Renewable Matter #8 by Edizioni Ambiente

RENEWABLE MATTER INTERNATIONAL MAGAZINE ON THE BIOECONOMY AND THE CIRCULAR ECONOMY 08 | January-February 2016 Bimonthly Publication Edizioni Ambiente

Gunter Pauli: Children Will Invent a Green Future • Marta Ceroni: From the Great Acceleration to the Iceberg Model • Victor Olgyay: Up in the Mountains to Rethink Cities • Marco Panzeri: The Recycling Logo Turns 45

Focus on Germany/the Bioeconomy: The Winning Formula • €1,27 trillion and 7 million jobs: Bioeconomy’s Figures in EU5 • Biobased Economy: What Should We Expect? • Compost Makes its Entrance

A Budding Sustainable Economy

Euro 12,00 - Download free online magazine at www.renewablematter.eu

• What is the Real Cost of Oil Palm Production? • Cars: Design Looks to New Materials

Small Blue Businesses Grow Up • Out for a Walk with Micropigs • The Unbearable Heaviness of the Food Industry

WE HAVE TAKEN AN ASTONISHING WEIGHT O F F T H E S H O U L D E R S O F T H E F U T U R E.

At Ecopneus, we have recovered 1 million tonnes of end-of-life tyres, the weight of 8 cruise ships, in just 4 years. And we have transformed them into something more. Thanks to ethical and transparent work, 100 million end-of-life tyres have made many athletes sweat and have fun becoming basketball courts, tennis courts and football fields. They have reduced noise in offices, transforming themselves into sound-absorbing walls. They have protected thousands of children as shock absorbent rubber on playgrounds. They have covered kilometres of roads with rubberized asphalt and mitigated the vibrations of numerous tramway lines. They have given sustainable energy to companies in Italy and abroad. But most of all, they have done something priceless: they have made our country a more liveable place for future generations.

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Cariplo is passionately philanthropic about art, culture, scientific research, social issues and the environment. It is currently focussed on supporting young people, community welfare and people wellbeing, carrying out projects in collaboration with nonprofit organizations. Since 1991, Fondazione Cariplo has supported over 30,000 initiatives, donating â&#x201A;Ź2,8 billion.

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International Conference on Bio-based Materials 5 – 6 April 2016, Maternushaus, Cologne, Germany

++ Special Topics: ++ Lignin ++ Polyhydroxyalkanoates (PHA) ++

HIGHLIGHTS OF THE WORLDWIDE BIOECONOMY 250 participants and 30 exhibitors mainly from industry are expected!

Contact

• Policy and Markets • Bio-based Building Blocks and Polymers • Biorefineries and Industrial Biotechnology • Innovation Award “Bio-based Material of the Year 2016“

Organiser

Dominik Vogt Exhibition, Partners, Media partners, Sponsors +49 (0)2233 4814-49 dominik.vogt@nova-institut.de

This conference aims to provide international major players from the bio-based building blocks, polymers and industrial biotechnology industries with an opportunity to present and discuss their latest developments and strategies. Representatives of political bodies and associations will also have their say alongside leading companies. The 9th International Conference on Bio-based Materials builds on successful previous conferences. More information at: bio-based.eu/conference.

www.bio-based.eu/conference

BIO-BASED START-UP DAY

7 April 2016 · Maternushaus · Cologne · Germany

Bio-based Chemicals & Materials ++ Biotechnology ++ Carbon Capture & Utilization

Organised in collaboration with

START-UP HIGHLIGHTS

CLIB

High-potential start-ups from the field of bio-based chemistry, polymers and biotechnology are invited to present themselves to industry and investors!

www.clib2021.de

www.ibbnetzwerk-gmbh.com

Organiser

www.nova-institute.eu

The Bio-based Start-up Day will bring start-ups, investors and industry together by giving the floor to everyone and providing great opportunities of networking. The day will start with a keynote speech followed by the presentation of the start-ups. Clusters will also have the chance to present their own start-ups. The audience will then have the opportunity to meet the start-ups in person. Investors will afterwards provide an insight into their incentives and experiences working with start-ups in the biobased and biotech sector. The day will end with a discussion and a coming together.

bio-based.eu/startup

Partners

ADI Design Index 2015 Selection

Media Partners

RENEWABLE MATTER Networking Partners

Supporters

Technical Partners

Printed by Geca Industrie Grafiche using mineral oil free vegetable-based inks. Geca production system does not produce exhaust and all waste of our manufacture is introduced into a process of collection and recycling. www.gecaonline.it

Printed on Crush ecological papers by Favini, made using process residues from organic products to replace up to 15% of virgin pulp: cover Crush Mais 250 gsm, text Crush Mais 120 gsm. www.favini.com

Events

Editorial

2016: Rm Renews Itself

Along With Matter by Antonio Cianciullo

Belated Happy 2016! For us at Renewable Matter, 2015 was the year in which we fine-tuned our editorial project: not just a simple magazine, but a place for catalysing reflections on a neglected topic. Much attention devoted to energy (and rightly so) but little awareness of the importance of matter recovery. For Renewable Matter and the sector, 2015 was a positive year. During the past year, we managed to attract new supporters such as Barilla and Fondazione Cariplo and expanded our Partners’ network (associations, clusters, research institutes, universities, and consulting agencies), adding partners of the calibre of The Worldwatch Institute, Matrec, the Global Footprint Network, Ambiente Italia and European Bioplastics. Our debut on social media was also very positive. On Twitter, @MRinnovabile profile reached 1,000 and now it gets 2 new followers every day: on a sample of 100 tweets, between 10th and 17th December 2015, the number of accounts potentially reached (directly by the activity of the account or indirectly thanks to the interaction with other profiles) was over 80,000. Meanwhile, we received positive signs of change. Despite a first stop and a scaling down of regulations, the EU passed a circular economy package, which will be thoroughly discussed in this issue. The 2015 United Nations Climate Change Conference was held soon after in December in Paris. Some, adopting a rigorous scientific point of view, rejected it because its conclusions do not include the necessary measures to protect us from the threats of climate change. I think that such a stance does not grasp the main idea: The UN Summit was not a scientific meeting because, from this point of view, the IPCC (Intergovernmental Panel on Climate Science) on several occasions had already outlined an exhaustive picture of the situation; it was only a case of reaching political agreement. To do so on topics that influence markets, it was necessary to come to an economic agreement. The conditions for such deal were created thanks to global scale mediation. The agreement was reached on points supported by the EU and environmentalists (keeping global warming below 2 °C, trying all it takes to keep it below 1.5 °C compared to the pre-industrial era); with methods favoured by the USA (no regulations from above, only the law of supply and demand); with the timeframe wanted

by China (when Beijing had already started to considered very dangerous the pollution pressure on its territory and had become a productive leader in the renewable source sector). The results of this effort are still insufficient but not negligible. For the first time, it gathered together 186 countries responsible for 95% of greenhouse emissions. These countries are already halfway in reaching their CO2 reduction target. For the first time in the history of humankind, a mechanism for the governance of common goods was set in place entailing the global distribution of tasks. Surely, it is a weak governance because it did not start, as logics would require, from the targets to achieve in order to allocate tasks, but it followed the opposite route: each country committed to a voluntary target and made it known. Nevertheless, the mechanism was set in motion and there is a reasonable possibility that the economic machine, once it has identified a purpose able to mobilize the public opinion leading to profit and consensus, will move faster than politics. Even the consortium of entrepreneurs led by Bill Gates and Mark Zuckerberg believe in this and decided to allocate $20 billion to speed up green research. Against this framework, Renewable Matter intends to throw down the gauntlet in 2016. This year we will strengthen our position through new initiatives. We will offer an increasingly widespread distribution of our magazine and Insight, an in-depth analysis supplement we started publishing at the end of 2015. In January, we created Centro Materia Rinnovabile (“Renewable Matter Centre”) to offer assistance to companies undergoing the green transition and to show that the circular economy is an extraordinary instrument to accelerate the synergy between ecology and economy. Last but not least, we have started to organize conferences and meeting opportunities for those that recognize matter recovery as a crucial instrument to relaunch the economy, employment and to support local areas involved in various projects. Needless to say, it will make for an interesting year.

R M

08|January-February 2016 Contents

RENEWABLE MATTER INTERNATIONAL MAGAZINE ON THE BIOECONOMY AND THE CIRCULAR ECONOMY

Antonio Cianciullo

2016: Rm Renews Itself Along With Matter

edited by Sergio Ferraris

Children Will Invent a Green Future Interview with Gunter Pauli

edited by Emanuele Bompan

The Man Who Rethinks Buildings Interview with Victor Olgyay

Mauro Panzeri

45 and Still Going Strong

Marta Ceroni

Leading Big in Corporate Social Responsibility: A Systems View

Roberto Giovannini

What is the Real Cost of Palm Oil Production?

Joanna Dupont-Inglis

The Complete Package?

Michael Carus, Achim Raschka, Kerstin Iffland, Lara Dammer, Roland Essel, Stephan Piotrowski

How to Shape The Next Level of The European Bio-Based Economy?

edited by the editorial staff

â&#x201A;Ź1.27 Trillion: Thatâ&#x20AC;&#x2122;s How Much the Bioeconomy is Worth in the EU5

Roberto Rizzo

Compost Makes its Entrance

Free bimonthly magazine www.renewablematter.eu ISSN 2385-2240 Reg. Tribunale di Milano n. 351 del 31/10/2014 Editor-in-chief Antonio Cianciullo

Contributors Gianfranco Bologna, Emanuele Bompan, Mario Bonaccorso, Marco Capellini, Michael Carus, Massimo Centemero, Marta Ceroni, Lara Dammer, Joanna Dupont Inglis, Roland Essel, Sergio Ferraris, Roberto Giovannini, Kerstin Iffland, Elena Jachia, Manfred Kircher, Christine Lang, Giorgio Lonardi, Victor Olgyay, Ilaria Nardello, Mauro Panzeri, Gunter Pauli, Federico Pedrocchi, Stephan Piotrowski, Achim Raschka, Roberto Rizzo, Massimiliano Tellini, Silvia Zamboni

Think Tank

Editorial Director Marco Moro

Acknowledgments Luigi Bechini, Dario Bolis, Claudio Busca, Ilaria Catastini, Massimo Centemero, Gennaro Galdo, Stefania Maggi, Carlo Montalbetti, Michele Posocco, Stefano Stellini Managing Editor Maria Pia Terrosi Editorial Coordinator Paola Cristina Fraschini

Design & Art Direction Mauro Panzeri (GrafCo3), Milano Layout Michela Lazzaroni Translations Erminio Cella, Laura Coppo, Maddalena Gerini, Franco Lombini, Mario Tadiello

Policy

Editing Paola Cristina Fraschini, Diego Tavazzi

Executive Coordinator Anna Re

Silvia Zamboni

Mario Bonaccorso

edited by Mario Bonaccorso

Regions and the Circular Economy

Focus Germany Will Berlin Be the Global Capital of the Bioeconomy?

