N ATIONAL P OLICY S TRATEGY ON B IOECONOMY R ENEWABLE RESOURCES AND BIOTECHNOLOGICAL PROCESSES AS A BASIS FOR FOOD, INDUSTRY AND ENERGY Jaime A. Erazo PPED – IE – UFRJ, Bioeconomia Novembro 2014

1. Defintions and objectives 2. Opportunities 3. Goals and guiding principles 4. Challenges and drivers 5. Growth markets, innovative technologies and products 6. Cross-sectoral areas of action

Source: Federal Ministry of Education and Research – BMBF (2012)

Federal Government-financed research facilities focusing in the bioeconomy Source: Federal Ministry of Education and Research – BMBF (2012)

D EFINITIONS AND OBJECTIVES “knowledge based bioeconomy”, also referred to as a “bio-based economy” providing enough food and healthy food for a growing global population, climate change, and the loss of soil fertility and biodiversity Transition in economy: from mainly using fossil-based raw materials to, based on renewable resources and efficient in raw materials. Bioeconomy takes natural cycles of materials as its point of orientation Renewable resources: plants, animals, micro-organisms, and their derivatives Raw materials from: agricultural, forestry, fisheries aquaculture, microbial production, biogenic waste materials and use of residual materials. resource-efficient recycling Renewable resources worked and processed by industrial application of biotechnological and microbiological processes.

Bioeconomy “Knowledge-based production and use of renewable resources to provide products, processes and services in all economic sectors, within the framework of an economic system which is viable for the future”. “According to this definition, the concept of the bioeconomy encompasses all economic sectors and their associated service areas, which produce, work and process, use or trade with renewable resources – such as plants, animals and microorganisms and products made from them”

D EFINITIONS AND OBJECTIVES Sustainably produce biomass: source of renewable energy, use it at the end of the cascading process of use Biotechnology: key technology, driving international competitiveness of German economy. Structural change towards economy based on renewable resources. substitute oil-based products and develop new types of products Source: Federal Ministry of Food and Agriculture –BMEL (2014)

O PPORTUNITIES Bioeconomy‘s value chains and value adding networks Downstream sectors: work and process renewable resources to form a variety of products, partly also through industrial application of biotechnological and microbiological processes, particularly in the chemical industry. This also includes food producers, and the wood, paper, construction, leather, and textile industries, as well as parts of the pharmaceutical industry and the energy sector. associated areas of retail, distribution and commercial service sectors Bioeconomy: business sectors are increasingly networked and by-products and residual materials are used in a way that yields the highest possible value bioeconomy in 2007: 97 % of the employed (4.8 m. people) and 96 % (€ 159 bn.) of the gross value added.

O PPORTUNITIES Bioecononomy policy: industry policy and energy policy; agricultural, forestry and fisheries policy; and also climate and environmental policy. Satisfy demands: biomass for food, industry and energy? Intensification of land uses competition among agriculture and forestry while generating sustainability? Requirements of environmental and nature protection can impose limitations on agriculture and forestry production, and protect climate and resources Steeply-increasing demand for food security, and renewable raw materials, and associated demand for scarce water and land – supports the development-policy goals in the emerging economies and developing countries or respectively does not influence them negatively. Based on plans for renewable energy, forests, research, biological diversity. EU 2020 and Germany 2030.

G OALS AND GUIDING PRINCIPLES 1. Food security takes priority over the production of raw materials for industry and energy internationally. 2. Paths of use with a higher value-adding potential must be given preference in the remainder of the work on structuring the bioeconomy‘s framework conditions. 3. Where possible and purposeful, cascading use and coupled use of biomass should be applied. cascading use and coupled use of biomass 4. The aim to secure and strengthen the competitiveness of the bioeconomy in Germany and the areas of growth potential on the international markets should always be kept in sight. 5. For the competitiveness of the bioeconomy it is imperative to have well-trained and well-informed specialist personnel.

G OALS AND GUIDING PRINCIPLES 6. The opportunities and framework conditions for using key technologies and for effecting their transfer into commercial use need to be improved. 7. The bioeconomy needs to satisfy increasingly challenging requirements from society in terms of the way in which goods are produced. This applies to the protection of the environment, the climate, nature and animals, and also to compliance with standards of social responsibility. 8. The use of sustainability standards in the producer countries, especially in those with weak government leadership and weak institutions, must be expanded and appropriate efforts made to check compliance with them. 9. In developing the bioeconomy there is a need for close cooperation between all those involved, from the political, economic, scientific, and environmental spheres and from society at large.

