al., 2016), EFI-GTM (Kallio et al., 2004), and MAGNET (Woltjer and Kuiper, 2014)  " Box 1: Description of the BioMAT modelling approach The Bio-based MATerial model (BioMAT) is a new tool for monitoring and analysing the medium-and longer-term development of bio-based chemical markets in EU Member States in terms of supply, use, trade and prices (Van Leeuwen et al., 2022).All products belong to the sector NACE C20 Manufacture of chemicals and chemical products with the PRODCOM statistics clustered in fifteen (semi-)final applications, respectively; chemical platform products, solvents, polymers for plastics, paints and coatings, surfactants, lubricants, adhesives, cosmetics, man-made fibers, pharmaceuticals, biofuels, food & feed, building material, agrochemicals, and other products.The development of BioMAT started with the application of data imputation techniques to fill data gaps in the existing statistics while ensuring consistency across countries and products and related statistics (COMEXT, SBS) in the database used for the estimation of the model.As most chemical products in PRODCOM are reported as hybrid products, each is split into a bio-based and fossil-based part.Following this, each bio-based product is linked to biomass feedstock types and conversion rates indicating how much of the feedstock type is needed to produce the product (Sturm et al., 2023).To sum, the starting point of the BioMAT database is the existing statistics which are supplemented with expert knowledge (left vertical bar, Figure 1) in order to safeguard regular updates at the individual product and Member State levels.BioMAT is a module of the established Agricultural Member State Modelling (AGMEMOD) tool (Chantreuil et al., 2012) and thus follows the same multi-country and multi-commodity systematic approach.The main difference with AGMEMOD is the product scope.AGMEMOD analyses the supply of agri-food commodities and distributes these over main uses, i.e. food, feed, seed, stocks and materials (3 boxes on left side, Figure 1).BioMAT looks at the supply and use of industrial bio-based products downstream of the value chain (3 boxes on right side, Figure 1) as well as the biomass needed to manufacture the bio-based products.The demand for biomass from those industries is connected to the supply of biomass available for material use that AGMEMOD provides (box in centre, Figure 1).Both BioMAT and AGMEMOD provide a set of economic-technical indicators for respectively bio-based chemical applications and agri-food commodities in the EU and its Member States (right vertical bar, Figure 1) in a baseline situation.
Both models are also suitable for impact assessments and scenario analysis (bottom horizontal bar, Figure 1).In light of competing claims on the agricultural biomass that is produced in the EU, AGMEMOD gives supply information, such as hectares of arable land available for biomass production (Figure 2), or production volumes (top of Figure 3) and self-sufficiency rates for cultivated crops in 2030 (bottom of Figure 3).
As indicated in Figure 4 6).Although not included in the figure, we found that the expected annual growth rate of production and consumption of the average bio-based chemical application from 2018 to 2030 is four times higher than its fossil-based counterpart (2.7 per cent versus 0.7 per cent).This is caused by a declining ratio between bio-based and fossil-based prices for chemical products.The dotted line shows the expected moderate growth of the bio-based share in total chemical production from 13 per cent in 2010 to 17 per cent in 2030 (right axis of Figure 6).In the analysed period, the EU remains a net-importer (in kton) of chemical product applications.
Figure 7 shows a breakdown of the total bio-based chemical production by individual product application categories.With regard to the use of biological feedstock by the bio-based chemical industry, Figure 8 shows the projected needs, per type, for any distinguished bio-based chemical applications in EU in 2030.About one third regards industrial plant oil, followed by starch (21 per cent), wood lignocellulosic (13 per cent), animal biomass (10 per cent) and sugars (6 per cent).
The volume of industrial sugars, starch and industrial plant oil respectively that is available for the EU bio-based chemical industry, i.e. the feedstock volumes which remains on the supply side after allocating to food, feed, and seed applications in EU and abroad (provided by AGMEMOD), is compared to their required amounts from the EU bio-based chemical industry (provided by BioMAT).While the industrial sugar market is quite balanced, there exists an excess-demand for starch and plant oils (for reasons see Sturm et al., 2023).The excess-demand for starch for material and biofuel use (when correcting for starch used by the paper industry), might increase from 1.4 miot in 2020 to 2.9 miot in 2030.Moreover, the excess-demand for industrial plant oils in the EU is expected to grow from 10.1 miot in 2020 to 15.6 miot in 2030.As plant oils form the dominant feedstock in the bio-based chemical sector, and given that its vast majority originates from non-EU regions, there is a strong need for sustainable sourcing of (traded) biomass.