Focus Germany Bioeconomy Drives Resource Efficiency and Green Growth Interview with Christine Lang

External Relations Manager (International) Federico Manca, Carlo Pesso External Relations Managers (Italy) Federico Manca, Anna Re, Matteo Reale Press and Media Relations Silverback www.silverback.it info@silverback.it Contact redazione@materiarinnovabile.it Edizioni Ambiente Via Natale Battaglia 10 20127 Milano, Italia t. +39 02 45487277 f. +39 02 45487333

Columns

Case Histories

Advertising marketing@materiarinnovabile.it

Marco Capellini

Cars: Design’s Love Affair with New Materials

Giorgio Lonardi

The Budding Bioeconomy

Ilaria Nardello

The Blue Yonder Growing Little Blue Companies

Gianfranco Bologna

Federico Pedrocchi

Annual subscription, 6 paper issues Subscribe on-line at www.materiarinnovabile.it/moduloabbonamento This magazine is composed in Dejavu Pro by Ko Sliggers Published and printed in Italy at GECA S.r.l., San Giuliano Milanese (Mi) Copyright ©Edizioni Ambiente 2015 All rights reserved

Natural Capital The Unbearable Heaviness of Food Production

Innovation Pills Micropigs from Beijing Cover Bruno Munari, Nature Teaches us to Recycle. What is the Seed of Plastic? Drawings for the Neolite Exhibition, Triennale di Milano, 1991. ©Bruno Munari

renewablematter 08. 2016

CHILDREN

Will Invent a Green Future Interview with Gunter Pauli At COP21, consensus was sought before even starting. As a result, everything was watered down. But we can no longer wait: we have to buckle down to business, going beyond global agreements. We have to act at local level and in cities, working towards different business models and promoting the development of local areas.

edited by Sergio Ferraris

Gunter Pauli, author, teacher, activist, entrepreneur. www.zeri.org www.TheBlueEconomy.org Twitter @MyBlueEconomy Education Twitter @gunterpauli

Sergio Ferraris, an environmental and scientific journalist, is director of QualEnergia.it.

Gunter Pauli, an entrepreneur, economist, ecologist, Blue economy inventor and one of the promoters of the Kyoto Protocol, is very critical of COP21 in Paris: he has solutions devised over a period of twenty years with his own ZERI Foundation (Zero Emissions Research Initiative) that go beyond the international agreements on climate, aiming at solving both social and environmental problems. We met him in Milan a few days after the end of COP21 in Paris. COP21 closed in Paris a few days ago. What is your opinion on the agreement? “I decided not to attend COP21. For two reasons. First, I am convinced that both the US Upper and Lower Houses will not ratify the agreement reached by Obama, while the second reason is that I took part in the organization of COP3 – where the Kyoto Protocol was decided upon – and I remember that we all knew that in the original version of the agreement there was a very strong group of States, such as Europe and Japan, that really intended to move forward with climate protection. In COP21, consensus

was sought before even starting, so everything was watered down. When I saw the preliminary documents I realized that COP21 could only be a summit to meet interesting people, but nothing more. The first occasion to monitor any progress will be in four years’ time, but we cannot afford to wait that long. In essence, the COP21 in Paris was a summit that proclaims the end of global climate change negotiations. It is the end of the process started in Rio in 1992, and it is a good closure, because now we can start doing business in earnest.” Doing business in earnest, how? “We have to act in a tangible way at local level, in cities, with citizens and communities. We should not wait, but aim higher, unlike the international agreements that have failed. We have over 50 international agreements on environmental protection and the environment has never been as sick as today. We should not waste any more time with the global agreement model; we have to act now. I believe that one of the best things occurred during COP21 was the invitation by Anne Hidalgo – mayor of Paris –

Think Tank

to be used, it contains no obligations to be fulfilled. Nothing. So, at the moment we have no instrument to force anyone in the direction of climate protection. We expect people to go ‘green,’ but will we have to wait at least 25 years before they actually do so? And what happens in the meantime? The only way to push people to act now is, as I have already mentioned, to plan and implement business models dramatically different to the current ones.”

to thousands of other mayors throughout the world to discuss the best course of action about climate change. They can do a lot more than any national government because mayors decide how to act in cities.”

Gunter Pauli

blue economy 2.0

200 PROGETTI IMPLEMENTATI

4 MILIARDI DI DOLLARI INVESTITI

3 MILIONI DI NUOVI POSTI DI LAVORO CREATI Prefazioni di Catia Bastioli e Giuseppe Lavazza

A ben vedere, quelli che vengono celebrati come trionfi dal pensiero economico, che li allinea nelle statistiche sul Pil e sulla crescita, di frequente si rivelano fenomeni del tutto irrazionali. Utilizzando i rasoi usa-e-getta buttiamo ogni anno centinaia di tonnellate di titanio, estratte in miniere dall’altra parte del mondo e lavorate a temperature altissime con costi energetici e ambientali enormi. Quando beviamo un caffè diamo valore solo a una frazione minima della biomassa da cui è stato prodotto: il resto lo gettiamo nella spazzatura dove genera gas serra e danneggia i suoli. Per potabilizzare l’acqua spesso scarichiamo nei fiumi e in mare sostanze chimiche dannose per la vita acquatica. Tagliamo milioni di alberi per soddisfare i nostri fabbisogni di carta, e quando l’abbiamo usata ne ricicliamo comunque una frazione minima... Gli esempi potrebbero continuare, ma è chiaro che l’umanità spreca troppa energia e materiali, e nel farlo emette troppi gas serra. Il principale responsabile di questo stato di cose è il modello economico dominante, basato su una logica lineare di incremento dei consumi. Serve una svolta, e questa può arrivare dalla blue economy teorizzata e applicata da Gunter Pauli. Incentrata sull’imitazione degli ecosistemi e la circolarità dei flussi di materia, negli ultimi vent’anni ha ispirato migliaia di imprenditori che in tutto il mondo hanno implementato progetti e generato milioni di nuovi posti di lavoro. Questa nuova edizione interamente rivista e aggiornata di uno dei classici della scienza della sostenibilità dà conto degli ultimi sviluppi, e delinea prospettive ancora più esaltanti per quei leader, politici e aziendali, che saranno capaci di applicarle.

What instruments can we use to start a grassroots process? “The most important change is about the business model. If we carry on with globalization, increasing international trade on a global scale, climate change emissions will also increase. We have to work with local economies, grabbing local opportunities: if we do not change the business model, we will not tackle climate change and will not meet citizens’ needs at local level. Using goods coming from the other side of the world instead of producing them nearer to us makes no sense at all.” 17/11/15 15:45

Available in English: tinyurl.com/hfgs2at Available in Dutch: tinyurl.com/gvekzvj

You reckon that fighting climate change, without clear direction, can have catastrophic effects. Why is that and what instruments have we got now, after COP21? “One of the challenges we are faced with is that the Paris agreement has no instruments

For example? “Let’s consider the photovoltaic sector. Everyone knows that ultimately solar power will be cheaper than fossil power, but the price drop is too slow and we need to speed it up. It is a process that needs another kind of approach, different to those taught in business administration master’s degrees, where attention is focussed on one thing at a time, such as CO2, water, electricity and cars. If we deal with only one aspect of production, it is impossible to come out of the pollution and climate change ‘trap.’ We have to work in the same way as nature does. We have to turn all business models in ecosystems, which are much more efficient than we might think. Actually they are much more so than any other systems designed by engineers or managers. I believe that the main issue is changing business model.” But how can we do that? “First of all we have to meet local needs with local solutions, wherever possible. It is necessary to create economic development not from exports, but by acting on local needs. In the USA, for instance, 25% of children are born into poverty. It is not acceptable that in the richest country on earth, one quarter of the newborn is poor right from the start of their existence. Today we can see clearly the limits of resources and how we are multiplying the effects on local economies. Importing salmon from Chile, apples from South Africa or computers from China, in the name of economic interests, means impoverishing whole areas, whilst we should put confidence in poorer people, by developing such areas. Nature has been doing that from time immemorial. Ecosystems fulfil local needs with local resources. We have to learn to live within certain limits, which does not mean going back to the Middle Ages or the Stone Age and living in poverty.” That’s good, but in reality are there any practicable solutions today?