G OALS AND GUIDING PRINCIPLES 6. The opportunities and framework conditions for using key technologies and for effecting their transfer into commercial use need to be improved. 7. The bioeconomy needs to satisfy increasingly challenging requirements from society in terms of the way in which goods are produced. This applies to the protection of the environment, the climate, nature and animals, and also to compliance with standards of social responsibility. 8. The use of sustainability standards in the producer countries, especially in those with weak government leadership and weak institutions, must be expanded and appropriate efforts made to check compliance with them. 9. In developing the bioeconomy there is a need for close cooperation between all those involved, from the political, economic, scientific, and environmental spheres and from society at large.

Interrelationship between fields of action from the research policy framework along the value and process chains Source: Federal Ministry of Education and Research – BMBF (2012)

C HALLENGES AND DRIVERS Food security World population ,2 bn (↑), Germany 77,4 m (↓) Demand for food (↑), then to secure food supply increase by 60% agricultural production. Production increase: 77% higher yields, 14% greater use of intermediate inputs, 9% expanding farming of plant-based products. Boost yields: Lat. Am., Africa, Asia with capacity building and infrastructure (tec. & admin). Food production losses: 1/3 lost or goes to waste. World agric. prices will be coupled with energy prices Finite nature of fossil based raw materials New techniques: fraking, new demands from emerging countries. Germany dependent on fossil fuels for its industry (plastics, paints, cosmetics, fertilizers) Protection of the climate, of biodiversity and of natural resources Germany has demanding climate protection goales: 40% reduction of GHG emissions by 2020, and 80-90% by By 2020 renweable energy 18% of total energy consumption (35% of gross energy consumption); by % of total energy consumption or 80% of electricity consumption.

C HALLENGES AND DRIVERS Reduction of CO 2 emissions: expanding forests, land uses for cultivating bio-based products, using wood as energy source and as material, using biomass from agriculture for energy, preserve storing carbon function of landscape, Biodiversity: source for animal breeds and plant varieties then help for food security and climate change. Research and innovation R&I source of transition of use of renewable resources. Biorefineries: use residual materials, waste from agriculture as energy source. Areas: efficiency use of resources, biological production platforms, coupling tech and socio-economic research. High qualified personnel + innovative companies + i nnovation driving technologies = strength of biomass production and sustainability of production systems. Funding for implementation of innovation ant tech. development. Science and business targeted research funding. Networks among research disciplines to generate solutions for the value chain and process chains Adjust applied and pure research and create high level research structures ( clusters and strategic alliances).

G ROWTH MARKETS, INNOVATIVE TECHNOLOGIES A ND PRODUCTS Germany has advantages and weakness: the highly developed technological standard, good infrastructure, a high level of investment in R&D and also a high-performance agriculture and forestry sector as a supplier of raw materials Links and networks internationally Opportunities to create systemic solutions across disciplines Limited additional potential in area of agriculture and forests High land prices Industrial Biotechnology advancing the structural transition to an economy based on renewable resources new products and innovative processes for producing biofuels and biobased products (chemical, food, feed, paper and textile sectors) Biotechnological processes link up the knowledge gained about biological systems with advances in molecular biology and new technical components. Innovations that substitute petroleum-based products and chemical processes, based on environmental and economic advantage, but needs increasing R&D. Commercially superior to corresponding products from classical chemical processes: advantages in reaction behavior, energy savings and reduced waste and emissions, added value potential Chemical industry based on mix of raw materials: special chemicals and bioplastics

G ROWTH MARKETS, INNOVATIVE TECHNOLOGIES A ND PRODUCTS Examples: biotechnologicallymanufactured fine and special chemicals (citric acid, aminoacids, organic acids), in addition to antibiotics for the pharmaceutical industry; biobased plastics (automotive and construction, furniture) and composite materials (biogenic raw materials like polylactid acid); enzymes and microorganisms (washing & celaning, food, drink and textile ind.); plants biomass biosinthetic capabilityies (vitamins, minerals, prebiotics); industrially-manufactured essential amino acids can close a gap in animal nutrition (increase aminoacids, improve feeds, reduce nitrogen); pharmaceuticals such as profens, anti-rheumatic drugs and analgesics can be produced in a more efficient way that spares resources; marine biotechnology, food, pharmaceutical, cosmetics Algae biotechnology capability to fix CO2 and use nutrients from waste water Use of biomass for production of materials regenerative source of carbon for chemical industry and higher value-added and more employment than their use as an energy source classic use of wood continues to offer growing market opportunities for the domestic forestry, wood and paper sectors refurbishment of buildings to optimise energy use, in the targeted use of long-life wood products with corresponding CO 2 storage, and also in the area of “ Sustainable Building ” Medicinal plants, 75% of use by pharmaceuticalsin Germany No sustainability certificate for biomass use