Lessons learnt
The transition towards a more sustainable food and more bio-based industrial system will rely on the availability of sustainable biomass feedstock and appropriate processing technologies, as well as substantial market penetration of bio-based products.On the production side, additional investments to improve the existing production methods, reduce waste and deliver new products will be required.On the consumption side, raising awareness, informing consumers about the implications of their choices, and changing their behaviour by means of fiscal (tax) instruments are among the available tools to increase the uptake of bio-based products.Regardless the target of the intervention, i.e. farmers, processing industry, industrial users and consumers, there is a need for a transparent and well-designed policy framework that favours the The implementation of appropriate policies related to the bioeconomy and the assessment of their impacts can profit from the insights provided by quantitative modelling tools.This approach has proven relevant in other fields such as agricultural or energy policies.Since the modelling related to primary agricultural production in the EU-27 is well-covered by AGMEMOD, there is a need to get insights into the secondary stages of the supply chain.This will improve our understanding of the demand from the bio-based chemical industry and the final use of its output in the EU Member States.This is the contribution of the BioMAT model, embedded in the AGMEMOD governance system what allows the easy cooperation of both modelling tools to generate medium and long-run projections.
A final comment regarding validation of the market outlooks delivered by these tools is due.The AGMEMOD baseline is updated every year and validated with EU and national policymakers and agrifood industry representatives.Since BioMAT has recently been developed, a solid validation procedure for its baseline still needs to be established.The initial validation exercise has relied on the insights provided by economic market experts and engineering experts.

Implications for decisionmaking and policy design
The following specific features of BioMAT can be of interest for policymakers and other relevant stakeholders involved in the bioeconomy: the model explains how the production of bio-based materials has evolved in the past and identifies the overall historical trends that occurred in the EU bioeconomy.For example, it shows the evolution of the share of bio-based production in the chemical industry and provides projections for these uses.Moreover, it provides projections on the shares of bio-based materials in the chemical industry that are currently produced and where, and plausible production volumes in 2030.BioMAT can also respond to questions regarding the expected biomass feedstock needed to produce these innovative materials in 2030 and whether it will be met by available EU production.Therefore, it can also help policymakers to anticipate the potential trade flows of the EU with the rest of the world.All these questions can be addressed when looking at the baseline/ simulated scenarios of the BioMAT model.
Other relevant applications of the model are in the context of alternative scenario simulation and The Bioeconomy Strategy Action Plan calls for sustainable extraction, processing, and use of biological resources in Europe as a pathway to achieve environmental, social and economic goals.However, the transition towards sustainable food systems within and across countries is diverse due to the existing heterogeneous land patterns and agricultural production structures, the variety of potential industries competing for specific biomass feedstocks, and the national policy frameworks in place.Therefore, it is key for policymakers to understand how biomass is supplied, and how it flows through the economy and is used for alternative purposes.This calls for tools that can monitor and quantitatively analyse these aspects.BioMAT has projected the annual growth rate of the EU bio-based chemical production from 2018 to 2030 to be four times higher than its fossil-based counterpart.The associated net-availability of industrial sugars in 2030 is quite balanced, but excess demands for starch and plant oils will increase to fulfil requirements of a growing bio-based chemical sector.As a vast amount of biological feedstock for material use originates from non-EU regions (e.g.palm oil), sustainable sourcing and a better use of biological residues should be emphasised.
BioMAT aims to describe how the behaviour of suppliers and users influences the development of bio-based production and use, which are quantified by means of the shares of bio-based products within a specific chemical application.Therefore, estimating the size of bio-based shares from key factors is a core effort of BioMAT in order to split the total market of a chemical application over its fossil-based and bio-based parts.In this respect, the supply of any bio-based application is driven by technology, policies, availability and prices of biomass feedstock, and the raw oil price for the competing fossil-based application.Factors like economic development (income, world prices), demographic factors and consumer preferences (upper horizontal bar, Figure1) explain the demand for each bio-based application.

Figure 3 :
Figure 3: Production volume (mio tonnes) and self-sufficiency rates (index) of crops in EU, 2020 and 2030