renewablematter 08. 2016

“Yes, there are. Let’s consider, as an example, a cup of coffee, which is a product marketed at global level, like many others. When we drink a coffee, we only consume 0.2% and the residue – 99.8% of the product – should not be thrown away because it is a resource. Spent coffee grounds can be used as fertilizer for mushroom farming and the waste of this production can become, in turn, protein for chicken farming. In this way we have three products instead of just one, and since the world production of coffee is ten million tonnes, we will obtain three times as many products. But, in order to do so, coffee must not be sealed in aluminium capsules, as it is now happening in the global trade, but put in thistle-based bioplastics, which can be produced locally and make possible reusing coffee. In this way, local economy is promoted, generating an income for local people. Today, instead, we embraced the opposite way of thinking, externalizing all environmental costs and using international trade only.” So is Europe in the wrong when it believes that in order to get out of this crisis it should export more? “Germany, for example, depends on exports and for this very reason is ranking amongst the world’s ten countries for employment levels. But in other countries, no employment is generated and poverty goes up: this is a trap because in this way employment only grows in ten countries and migration increases. This happens in Italy as well, where peripheral areas, such as the islands have lost inhabitants for 25 years, because people do not see any future there. It is necessary to find a balance between trade and local needs. Italy is an interesting case in point because it is one of the very few States that has actively moved in the direction of the bioeconomy. One of the things we should do is reconnecting agriculture with the industry. Today we regard agriculture as the past, thinking that it does not generate economic development. Far from the truth. Suffice it to look at the food production sectors and those for the production of machineries for such uses. We need to integrate the primary sector with the secondary one, by producing value in our economies. We need to remind ourselves that growth is not made of absolute numbers. Today we are no longer aware of the increase of the overall value because globalization and international trade push us to think about cutting costs only. For this very reason, most Italian businesses produce overseas and not at home and this is why we should find this new balance. The question is: how many advantages from

agriculture, fishing and mining can benefit the production of goods at local level?” A new balance for new advantages. But on what scale, given that the global one has some limitations? “The national level does not work either. We need to work on the regional model and identity like the European Union did. I believe that when we invest in the regional identity, the local economy can grow stronger, as opposed to investing in a globalized economy. Although there are some contradictions, think of water for example. We invested billions of euros in local infrastructure for water resources, but we buy water in plastic bottles, made with oil and marketed by international brands at a price fifty times more expensive. Developing such economies does not make sense. The experience we carried out with ZERI foundation in several areas of the world showed us that a different economy not only is possible, but it is also the only way to reach full employment. Today people are surprised when they hear the phrase ‘full employment’ and most politicians say that it is impossible, but if people think that from the very start, obviously their target will never be achieved and percentages such as 10, 15 or 20 of unemployment will be regarded as acceptable. Today, in Spain for example, where they believed that thanks to the global economy they could halve unemployment, 25% of young people have never had a job in their life. What kind of society is created when priority is given to global competitiveness and international trade? When people tell me that they own nothing therefore they can do nothing I reply: ‘Look again’.” We are used to high energy intensity. How can we even think of carrying on having enough wellbeing with lower energy intensity? “High energy intensity is taken for granted, so it becomes a need. An example. Industries need energy to produce compressed air, but the most efficient air pump on Earth is the whale which is able to compress hundreds of litres of air with 6 volts of electricity, without maintenance, for 80 years. What engineer can today reach a whale’s efficiency? This is what we should

“Whales” by Simon Child, the Noun Project

Not only is a different economy possible, but it is also the only way to reach full employment.

Think Tank

realize. We think in an inefficient manner and we are far away from other species’ way of thinking. Pumping air in the same way as whales do could save us 90% of energy used in the process. This is no small thing, given that air compression represents 10% of industrial consumption. So we can go from 10 to 1% just by learning from whales, thus saving costs and energy. We think we are efficient only when we do not compare our efficiency standard with those of nature. I am convinced we created the need of high energy intensity because we accepted inefficient energy planning as normal.” It is all very well for whales and industrial processes. But what about day-to-day life? “Our homes have huge potential. 80% of everything we use in our homes today is fuelled by DC, but we use 220 V AC. This is because we want to centralize the production of electricity, transmitting it to long distances, but this is highly inefficient. Let’s consider, for example, the case of PV-powered LEDs. PV power generates DC that is converted into AC and reconverted in DC to power LEDs. A double conversion means double waste. We have not got small DC networks in our homes so we lose 20%-30% of electricity in conversions. This does not make sense when there are solar panels on the roof.” How can we divulge these ideas, this vision, in order to convince businesses to use them? “We need to involve market leaders. In Holland, for example, the second electricity distribution company, Eneco, decided to promote the supply of DC to new city areas. Cities are interested in using their own electricity in the best possible way. They are not interested in transporting great amounts for long distances. Cities are concerned

about obtaining electricity at the lowest cost, in a stable manner and if possible from renewable sources. Even the large home appliance companies are increasingly interested in DC and have specialized engineers in DC studying how to use it, giving up AC. Then it is necessary to develop demand from consumers to promote such transition. Cities, for example, can promote the use of LED systems without inverters or transformers, rapidly imposing these new standards to increase efficiency. But a connection is still missing: most engineering students do not learn anything about DC and its advantages. If we do not educate and stimulate minds in this direction, the next generation of creative minds will lose this and other challenges.” By way of conclusion, you have six children: is there something we can do, besides what you already told us, for the next generations? “I believe that as a father my greatest responsibility is not to teach things to my children but that of inspiring them. We have to inspire children with ideas that they cannot see on TV today, ideas that are not advertised. We have become expert in spreading information, even to our children, only bad news, such as that of the extinction of many species, the destruction of whole forests, economies and jobs. The urgency for the next generation is to tell them about the incredible things that are possible and that our generation did not do. Every day, we have to devote three minutes to inspire children, to tell them stories, to share. I believe that this world can go on in the right direction if we put international politicians, bankers, stock traders behind us. We have to start to inspire our children.”

The urgency for the next generation is to tell them about the incredible things that are possible and that our generation did not do.

renewablematter 08. 2016

RETHINKS BUILDINGS Interview with Victor Olgyay

At Rocky Mountain Institute, in Boulder, Colorado, a Centre of Excellence amongst 4,000 mt peaks. Here they research into how to apply the circular economy to planning and maintenance of both new and existing buildings, large and small. A business that can generate money and energy. edited by Emanuele Bompan

Victor Olgyay is an architect, and RMI expert on energy use in the new and existing commercial building sectors. He has worked on hundreds of projects, including the deep energy retrofit of the gigantic Empire State Building.

Brett Bridgeland, RMI senior staff, specialized in smart buildings.

Boulder, Colorado. Mountains half-surround this small city at the feet of the Rocky Mountains. Not far away shine the higher peaks, some 4,000 metres tall. 30 years ago, this amazing mountain range and its wilderness beauty has inspired the creations of one of the most interesting American think-tank for problem-solving in the energy sector, the Rocky Mountain Institute (RMI), created by Amory Lovins, an American physicist, environmental scientist, and writer. Renewable Matter visited RMI in Boulder to talk to Victor Olgay, son of the famous homonymous architect and author of the first book on bioclimatic architecture. Victor is an architect, and RMI expert on energy use in the new and existing commercial building sectors. He has worked on hundreds of projects, including the deep energy retrofit of the gigantic Empire State building. The Empire State Building is an example of how critically important the role of existing buildings is in energy saving practices. Brett Bridgeland, RMI senior staff, specialized in smart buildings, and has also joined our pleasant discussion on how buildings fit in a circular economy vision.

Rocky Mountains ÂŠWikiCommons / Wolf Wiggum

The Man Who

Victor Olgyay ÂŠBompanEmanuele

Think Tank Emanuele Bompan, journalist and urban geographer, has dealt with environmental journalism since 2008.

Rocky Mountain Institute, www.rmi.org

Amory Lovins, Reinventing Fire, Chelsea Green Publishing 2011

When we look at a building we don’t see what it really is: a source of materials (sewage, construction material, waste, discarded products – carpet, windows, etc.) and an opportunity to reduce energy consumption and cut emissions. Victor Olgyay “At RMI, we try and look at buildings not as single item but as larger ecosystem (e.g. buildings with other buildings, buildings related to urban infrastructure and relationships of building with electricity and mobility). “In Reinventing Fire (a book by the founder of RMI, Amory Lovins, and a roadmap guiding RMI initiatives) we describe the role of buildings related to energy utilities, mobility and industry. Today when most people look at buildings they don’t use an integrated approach, they see these elements as unrelated and linearly dependent, rather than systematically interdependent. In Reinventing Fire, we show how a systems approach provides the opportunity to eliminate the need for oil and coal, and allows us to develop a robust growing economy based on efficiency and renewable energy. “For example, today buildings and automobiles should be seen as connected, with electric cars acting as electrical energy storage for the building. Today we have so many inefficient buildings they represent a great opportunity to save energy and money, and to create new business, that tackling efficiency with deep or light intervention.” You are saying that the immense, energy intensive, real estate stock can become

renewablematter 08. 2016

Building management is key to operational energy savings. For new buildings, we need to innovate design. Our buildings can work better with better design.

Project Residential Energy+, www.rmi.org/ residentialenergyplus

more efficient even with light retrofits? VO “If we get 20% increase in energy efficiency across a lot of buildings, we create a great impact. Therefore now RMI is now looking how we can get, broad, quick returns on investments in a lot of building. Such interventions should be easy to do, and not cause headaches for building owners. Simple, light efficiency projects that can be done very easily and get a quick return on their investment will be popular and spread broadly. “Of course we also see the opportunity for extensive retrofits. We are working on communities, networks and campuses of building, that are becoming highly energy efficiency, zero-net energy, and some even produce more energy than they use. These large networks of efficient buildings can become an asset to the electrical grid, a different node in the electrical system. Interconnected groups of buildings can provide thermal and electrical storage, demand response, frequency regulation, and other valuable commodities that help the electrical grid run smoother. “But the light building retrofit is paradoxically quite difficult. Getting broad, quick and easy intervention is tough. You need to convince many people, with a wide variety of buildings that have different energy use patterns. But we believe there is a real opportunity to do broad retrofits by optimizing and accessing the informational infrastructure of buildings. We are targeting systems that allow us to have a better understanding of how to operate buildings in an efficient manner. Today there are many automated processes, but still they are often not properly manned or maintained. We need to learn to run our buildings well. Rather than spent lots of money on innovative materials, or in expensive envelope improvements, we need to examine how we can use computers and data in a clever way.” Therefore you suggest that rather than innovating material, we need to innovate building management. VO “Yes. For existing building, absolutely. Building management is key to operational energy savings. For new buildings, we need to innovate design. Our buildings can work better with better design. Designing with the climate can save a lot of building energy. Just design simple walls that are well insulated and work well, think about the airflow in the building, use quality windows that are shaded in the summer and let beneficial solar heat in the building when desired and you can have significant energy reductions. All these things are free; it’s a matter of smart design. We can build zero energy houses with the materials we have right now,

Behavior is central. It is interesting that people generally lack awareness about energy in buildings. People are cognizant about their car’s mileage-per-gallon but not as aware of the energy consumption of their homes.

we don’t really need any new super-efficient materials. “Of course some products like PV panels have had impressive efficiency improvements and a very welcome drop in costs. These are great materials, and there are a number of other good products that are coming to market that make energy efficiency easier and more cost effective. Even to get to super efficient passive house standards we need good design, and careful details, the materials we use can be quite ordinary.” We humans are key to fixing our buildings and make them live longer and more efficiently. VO “Behavior is central. It is interesting that people generally lack awareness about energy in buildings. People are cognizant of their car’s mileage-per-gallon but not as aware of the energy consumption of their homes. Without some sort of visible indication of how much energy they are using, there is little incentive for efficient behavior. This is too bad, because energy efficiency results in Negawatts (or energy saved), a powerful and unseen solution that can greatly reduce GHG.” What can be done? VO “We have a project called Residential Energy+, a Rocky Mountain Institute initiative enabling industry actors to grab the $150 billion residential energy upgrades market opportunity, and meet the top unmet demand among homeowners: improved home energy performance. Residential buildings represent about one-fifth of U.S. greenhouse gas

Think Tank

Brett Bridgeland ©BompanEmanuele

find out on how others are saving energy. We are working in Chicago with the Chicago Retrofit Initiative, which has a target of 20% energy savings, in 5 years. One building owner installed a smart energy control system and in the first year they saved 18% of their total energy. ‘Had we known this we would have done it a long time ago,’ they said. When their story got out, several more building owners immediately imitated it.”