G ROWTH MARKETS, INNOVATIVE TECHNOLOGIES A ND PRODUCTS Use of biomass for energy Bioenergy is obtained from biogas as a raw material: energy crops, wood or residual materials, in particular straw, biowaste, slurry, or residual materials from biorefineries and from cascading use Milestone 2030: analyse and assess the paths leading to the provision of bioenergy, in the process of advancing towards the expansion targets Mobility bussines: biofuels not economically viable without public-funding support. Electricity: second most important energy source (6,8% gross electricity consumption), obtainded by solid, liquid or gaseous biomass generating heating supply biomethane sourced from algae a variety of biorefinery concepts and products Food and feed Export of highly-refined food and feed with a high level of value-added, produced in conformity with the requirements of sustainable agricultural production Increased farming of protein crops for human nutrition and as animal feed + R&D Horticulture and fruits: use of chemical-synthetic aromas, flavourings and ingredients, through appropriate substances sourced from natural raw materials, and functinal plants Urban/vertical farming Fish and other aquatic organisms are bred with the aid of highly-sophisticated aquaculture technology: use of waste heat and aquaculture recycling High-priced fish are cultivated, such as eel, catfish, sturgeon and caviar, as well as pet fish and fish for stocking

C ROSS - SECTORAL AREAS OF ACTION Source: Federal Ministry of Food and Agriculture –BMEL (2014)

C ROSS - SECTORAL AREAS OF ACTION B. Information and dialogue within society C. Vocational training and apprenticeship A. Coherent policy framwork for sustainable bioeconomy Establishing an “Inter- Ministerial Working Group on the Bioeconomy” Establishing an “Inter- Ministerial Working Group on the Bioeconomy” Closer dovetailing of the Federal Government's advisory committees Closer dovetailing of the Federal Government's advisory committees Supporting a coherent EU and international bioeconomy policy Supporting a coherent EU and international bioeconomy policy Information – bioeconomy:initiative “New products: made from nature” International Bioeconomy Network: DAAD, int. of researchand teaching Information about sustainable consumption Integrating bioeconomic aspects into vocational training: Federal Institute for Vocational Education and Training (BIBB) Cooperation models or also public-private partnership models Information project on sustainability: Sustainability in forest management ( ) Better product information for customers: Blue Angel environmental symbol + sust. product labeling. Initiatives against food waste Intensifying the dialogue to promote an innovation- friendly climate and on determining how best to deal with conflicting goals The Federal Government's dialogue with business, science and civil society, regarding the bioeconomy: Source: Adapted from Federal Ministry of Food and Agriculture –BMEL (2014)

Source: Federal Ministry of Food and Agriculture –BMEL (2014)

T HEMATIC AREAS OF ACTION D. Sustainable production and provision of renewable resources D. Sustainable production and provision of renewable resources D2. Provision of agricultural raw materials and sustainably higher productivity for the utilised agricultural area D1. Sustainable development in agriculture, forestry and fisheries Appropriate implementation of the EU Common Agricultural Policy CAP Options for action to foster climate protection in the agriculture and forestry sectors Implementing the measures in the Forest Strategy 2020: sust. use, adaptation to CC, efficient use of raw mat., bd and nature protec., soil protec, water mang., recreation, tourism, research and edu., publ. Info. Implementing the package of measures aimed at sustainable use of plant- protection products Implementing the package of measures aimed at sustainable use of plant- protection products Network for sustainability certification for raw materials. Research into sustainable farming of energy crops Fostering projects and activities within the framework of the Federal Government's Forest Climate Fund Strengthened fostering of research and development along the value chain Elaborating a strategy for the future of horticulture Implementing the recommendations for action regarding the effectiveness of the national Fertiliser Ordinance Strengthening soil research Establishing a networking unit – the “German Innovation Partnership for Agriculture”: Research into precision farming Adaptation to climate change Expanding international cooperation in the context of checking suitability for cultivating non-indigenous species of trees Investments in innovative research and development for the purpose of expanding the performance potential of crops D3. Use of the sustainably-available potential of wood and adaptation of the forests to climate change Giving support to the development of short rotation plantations Supporting developing countries and emerging economies in forest protection and sustainable use Source: Adapted from Federal Ministry of Food and Agriculture –BMEL (2014)