Design should include the potential reuse of the built structure, rather than tearing it down. For example, the parking garage at the Boston Convention Center is designed in such a way that can be turned into office spaces.

emissions, with a reduction potential of over 300 million metric tons annually. Despite progress and significant efforts by multiple industry actors, the diffuse residential efficiency market has not yet reached the scale necessary to mitigate the effects of climate change. RMI therefore seeks to motivate and empower homeowners across the United States to invest in home energy upgrades – through energy efficiency and renewable energy – as part of property renovations. “Once they can visualize information, people become aware and act. We call it ‘the Prius effect,’ from the famous hybrid car: you see the effects of your style of driving and you automatically change your behavior. Particularly in the residential sector it is necessary that energy visualization becomes that simple. Maybe with an app: we love gaming and gadgets. So why not?” However, can sensors and automation prevent energy waste from our bad behavior? Brett Bridgeland “Not always. Computer scheduled heating does not always match what is needed. Light sensors don’t always work and sometimes break. Or we don’t do efficient maintenance. Therefore even with automated buildings there will be always a human component. Big data is growing. We need to get data out of buildings, and into a usable form for the people to operate them.” Let’s focus on US. Is there a rising interest in light retrofit? VO “There is. And interest grows when people

How can buildings fit in circular economy model? BB “In an RMI publication I wrote we categorized buildings as having three components: structure (concrete, steel, wood); products (furniture, finishes, carpet), and building operation. We wanted to have any every component to be circular. “Let’s start with structure. Design should include the potential reuse of the built structure, rather than tearing it down. For example, the parking garage at the Boston Convention Center is designed in such a way that can be turned into office spaces. Designers need to think ahead, how to reuse a structure while keeping it intact. In Boston they knew that the Convention Center might revitalize the neighborhood, so changing the parking structure could be an economic opportunity to adapt to a higher value use. “For products consider for example carpet: over time it wears out and needs to be replaced. So in this case it is fundamental to choose a material that can be easily removed, deconstructed and used again to produce new materials, new carpet in this case. There are many other product examples. And as far as building operation is concerned, it is necessary to keep your building ‘tuned up’, operating efficiently, and update system software and components to reduce consumption as much as possible.” Thinking ahead is key. BB “And think circular. For example the prospect of building component prefabrication can boost the circular material flow. When we industrialize the way we produce wall system; we can be constructing standardized components (while increasing construction quality) that can help to reduce material consumption and promote reuse. We save more materials and more energy. There is a new world out there.”

renewablematter 08. 2016

45 and Still

GOING STRONG

Oftentimes the most famous signs conceal bizarre stories we ignore. Behind them there are not only experts but real people and a culture of their time.

by Mauro Panzeri

Three-Dimensional Effect Version

It is a “common” symbol, a recognized iconic object that is part of our pre-ecological imagery. By the way, for graphic designers such symbol is defined as “trademark” and not a “logo” because it has no text, even though “logo”, in the Anglo-Saxon culture means “trademark”, but enough with it. Such recycling logo is now turning 45: it was born in the USA in 1970, which was also the year in which the first Earth Day was celebrated. In that year, CCA (Container Corporation of America, today Smurfit-Stone Container Corporation), a large company producing packaging with recycled paper, decided to divulge in various universities a call for entries for a graphic design competition aimed at designing a symbol for products on recycled paper encompassing an environmental message, to be used by all those who needed it (public domain). The mind behind such designing ideas and CCA’s communication was Walter Paepcke, CCA Chairman and above all a philanthropist who, in 1937, had already

sponsored the resurgence of Bauhaus in the USA (The New Bauhaus, which later became the Illinois Institute of Technology) and summoned the German graphic designer Herbert Bayer to organize the Design Conference in Aspen in 1951. Paepcke and Bayer are then key names to grasp the origin of the symbol in question. But one name is still missing. 500 young designers took part in the competition. At the Aspen conference of the same year, with Bayer and Saul Bass as members of the jury, the winner was announced: it was Gary Anderson (Hawaii, 1947), a young town planner architect from the University of Southern California. This university – and this applies to all training of those years – took part in Modernism, in programmes and the aesthetics of the reformed Bauhaus. The winning logo, according to the critics of the time, was in line with the great masters’ criteria: geometric and functional. Actually, Gary Anderson had that kind of background, but he also followed

Think Tank A Google Page, Today: Original Symbol’s Illustrational Changes

Gary Anderson (right)

Möbius strip; photo by David Benbennick, C.C.3.0

countercultural movements of the time and new aesthetics, drawing inspiration for this logo from the Möbius strip and M. C. Escher in San Francisco. The aesthetic aspect of such logo is better understood within such double cultural reading, poised between Modernism and new visual cultures: a symbol crossing two worlds. As this logo became widely used, Anderson left the USA and, after a failed attempt to get the symbol registered, its creation is generically attributed to CCA’s graphic department and the logo became public domain, as initially intended by the competition. It was not until the 90s that the truth was fully disclosed, thanks to an article published in Print, the well-known American magazine. The now seventy-year-old, multi-award winning, globetrotting accomplished town planner Gary Andersen, with an important professional and academic curriculum, is “morally” reunited with his creature and so are we. While contemporary iconic culture has appropriated the symbol transforming it beyond recognition, the original one, for specific and non-illustrative purposes, is still very much alive and kicking.

Reunited with Its Author, from Resource Recycling, 1999

Gary Anderson’s Original Symbol

renewablematter 08. 2016

Leading Big in Corporate Social Responsibility: A Systems View by Marta Ceroni

The business world must rethink its role in society and redefine the boundaries of its social responsibillity. Only in this way will it be able to turn challenges requiring more courage – such as climate change – into economic opportunities.

Marta Ceroni is the Executive Director of the Donella Meadows Institute, a non-profit whose focus is fostering systems thinking for the design of sustainable economies. A forest ecologist by training, Marta worked as a research faculty at the Gund Institute for Ecological Economics at the University of Vermont.

Researchers at the Stockholm Resilience Center call it the “Great Acceleration”. It’s a surge that has been observed since the 1950s in the data of population, exploitation of resources, use of fertilizers, carbon pollution, fishery depletion, biodiversity loss, and more. Until the 1950s the effects of human activities were by comparison a small thing, almost undetectable.

1. Hawken P., Blessed Unrest: How the Largest Social Movement in History Is Restoring Grace, Justice, and Beauty to the World, Viking, 2007. 2. Winston A. S., “The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World”, Harvard Business Review, 2014.

“In a single lifetime, humanity has become a planetary-scale geological force,” says Will Steffen, who led the study in collaboration with the International Geosphere-Biosphere Programme. Meanwhile, the International Commission on Stratigraphy is evaluating whether to add the Anthropocene as a geological epoch, which could officially end up next to the Holocene and Pleistocene in schoolbooks. The Anthropocene is also a period of raised global awareness. It sees the birth of large social movements (Paul Hawken talks of at least one million of organizations invested in social change worldwide)1 and the beginnings of circular and bio-based economies. It is also an unprecedented time of convergence across borders as signaled by the climate accord in Paris, the launch of the UN’s Sustainable Development Goals, and the encyclical Laudato Si’ by Pope Francis. At this special time of acceleration and supranational commitments to sustainability, the business world is increasingly reflecting on its role in society and redefining the boundaries of its social responsibility. A new consciousness is seeping through

parts of the business community, questioning conventional bottomlines, leadership styles, workspaces, and the very fundamental belief of the necessity to grow endlessly (think of Patagonia’s campaign “Don’t Buy This Shirt”, which coincidentally brought a spike in sales). In the meantime, floods, droughts, and social unrest linked to climate change is costing businesses dearly. Unilever, the Anglo-Dutch multinational whose products enter the homes of two billion people, estimates that drought, reduced agricultural productivity and the consequent increase in food prices cost the company $400 million annually. In the face of these “mega-challenges” many in the private sector are concerned that political commitments won’t be sufficient to ignite timely action. “Green consumption,” while on the rise, has failed to amount to a transformative force that could shape sustainable production. Hence the need and the urgency felt by socially responsible companies for a more active and far-sighted role on the part of business. So what is the next big game for corporate social responsibility? In his book, The Big Pivot, Andrew Winston recognizes that it is a unique moment for the private sector, the time to re-discuss worldviews and the very reason for a company to exist.2 According to Winston the role of business should be that of tackling a problem and then use business ingenuity to make the solution profitable, as opposed to creating problems in the first place (e.g. epidemic in diabetes related – at least in part – to sugary beverages available on the market).

Think Tank

Donella Meadows Institute, www.donellameadows.org Stockholm Resilience Center, www. stockholmresilience.org International GeosphereBiosphere Programme, www.igbp.net

3. Senge P., Hamilton H., Kania J., “The Dawn of System Leadership”, Stanford Social Innovation Review, Winter 2015, available online: tinyurl.com/h6osp98 4. Meadows D. H., Thinking in Systems, a Primer, Chelsea Green Publishing, 2008. 5. Meadows D. H., Leverage Points: Places to Intervene in a System, courtesy of Donella Meadows Institute, available online: tinyurl.com/oooxto5

If business more and more sees itself as part of the solution, does it have the leadership, vision, and incentives, to take on this high-level problem solving? A vast majority of public companies, especially in the US, still operate under strong pressure to maximize short-term profits. And despite efforts by an increasing number of companies to reduce their environmental footprints, only in a few cases these interventions reflect a systemic approach, influenced by an understanding of reality and of the extent of the necessary transformation. Social entrepreneur and academic Henk Hadders, describes the challenge in this way: “We still build the same old institutions to solve new complex problems with the same old set of rules, driven by the same old culture with much the same old school managers and leaders in place.” The pivotal moment is emerging as one in which the most successful companies will be those who won’t only manage to navigate through growing uncertainty but the ones who will open the doors to innovative models and turn daunting challenges like climate change into economic opportunities. This is not an easy and charted course and calls for new leadership that is attuned to how complex systems operate, which is open to envisioning alternative futures, and is capable of building strength and vision from the base. Peter Senge, Hal Hamilton and John Kania call “The Iceberg Model, inspired by Donella Meadows work is always a reminder for me to go beyond the tip in defining a problem and finding places for intervention.” Marta Ceroni. Graphics by Sarah Parkinson, courtesy of Donella Meadows Institute.

this set of skills “system leadership” in their paper “The Dawn of System Leadership”.3 Three qualities stand out in systems leaders: the ability to see the whole system (instead of only its parts); the ability to facilitate authentic reflections; the ability to move from solving problems to co-create a different future. Anyone who embarks on the path of personal growth and system leadership will encounter Donella “Dana” Meadows on the way, lead author in 1972 of Limits to Growth. The book is one of the best known (and accessible) systems analyses ever published, and focuses no less than on humanity’s fate as population, economy, and resource extraction continue to grow within our finite planet. The study was unjustly accused of catastrophism because it foresaw the collapse of human civilization sometime after 20202030 unless humanity slowed down the pace of economic growth and human population. In the twenty- and thirty year updates that followed, the authors confirm this worrisome direction and realize that data alone, however accurate and reproducible are not enough to shake political and economic will. High potential, according to Meadows, lies in cultivating human qualities that catalyze deep change, qualities such as visioning, the ability to create networks of people with common goals, the ability to create new flows of information and transparency, the ability to remain humble and open to learn, and finally the ability to love. Meadows devotes an entire book, Thinking in Systems,4 published posthumously in 2008, to these qualities and to the practical understanding of systems for change makers. “As our world continues to change rapidly and become more complex, systems thinking will help us manage, adapt, and see the wide range of choices we have before us,” writes Meadows in Thinking in Systems. Many of these choices have to do with recognizing the strength of leverage points in a system. “These are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything.”5 One such point of leverage, and one that is most often ignored, is a system’s ultimate goal. Not to be confused with a system’s stated goal, this is what in the end the system produces as a result of its own workings. Because we are born into systems and we inherit them from the previous generation, we rarely ask what the purpose of a family, a school, a company, a monetary system or an economy is. “If you define the goal of society as GDP” writes Meadows, “that society will do its best to produce GDP. It will not produce welfare, equity, justice or efficiency unless you define a goal and regularly measure

renewablematter 08. 2016

Think Tank Places to Intervene in a System (in increasing order of effectiveness) 12. Constants, parameters, numbers (such as subsidies, taxes, standards).  11. The sizes of buffers and other stabilizing stocks, relative to their flows.  10. The structure of material stocks and flows (such as transport networks, population age structures).  9. The lengths of delays, relative to the rate of system change.  8. The strength of negative feedback loops, relative to the impacts they are trying to correct against.  7. The gain around driving positive feedback loops.  6. The structure of information flows (who does and does not have access to information).  5. The rules of the system (such as incentives, punishments, constraints).  4. The power to add, change, evolve, or selforganize system structure.  3. The goals of the system.  2. The mindset or paradigm out of which the system – its goals, structure, rules, delays, parameters – arises.  1. The power to transcend paradigms.

Donella Meadows

Left page: The Great Acceleration. Reference: Steffen W., W. Broadgate, L. Deutsch, O. Gaffney e C. Ludwig (2015). Map & Design: Felix Pharand_Deschenes / Globaia.

6. The letter can be accessed at: www.statoil. com/en/NewsAndMedia/ News/2015/Downloads/ Paying%20for%20 Carbon%20letter.pdf 7. Hall S., “Exxon Knew about Climate Change Almost 40 Years Ago”, Scientific American, October 26, 2015. Available online: www.scientificamerican. com/article/exxon-knewabout-climate-changealmost-40-years-ago/ 8. Anderson R., Mid-Course Correction: Toward a Sustainable Enterprise, The Interface Model, Peregrinzilla Press, 1999.

and report the state of welfare, equity, justice, or efficiency.” Explicit goals and their measurements are something that socially responsible companies have understood for a long time when choosing a triple bottom line approach. But there’s something particularly transformational, from a systems perspective, in making it easier for companies to pursue alternative bottom lines. Thirty US states have passed laws that allow the formation of “Benefit Corporations”, companies that are not required to maximize profits and can decide to reinvest in community and the environment without the risks of being opposed or slowed down by shareholders. At the moment it is estimated that there are 1,400 benefit corporations in 42 states, all committed to redefine the boundaries of their success and their social responsibility. Another lever for change that Meadows puts high in the list of interventions, are the rules of a system. “If you want to understand the deepest malfunctions of systems, pay attention to the rules, and to who has power over them,” writes Meadows. One rule companies are starting to advocate far more intentionally for than in the past is a price on carbon. And one thing is seeing Ben & Jerry’s, the ultra-progressive Vermont ice cream company, doing this type of advocacy, another thing is seeing six large oil companies – BP Plc, Royal Dutch Shell Plc, Total SA, Statoil ASA, Eni SpA and BG Group – writing Christiana Figueres, Executive Secretary

of the UN Framework Convention on Climate Change, demanding a price on carbon.6 Exxon Mobile, by hiding its own information from the public and spending millions to promote misinformation,7 was misusing another highly important leverage point. Meadows describes the critical role of information flows as following: “If I could, I would add an Eleventh Commandment: Thou shalt not distort, delay, or sequester information. You can drive a system crazy by muddying its information streams. You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.” But the point of intervention that has the most potential to stir profound change, and also the hardest to move, is the mindset out of which the goals, rules and workings of a system arise. Ray Anderson, the late CEO of Interface Carpet, the leading designer and maker of carpet tile, realized in 1994 that his company was nothing but the direct extension of the petrochemical industry and at sixty years of age decided to change course. In his book Mid-Course Correction8 he writes: “We have chosen Dana Meadows’ most difficult and most effective place to try to make a difference. The reinvention of Interface reflects the new and more accurate view of reality, a new mindset for a new industrial system. We are going about this reinvention ambitiously, aspiring to become the sustainable corporate model for the next industrial revolution.” This “new mindset,” which recognizes the finite capacity of ecosystems to absorb pollutants, which aspires to the long term and accounts for environmental costs, brought the 5,000 employee company to a complete transformation of its production and supply chain, and to being well on route to carbon neutrality in 2020. But Meadows reminds us that the “new mindset” is also one of embracing complexity at a deep level and letting go of the notion that, once we bring them down to their bare bone elements, systems can be predicted and controlled. “We can’t impose our will upon a system. We can listen to what the system tells us, and discover how its properties and our values can work together to bring forth something much better than could ever be produced by our will alone.” Ultimately, in an accelerating world and on the way to leading big in corporate social responsibility, the question won’t be so much how does business become part of the solution, but how does business reorganize itself to be a vehicle for system change.

renewablematter 08. 2016

What is the Real Cost of PALM OIL Production? 100,000 fires from January to date, harm to health for entire populations, environmental degradation and loss of biodiversity. To put a stop to all this, the only option is to promote sustainable production, which currently represents only 20% of the total.

Policy

by Roberto Giovannini

Roberto Giovannini is a journalist dealing with economy, society, energy, the environment, the green economy and technology.

Roundtable on Sustainable Palm Oil RSPO www.rspo.org/about

It is used for everything and it is found everywhere: detergents, cosmetics, soaps, biscuits, snacks, ready-made meals, Nutella, ice creams. We are talking about palm oil, one of the world’s most versatile, widespread and controversial foods. Because the palm with its oil-producing berries – a native plant of Africa later transplanted for commercial reasons to South East Asia over a century ago – flourishes in the tropics, it is relatively easy to farm in industrial plantations and thrives in land cleared by men from tropical rainforests, one of the planet’s main reservoirs of biodiversity. As a result, within a few years, hundreds of thousands of hectares of primary forests were wiped out. It is common knowledge that, to this day, lands are cleared by lighting raging fires. Since January, over 100,000 fires have been detected, concentrated on the islands of Borneo and Sumatra: the satellite images have been showing a myriad of fires for weeks, that for a long time extended towards Singapore, Malaysia and the South of Thailand. The disaster is made even worse by the fact that such forests grow on peat deposits. When they burn, they release CO2 and are very difficult to extinguish. It is also a health calamity: serious respiratory problems for at least half a million people and severe environmental disaster, considering CO2 emissions and the devastating destruction of biodiversity. Therefore, must palm oil be bluntly condemned as one of the main catastrophes generated by human greed? Things are slightly more complicated: as is the case for all complex problems, sometimes it is not easy to find straightforward and simple solutions, assuming they exist. Basically, this is the RSPO’s (Roundtable on Sustainable Palm Oil) argument, an association of volunteers created in 2004 to start a less destructive palm oil production. The idea is to involve all players of the global oil supply chain (from farmers to refiners, from industries to distributors, from banks to consumers and NGOs) in order to set up sustainability production standards. Those who respect RSPO’s criteria and policies can legally use

their certification. So far, the association has certified over 12.5 million tonnes of palm oil, about 20% of the world production. The objective is to dramatically increase such percentage, for example by reaching 100% share of sustainable palm oil of European markets imports. Because, as the RSPO’s spokespeople explain, “The only alternative to palm oil is sustainable palm oil.” But not everyone, as explained below, agrees on that. Many environmental associations deem the idea of “sustainable palm oil” as an oxymoron (i.e. a contradiction in terms, a philosophical impossibility on principle.) Others criticize, more or less radically, some of the policies and procedures implemented by RSPO, hoping to reform them. Lastly, still others have formed an alternative association for the certification of sustainable palm oil, based on more stringent criteria. The fact remains that the industrial production chain of palm oil exists, it creates jobs and an income to 3.5 million people in Indonesia and Malaysia alone. And – whether you like it or not – for these two countries it represents a fundamental factor impossible to cross out at the stroke of a pen without causing all sorts of destabilizations. Considering that, worldwide, there is a huge demand for such oil, such demand needs to be met, in the short term, by other countries which will suffer the same environmental consequences. Quite apart from the fact that eliminating palms could turn out to be a worse solution than the evil itself: indeed, oil palms has a very high yield compared to any other vegetable oil. One hectare of land used for palms produces almost 3.6 tonnes of oil, which is ten times more than soy or olive oil and five times more than rape oil. In other words, in order to produce oil used in the industry by giving up palms and using other productive plants, much more land would be necessary, as well as chemistry, energy and deforestation, as Stefano Savi, RSPO’s director of Global Outreach and Engagement explains. Let’s summarize the reasons of the overwhelming success of palm oil over

renewablematter 08. 2016 the last few decades. How did palm oil manage to become the most widespread oil in the world? First and foremost, as we said before, it is due to its yield and cost-effectiveness, compared to other vegetable alternatives. Second, because of health-nutritional reasons: in the past the various industries used the so-called hydrogenated fats (for example margarine) which are produced with a chemical process starting from some oils, that can be stored for long periods and are inexpensive. The problem is that such hydrogenated fats contain trans fats, harmful for our health and, starting from 2005-2006 they have been rejected more and more by consumers and later by the EU and the US governments as well. Palm oil, instead,