T HEMATIC AREAS OF ACTION D. Sustainable production and provision of renewable resources D. Sustainable production and provision of renewable resources D4. Tapping aquatic resources on a sustainable basis, for food, energy and industry E1. Tapping growth markets and giving support to innovative technologies and products based on renewable resources Fostering research and development on renewable raw materials Fostering of innovative agriculture and food sector products Expanding growth markets in the area of innovative wood products Improving the framework conditions for venture capital directed to young and nnovative companies Fostering industrial- biotechnology innovations Further development of norms, standards and life- cycle analyses Optimising the conditions for keeping farmed animals Developing and using algae as a sustainable resource Support to export of biobased products and technologies Fostering of research, development and technology transfer by small to medium-sized enterprises (SMEs), as well as by scientists Fostering the potential for value-added offered by functional green plants Fostering expansion of sustainable aquaculture and polyculture Breeding of high-performance, robust farmed animals with good resistance to illness Commitment to sustainable fishing D5. Sustainable production of high- added-value food of animal origin Europe-wide networking among research partners Sustainably tapping and using microbial resources Urban/vertical farming concepts

T HEMATIC AREAS OF ACTION G. Competition among uses of land G1. Reducing the demand for agriculture and forestry areas originating from building development and transport F1. Optimising existing value- added chains and networks and developing new ones Fostering the leading-edge cluster competition BioEconomy: coupled production and cascading use in the lignocellulose biorefinery Fostering initiatives to recover phosphorus: from sewage sludge, from upstream operations. Improve availabitlity of P to plants. Fostering initiatives for sustainable food production and also sustainable food consumption Fostering international scientific collaboration: “Bioeconomy International” preferred basis with Argentina, Brazil, Canada, Chile, Malaysia, Russia and Vietnam – in R&D Mobility and fuel strategy Introduction of standards governing the quality of compensation measures in terms of specialist expertise on nature-protection matters Using greenhouse-gas reduction as the assessment basis when considering funding-support to biofuels Permanent exchange of views and ideas on the transition in energy sourcing Permanent exchange of views and ideas on the transition in energy sourcing Development of a concept for reducing claims made on agricultural areas by non-agricultural use G2. Defusing competition for land-use between food production and renewable raw materials for energy and industry Reviewing the Renewable Energy Sources Act (EEG) Funding-support to a pilot and demonstration project on bioenergy use of long-term grassland Research studies to estimate the consequences of various paths of development G3. The use of renewable resources must be more strongly concentrated on the most efficient paths of use G3. The use of renewable resources must be more strongly concentrated on the most efficient paths of use Expanding funding-support to research into use as a source of materials Review and adaptation of funding-support measures for bioenergy Review and adaptation of funding-support measures for bioenergy Source: Adapted from Federal Ministry of Food and Agriculture –BMEL (2014)

T HEMATIC AREAS OF ACTION H. International context H2. Securing market access to renewable raw materials within the framework of international trade. H1. Balance out food production and provision of renewable raw materials for energy and industry Project to defuse competition between uses in developing countries_ bioenergy socially and env. resp. Bilateral trustee fund with the FAO for combating hunger and malnutrition. Giving support to partner countries of German development-cooperation in implementing the Convention on Biological Diversity Formation of German-African research networks: all bioeconomy topics + social. Simplified import: reduction on tariff duties Support for the voluntary guidelines of the UN Committee on World Food Security: tenure of land, fisheries and forests. Improvement of market access: WTO negotiations and rules H3. Establishing and further developing internationally recognised sustainability standards in agriculture and forestry Expanding the sustainability certification for biomass H4. Expansion of international research and technology cooperations Building-up biomass partnerships Giving support to the Global Bioenergy Partnership (GBEP): Support to rural development and to food security Improving processes for sustainable agricultural and forestry production Support of voluntary partnership agreements and implementation of Regulation No 995/2010 of the European Parliament and of the Council on timber and timber products: legally produce wood into EU. Source: Adapted from Federal Ministry of Food and Agriculture –BMEL (2014)

C ASCADING USE AND COUPLED USE OF BIOMASS Cascading: mechanism for prioritizing its use for socially preferable products, notably materials over its use for energy. is applicable when there is a linear system in which biomass progresses through a series of material uses, by reuse and recycling, before finally being used for energy recovery Traditionally in forestry sector to allocate wood resource into the pulp and paper, wood processing and energy industries. These different sectors are connected as part of a cascade: sawmill residues, pulp and paper sector and the recycling of paper. Cascading use allow material and energy uses of biomass to be achieved in a complementary way By preferentially directing virgin biomass toward material uses over energy, cascading use maximizes the amount of carbon sequestered in biomaterials. Coupled use: energy, fuels, materials Source_ Lyko et al. (2009) RETURN