The so-called “Greenpalm” certification allows those using “dirty” palm oil to appear as a “sustainable” producer or user.

has no such risks, although like all saturated fats its unlimited use has negative consequences. The third reason is about the industrial process. “Palm oil – as Savi explains – is almost solid at room temperature, so it can be used for preparations for which olive oil or other vegetable oils cannot be used, for example for biscuits or spreads.” Of course RSPO does not deny that the spreading of palm oil plantation went hand in hand with heavy deforestation, as the recent choking haze testifies; despite moving away from Singapore and Kuala Lumpur, is still worrying. “It also depends on the season – Salvi explains – the dry season encourages fires. In any case, the so-called slash and burn is unfortunately a widespread practice in many developing areas of the planet in the tropics. Moreover, Indonesia has many peat bogs: peat is the organic material that has set for years in wet and marshy areas. It is a highly flammable layer of soil. When it burns it produces a lot of smoke and carbon dioxide and it is very difficult to extinguish.” Actually, both in Indonesia and Malaysia it is forbidden to carry out such practices to turn forests into industrial plantations, and, on paper, a special authorization must be obtained by the relevant ministry. But of course in such vast and little developed countries (and I would add, with a high corruption rate), it is virtually impossible to check. “We, at RSPO, – the representative of the association adds – enforce that wherever there is a legal authorization, palm farming must keep part of high conservation value primary as well as secondary forests. Our guide lines state very clearly that burning cannot be used to develop concessions, it is only to be in used in extreme circumstances, for example when parasitic invasions threaten the plantation. Occurrences that must be dealt with controlled burning and RSPO must be informed in all cases.” What about if burning happens in certified plantations? “Obviously a marvellous control system is of very little use if the area around the concession is rife with burning as it is currently the case. Anyway, when a possible fire is identified, RSPO asks its member in that area to go to that location with a camera connected to a GPS to assess the real situation on the field” Savi says. It is true that besides those cases where in situ assessment can carried out, normally RSPO only uses satellite images – and as a matter of fact, the latest available ones date back to December 2013 because governments in Malaysia and Indonesia do not make more recent ones available for public monitoring – cross-referring with geolocated data banks. “The bulk of our monitoring work is done by satellite and not by physical presence,” Savi clarifies, “and then members must submit their reports that can be checked in situ by us or by external organizations active in the area subscribing to an RSPO such as NGOs.”

Policy So, sometimes it almost feels like that the work of RSPO is similar to emptying an ocean with a teaspoon, even though Savi claims that significant progress has been made and that by examining satellite images of burning hotspots, in recent months certified plantations’ performance has been much higher than uncertified plantations’. One thing is certain, RSPO is a voluntary association, “the only punishment that we can apply to a member who doesn’t respect our rules is expulsion from the organization.” But this punishment does not completely satisfy RSPO’s management who prefers other methods. “On the one hand, the expulsion of those who don’t respect standards is fine to protect our image and our credibility, but it is not the right solution to transform the market into a sustainable one, our vision as an organization. We want to encourage members to abandon wrong practices. This is why until we see that there is a genuine interest in changing we try to be understanding with our members.”

Palm Oil Innovation Group (POIG), poig.org/

Will we be able to stop an economic mechanism that makes wholesale deforestation economically viable in order to produce oil cheaper than “sustainable” oil?

A moderate approach that has not convinced everyone. Greenpeace, for example, has openly accused RSPO of limiting itself to “certify the destruction” of forest and together with other associations, some producers and industrial users it has supported the creation of another certifying body, the Palm Oil Innovation Group (POIG) with stricter standards. Critics claim that RSPO does not oppose forest conversion, it does not care about greenhouse gas emissions deriving from palm plantations, it does very little to prevent forest and peat-bog fires, it is too lenient towards clear violations of its own standards. And that above all, through the so-called “Greenpalm” certification it allows those using “dirty” palm oil to appear as a “sustainable” producer or user. Most of the global production of “sustainable” palm oil (72% in 2012) is actually “Greenpalm.” In other words, it is exchanged on the basis of certificates – that in theory should be linked to a real quality of the oil produced sustainably – that end users can freely buy on the market for a modest premium. Consequently, for example, the confectionery industry can easily buy “dirty” oil, pay a premium to get certification and declare that it uses “Greenpalm” instead, considered “clean.” “Be careful,” Stefano Savi replies, “it is true that Greenpalm is a virtual certificate, but it is also true that each certificate is linked to one tonne of palm oil truly produced sustainably. A classic case is that of small producers who do not have physical access to a certified oil mill that can buy their production and grant RSPO certification. In this case, the only option they have is to sell their production as ‘non certified’ and at the same time sell online a Greenpalm certificate for each tonne of palm oil they have produced on their certified plantation. At this point, retailers, distributors and companies can buy

a Greenpalm certificate and link it to each tonne of non-certified oil used in one of the stages of the chain. Obviously we cannot state that that product contains sustainable palm oil, but there is an equivalent quantity of sustainable oil on the market.” Don’t consumers run the risk of being misled if they think they are buying a good which is only “indirectly” sustainable? “RSPO has set very strict rules. On the box of various products, depending on the stage, you can read that sustainable RSPO oil has been used or that by buying that product you support the production of sustainable oil.” But can we state that there have never been instances of certification nonchalantly granted to “dirty” productions? “Certification is checked, but as with any systems, RSPO’s is not flawless. But if you think that something is wrong you can contact a complaint panel and submit your proof. The panel publically assesses the claim and publishes all the information on the website.” As a matter of fact, RPSO welcomes criticism. “Any movement engaged in promoting sustainable palm oil is welcome,” Savi states, “we believe that in order to promote real change, not just niche change, we need inclusive involvement of all those operating in this sector, the best ones as well as the less efficient ones. Nevertheless, we have realized that some producers – due to the conditions in which they operate or because they are not able to adopt the best practices – are really interested in proving that they can do better. So this year, RSPO Board of Governors will present a new initiative called ‘RSPO Next,’ voluntary guidelines that satisfy the new need to stop deforestation and burning, and some social measures.” Finally, another tricky question. Will we be able to stop an economic mechanism that makes wholesale deforestation economically viable in order to produce oil cheaper than “sustainable” oil? And how? The reality is that today there is demand for more expensive sustainable oil – since famers must be economically motivated and refunded for the unavoidable higher costs due to certification – but in some markets low prices still prevail. Europe, for instance, is an excellent market for RSPO oil: by 2020, we aim at reaching 100% certified oil and the industry, consumers and governments are sending positive signals. Countries such as China, India and Indonesia itself have a long way to go yet. A lot will depend on the green evolution of public opinion in emerging countries. It would be important to find, within global agreements on climate and the environment, ways of appreciating the natural capital in tropical countries, means to incentivize them to protect forests rather than cutting them down.

renewablematter 08. 2016

The Complete Package? New targets for recycling and reusing urban waste, reducing food waste and redifining the very concept of waste. From an analysis of the EU text’s main points, a mix of cautious optimism and utter disappointment emerge. by Joanna Dupont-Inglis

Joanna Dupont-Inglis in February 2009 joined EuropaBio, the European Association of bio-industries, and since April 2011 she has directed the industrial biotechnology field.

UE’s plan of action for the circular economy, www.reteambiente.it/ normativa/23203/

On 2nd December 2015, the European Commission presented its new circular economy package containing a communication on the circular economy, together with a list of measures, and four legislative proposals on EU waste policy. The circular economy concept is generally described as one in which products and the materials they contain are highly valued, unlike in the traditional, linear economic model, based on a “take-make-consumethrow away” pattern. This production and consumption model is based on two complementary loops drawing inspiration from biological cycles: one for “biological” materials (which can be decomposed by living organisms) and one for “technical” materials (which cannot). In both cases, the aim is to limit the leakage of resources as much as possible.

waste management targets to be met by 2030, in particular by increasing the share of municipal waste for reuse and recycling to 65%, increasing the share of packaging waste prepared for reuse and recycling to 75% (with specific targets for various materials used in packaging), and gradually limiting municipal waste landfill to 10%. In addition, the Commission proposed setting minimum requirements for Extended Producer Responsibility (EPR) schemes and differentiating the contribution paid by producers on the basis of the costs necessary to treat their products at the end of their life. Monitoring of Member State compliance with targets as through early warning systems, together with a focus on reuse and prevention and a revision of the definition of waste, were also outlined as means by which to help “close the loop” for resources in line with the United Nations Sustainable Development Goals (SDGs) adopted in 2015.

Whilst most stakeholders continue to wade through the detail of the texts, several highlights stood out for many from the four legislative proposals. These include the setting of new

Since the European Commission put forward an initial circular economy package in July 2014 and subsequently withdrew the legislative proposal on waste included in the package

Policy

in February 2015, hopes and expectations have had plenty of time to grow in anticipation of a groundbreaking and transformative proposal. There was also optimism from many that the new, re-tabled proposal would focus on a cradle to cradle approach towards circular product design as well as the end of life of goods. Differences between the initial circular economy package put forward in July 2014 and the new one presented in December 2015 have caused some controversy amongst the EU stakeholder community. In Brussels and further afield, whether these changes resulted in cautious optimism or outright disappointment depended very much on who you asked. On the one hand, waste management targets were revised downwards; derogations have been introduced for five Member States; the overarching target to increase resource productivity by 30% by 2030 has been dropped; and the aspirational target to reduce food waste by at least 30% by 2025 no longer appears in the legislative proposals. On the other hand, the action plan contains many new initiatives on aspects not directly related to waste management but essential for a transition to a circular economy, such as production, consumption, secondary raw materials or innovation. The action plan presents measures in five priority sectors including plastics, food waste, critical raw materials, construction and demolition, and biomass and bio-based products. On marine litter, the aspirational objective set in 2014 to reduce marine litter by 30% by 2030 is maintained, whereas on food waste the Commission indicates that it is committed to the 2030 target set in the Sustainable Development Goals, aiming to “halve per capita global food waste at the retail and consumer levels,” inter alia, by developing a common methodology to measure food waste and clarifying EU legislation on waste, food and feed. Across these areas and priority sectors, several types of measures are proposed. These include legislative measures, for example putting forward a revised Regulation on fertilisers as well as “softer” measures, such as support via communications and reporting initiatives, and with implementation, guidance, indicators, standards and measures to ease access to finance. In addition to these, the Commission intends to consider the need to ensure the non-toxicity of recycled materials and

the contribution of the bioeconomy for the transition to a circular economy. Stakeholder Responses to the Circular Economy Package Although reactions to the new package of measures from the stakeholder community were mixed, notably, from the NGO community they were openly critical. The NGO umbrella group European Environmental Bureau (EEB), which represents the interests of a range of environmental groups, branded the proposal as “smoke and mirrors”. Its policy Manager for Products and Waste, Stéphane Arditi, commented: “The Commission has failed to deliver on its promise to come with a more ambitious proposal. The addition of some nice initiatives does not offset the fact that the legally binding core of the package, notably the waste targets, is weaker than the last proposal. We’ve ended up with a wasted year and a proposal that is less ambitious. Lowering the recycling targets compared to last year’s proposal means that more waste will be sent to landfill or incineration plants. This is a missed opportunity because recycling creates more jobs and causes fewer emissions than either landfill or incineration.”

European Environmental Bureau (EEB), www.eeb.org

Friends of the Earth Europe were even more scathing stating that the Commission’s proposal did not live up to its promise whilst suggesting that the proposal was a casualty of the European Commission’s so-called “Better Regulation” Agenda. Magda Stoczkiewicz, Director at FoE Europe, commented: “This has been a year of unnecessary delay. Under the guise of Better Regulation, the Commission has totally undermined claims of ‘ambition’ by watering down binding measures and giving Member States a free pass to shy away from tackling our overconsumption crisis. Compared with the previous one, this package is not Better Regulation but short-termist Bad Regulation.”

Friends of the Earth Europe, www.foeeurope.org

Zero Waste Europe, also lamented that the proposal failed to address prevention and reuse, and even went so far as to eliminate food waste and marine litter reduction targets. The organization also echoed the complaint that the package was less ambitious on separate bio-waste collection and lowers waste recycling targets.

Zero Waste Europe, www.zerowasteeurope.eu

But EU Industry struck a more conciliatory tone with Markus J. Beyrer, Director General of Business Europe stating: “The renewed approach is a good step to support business in this long-term transition agenda. Acceleration

Business Europe, www.businesseurope.eu

renewablematter 08. 2016 of the circular economy entails stronger commitment and collaborative approach involving governments, businesses and science as well as consumers and increased value chain cooperation.” Eurochambres, www.eurochambres.eu

CEFIC, www.cefic.org

SITRA, www.sitra.fi/en

EuropaBio, www.europabio.org

European Bioplastics, en.european-bioplastics. org/

EU Affairs Director, Ben Butters, of Eurochambres, The Association of European Chambers of Commerce and Industry also welcomed the new package commenting: “There was much discussion prior to the adoption of the new package about the level of ambition following last year’s withdrawal. But fundamentally EU legislation must be workable if it is to accomplish its objectives, so ambition must be coupled with pragmatism. That is why the Circular Economy package must take into account the financial and operating conditions of the businesses that will be obliged to comply with it and also Europe’s generally very cautious economic forecasts. We believe that the Commission’s proposal on the whole strikes a good balance between ambition and pragmatism and we now look to the Parliament to follow suit.” Hubert Mandery, Director General for CEFIC, the European Chemicals Association noted: “Maximising efficiency and minimising waste are good business practice, and it only makes sense to consider how those same principles can be applied to the economy as a whole.” However he expressed disappointment that the Commission appeared not to have taken the opportunity to clarify the definition of waste, and encouraged them to do so in order to ensure that valuable resources are not lost to the economy due to regulatory barriers. Further noting that the Communication identifies a need to facilitate the traceability and risk management of chemicals in the recycling process, Mandery added, “The European chemical industry is committed to ensuring the safe use of chemicals. We look forward to working with the Commission and other stakeholders to make sure that the same high standards apply at every stage of the circular economy.” However, concerns were raised by pioneers in the renewable’s sector about how well the package had recognized both the potential and the need to reward the EU’s innovative better performers. Kari Herlevi, Senior Lead on circular economy for SITRA, the Finnish Innovation Fund commented: “The European Commission’s new program on circular economy includes important policy guidelines and is more comprehensive than the first version, but more incentives are needed. For example, clear indicators, fiscal incentives and funding instruments for investments would speed up the transition towards circular economy. The mutual aim of the Circular economy package is obvious and welcome in order to improve

Europe’s competitiveness through resource efficiency. Additionally, concrete incentives and obligations are quickly needed to steer companies’ innovation, consumer behavior and public procurement.” Furthermore, he cautioned: “It is notable that the circular economy and its relevancy to prevent climate change has drawn too little attention. This is an indication of political silos although it is clear that climate change cannot be prevented without the wise use of natural resources. Bioeconomy (such as bioproducts like advanced renewable biofuels, bio chemicals) and digitalization are an important part of circular economy. It is very important to move to experiments and concrete actions.” EuropaBio, the European Association of Bioindustries, welcomed the Commission’s focus on public procurement schemes, communication and awareness campaigns and incentives for the use of more resource efficient, renewable products and processes. But Secretary General, Nathalie Moll, also emphasised the hurdles facing biobased industries in the creation of a circular economy: “We are trying to emerge into a marketplace where, in 2015, the fossil carbon industry received an estimated $5.3 trillion in subsidies, equivalent to 6.5% of GDP according to the IMF (refered to Post-tax energy subsidies: IMF Working Paper ‘How Large Are Global Energy Subsidies?’). To make the playing field yet more uneven, fossil carbon products rarely if ever need to demonstrate or foot the bill for proving sustainability, unlike renewable, EU-sourced biobased alternatives. An EU Circular Economy strategy only makes sense in the context of a serious reality check of this situation and of the need to put in place longterm support and measures to enable its better performers to flourish.” European Bioplastics (EUBP), the European association representing the bioplastics industry along the entire value chain, welcomed the Circular Economy Proposal of the European Commission. It acknowledged that “biobased materials present advantages due to their renewability, biodegradability and compostability. The focus of the proposal has indeed been broadened compared to its predecessor,” stated Hasso von Pogrell, Managing Director of EUBP. “However, the link between bioeconomy and circular economy needs to be developed further. Concrete tasks have to be identified that drive the development of a truly circular economy – a biobased circular economy. Biobased materials, products, and their value chain need to be given a level playing field with conventional, fossil-based commodities.” In a first reaction to the Commission’s publication, Martin Reynolds, Chairman of EUROPEN, the European Organsation for

Policy

EUROPEN, www.europen-packaging.eu

FEAD, www.fead.be

Packaging and the Environment stated: “EUROPEN members are committed to continuously improving the environmental performance of packaged products in a sustainable manner. Being able to take advantage of the scale of the EU Internal Market has been crucial to unlocking the packaging supply chain’s investment in resource efficient innovations. Therefore, we strongly support the retention of the Internal Market safeguard, which remains vital to achieving a competitive and resource efficient Circular Economy for our industry.” Virginia Janssens, Managing Director of EUROPEN, added: “We welcome the proposal’s intention to improve the transparency of and rule enforcement for existing Extended Producer Responsibility (EPR) schemes, as well as the accountability of different actors in EPR implementation. In line with this shared responsibility, we will now assess the implications of some of the proposed wording in particular related to producers’ financial contributions to these EPR schemes.” Voicing the need for market demand side measures in the circular economy, President David Palmer-Jones of the European Federation of Waste Management and Environmental Services, FEAD, said: “If Europe truly believes in the wider economic, environmental and social advantages of a Circular Economy, it must recognise that market forces and supply side measures alone will not deliver it.” He added “Europe’s economy can only be truly circular if strong markets are available for the secondary raw materials the recycling and reprocessing sectors produce. The current markets are unstable and disincentivise secondary raw material production and uptake by Europe’s industry. While secondary materials are in direct competition with lower-price virgin materials,

we will not deliver a more circular economy in Europe, even when overall demand for raw material is strong, unless the environmental cost of using primary raw materials is better reflected in their price.” For now, in Brussels, stakeholders pore over the details of the texts, drawing up their wish lists of amendments, and the Commission’s parcel is passed onto the European Council and Parliament. Most agree that a quick political agreement is unlikely with the European Parliament likely to seek more demanding waste targets and some Member States already hinting that current targets are too tough. Meanwhile, debate intensifies between those who see the future lying in market “pull” measures, creating demand for secondary raw materials, and those who wish to instead focus on the “push” measures by driving collection measures. The Netherlands is gearing up to make the circular economy a centrepiece of its Presidency of the Council of the European Union during the first half of 2016 and will aim to present its Council conclusions on the package before handing over leadership to the Slovaks in the second half of 2016. Across the board, mixed reactions to the circular economy package were surely to be expected as the transition towards a circular future will involve disruption and change, creating winners and losers. Brussels has long been the battleground for clashes between advocates for either environment or for industry but in our circular future those who succeed must achieve the perfect balance of both.

renewablematter 08. 2016

HOW TO SHAPE

The Next Level of The European Bio-Based Economy?

The reasons for the delay and the prospects of recovery in Europe. by Michael Carus, Achim Raschka, Kerstin Iffland, Lara Dammer, Roland Essel, Stephan Piotrowski (nova-Institute)

nova-Institute, www.nova-institut.de

What Does the Concept of Bio-Based Economy Promise? The idea of creating a Bio-based Economy is exciting for the material sector: It promises to introduce new chemicals, building-blocks and polymers with new functionalities; to develop new process technologies such as industrial biotechnology; to deliver solutions for Green and Sustainable Chemistry and Circular Economy. It is supposed to help mitigate climate change through the substitution of petrochemicals by materials with lower GHG emissions. It could bring new business opportunities, investment and employment to rural areas, foster regional development and support SMEs. And finally, the whole utilization of biomass could be optimized by new biorefinery concepts. The European Commission has stated that: “Biorefineries should adopt a cascading approach to the use of their inputs, favouring highest value add and resource efficient products, such as bio-based products and industrial materials, over bioenergy” and that “the advantages of the products over conventional products range from more sustainable production processes, to improved functionalities (e.g. enzyme-based detergents that work more efficiently at lower temperatures, save energy and replace phosphorus) and characteristics (e.g. biodegradability, lower toxicity)” (European Commission 2012). One of the latest document, the Communiqué of the first Global Bioeconomy Summit 2015 in Berlin, states that: “Bioeconomy is the knowledge-based production and utilization of biological resources, innovative biological

processes and principles to sustainably provide goods and services across all economic sectors. [...] Innovation efforts will need to focus on increasing and maintaining the biobased value. [...] In many countries, small and medium-sized enterprises are key drivers of biobased innovation. [...] Bioeconomy policy should therefore empower small and medium-sized businesses to participate in bioeconomy development.” (GBS 2015) What Have we Reached so Far? Not a lot. The amount of biomass used in the chemical and plastic industry in the EU has been almost stagnating over the last ten years. Only the bioenergy and biofuel sectors has developed well thanks a strong regulatory framework and high incentives from national regulations based on the Renewable Energy Directive (RED) and the Emission Trading System (ETS). This non-level playing field is well known and the impacts on the development in the chemical and plastic industry are strong: higher prices and difficult access to biomass. Today’s most important market pull instrument in the bio-based sector is the RED, which creates artificial demand for bioenergy and biofuels. In terms of investment and market volume, this has been very successful. However, several problems of the current framework have started to become apparent over the last few years (Carus et al. 2015): •• Many Member States are not on track with meeting their renewable energy quotas; •• Sustainability certification of feedstocks is only part of the answer as the pressure

Policy

on ecosystems and the resulting problems of (indirect) land use change and biodiversity loss persist; •• The system of multiple counting for certain feedstocks remains an issue, as well as their classifications as waste, residue or co-product; •• Feedstock bottlenecks have appeared for the bio-based material sector due to the increased and unbalanced demand for biomass; •• The existing RED framework does not take resource efficiency, cascading use and circular economy into account and can even contradict those concepts through incentives for the energetic use of biomass and especially through classification of certain biomass types as being waste, when they can in fact be used for other material purposes. In a nutshell, the high-value bio-based economy is not picking up any speed. This is caused, among other things, by the framework conditions created by the RED, which systematically prevent new developments and investments in higher value added applications, such as bio-based chemicals and materials, by only supporting energy use of biomass (Carus et al. 2015). This view is confirmed by recent research in the FP7 project BIO-TIC (2015): “This means, for example, incentives for bioenergy (...) may hinder the most efficient use of biomass in higher-value material use. Cascading systems should be promoted by a level-playing field. The market, left to its own devices, will ensure the maximum value use of biomass alone. Where subsidies distort the market to the extent that this becomes a problem for other industries, the problem should be tackled at the regional or national level.” From an environmental viewpoint, the successful bioenergy and biofuel expansion has to be more regulated to avoid negative impacts such as direct and indirect land use changes (LUC and iLUC), food insecurity and the deforestation of US forests for pellets to cover the demand of the European bioenergy sector: “Every year, European countries import millions of tons of wood pellets to burn as fuel. [...] The demand for wood pellets in Europe has increased dramatically since the introduction of the European Union’s 2009 Renewable Energy Directive. However, forestry is strictly regulated in Europe, so European countries have turned to the southeastern U.S. to supply their rapidly-growing demand for biofuel. [...] The demand just keeps growing. Some estimates predict that in five years’ time from now, Europe will be importing as much as 70 million tonnes of wood to burn. Is it possible to keep up with this astronomical demand without damaging U.S. forests in the

Figure 1 | Employment and turnover in the EU bio-based economy* EU-28 in 2013 EMPLOYMENT 1% 3%

TURNOVER 2%

20%

13%

24% 30%

Total: 600 billion Euro

Total: 3.2 milion 43%

12%

27%

Biofuels

Paper and paper product

Bioenergy

Chemicals and plastics

Textiles and textile products

Pharmaceuticals

Forest-based industry

process? [...] Not all wood-based biofuel comes from sustainable sources like sawdust and tree trimmings. There’s simply not enough of this remnant wood to go around. Many wood pellet mills in the southeastern U.S. source from mature bottomland hardwood forests. Mississippi, Alabama, Georgia, North Carolina and Virginia are among the states most impacted. Often, multiple pellet mills will harvest from the same patch of forest, creating a hot spot of logging pressure in that area. Bottomland hardwood forests are a unique type of wetland ecosystem that grows around rivers and streams. [...] The degradation and removal of forests, especially highly productive wetlands like these, can also have huge and sometimes unpredictable impacts on the carbon cycle. Europe’s efforts to reduce carbon emissions may simply be disrupting the carbon cycle in new ways” (Yoon 2015). Status Bioenergy and biofuels have developed very well in the RED framework, but in many Member States the incentives are decreasing and new investment activities are low or get delayed. Depending on the achieved share, in some Member States the volume of bioenergy and biofuels is still growing, in others it is constant or even decreasing. In the chemical industry, the overall bio-based share has remained at about 10-12% for many years, showing no relevant increase at all. Figures 1 shows employment and turnover in the different sectors of the bio-based economy. At the first look, it is surprising that despite of the described development there

* Excluding agriculture, forestry, fishery, food, beverages and tobacco products.

Source: EUROSTAT derived data.

Five years from now, Europe will be importing as much as 70 million tonnes of wood to burn. Is it possible to keep up with this astronomical demand without damaging U.S. forests in the process?

renewablematter 08. 2016

is more employment in the bio-based chemical industry than in bioenergy and biofuels together, and wood-based material applications show much more employment and turnover than bioenergy from woody biomass. The reason is shown in figure 2. Figure 2 shows the employment per mln tonnes dry matter (tdm) of feedstock for different sectors of the bio-based economy. The green share shows the employment in agriculture and forestry. As expected, much more employment is linked to 1 mln tdm agricultural biomass than to 1 mln tdm wood. For the further processing to the final application, the blue share in the column, all material applications of biomass are responsible for much more employment than bioenergy or biofuels are. Figures 3 shows the development of the wood-based panel industry and the bioenergy from 2003 to 2013. Employment in bioenergy is growing year by year, mainly due to the incentive framework. By contrast, in the wood-based panel industry the employment is decreasing year by year. The competition to the bioenergy sector on sawmill by-products is not the only reason for this, but it is one of the main ones. Bioenergy incentives have driven up wood prices, and the non-incentivized European wood-based panel industry faces problems to pay the higher prices in competition to the world market of panels. Figure 3 (left) shows the total employment

in both sectors, and interestingly it is on exactly the same level in 2003 and 2013. And even more interestingly (see figure 3 right), to achieve this level of employment with a much higher share of bioenergy (70% in 2013 instead of 25% in 2003), the industry needs 80 mln tdm more wood as raw material, which accounts for an increase of 45%! Outlook Meanwhile, more and more political experts have come to the conclusion that it was a mistake to implement such a strong non-level playing field for the bio-based economy. It is expected that the next renewable energy regime for the period after 2020 will include less incentives for this sector and it is still open whether binding targets for Member States will be in place after 2020 at all. Whatâ&#x20AC;&#x2122;s next? Often it is said that biofuels, especially bioethanol, are forerunners for chemical applications, preparing volume and infrastructure for the bio-based economy. Sounds good â&#x20AC;&#x201C; but we should be careful not to immediately make the next mistake. Bioethanol is mainly used as a forerunner for drop-in chemicals. For the overwhelming majority of new bio-based building blocks ethanol is no forerunner at all. Policy will again have a high impact on the development of the bio-based economy and should guide in a future-orientated direction.

Figure 2 | Comparison of employment per 1 mln tonnes dry matter of feedstock between different sectors of the bio-based economy (average EU-28, 2013)* 50

* Only accounting for employment in the European Union

Employment in thousands

40 35 30

Employment in manufacture

Employment in agriculture and forestry

20 15 10 5 0 Bio-based Bio-based Bioethanol rubber and chemicals plastics and chemical products products

Biodiesel

Biogas

Wood-based panels

Pulp & Paper

Solid biogas (bioenergy)

Source: EUROSTAT derived data.

Policy

Figure 3 | Employment and wood raw material demand of the wood-panel industry and for bioenergy (EU-28, 2013) Number of person employed

Million tonnes dry matter of wood

16 4, 00 0

180,000 160,000 140,000

25 9

300

200,000

250

80,000 60,000 40,000

150 100

80 84 ,0 ,0 00 00

100,000

17 6

200

120,000

20,000

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Comparison of employment in the wood-based panel industry and for bio-energy Wood-based panel industry

Are Drop-In Commodity Chemicals the Next Step Forward or Another Dead end of the Bio-Based Economy? At first look, drop-in commodity chemicals do not look too bad (Mathijs et al. 2015): • They can directly substitute fossil-based chemical building blocks 1:1, so they can easily utilize the existing value and production chains as well as the infrastructure of the petrochemical industry; • Meaning that implementation can be fast, with relatively low investment; • Mature markets with potentially high substitution volume such as ethylene (from ethanol), propylene (from ethanol and biogas) and derived PE, PP, PET and PVC already exist; • In many cases they have lower GHG emissions compared to their petrochemical counterparts. But at a second look, drop-in commodity chemicals do not look so good (Mathijs et al. 2015, Iffland et al. 2015): • The Biomass Utilization Efficiency (BUE) from feedstock to final product (meaning how much of the used biomass actually ends up in the product) is low, ranging between 25 and 50% only (Iffland et al. 2015); • Respective technology of isolation and purification is required. In many cases, cost-effective fractionation and conversion technologies are still in their infancy; • Drop-ins do not provide any new or additional functionalities compared to petrochemicals; • They have to compete directly with

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Comparison of wood raw material demand of wood-based panel industry and for bio-energy Bioenergy

Total

petrochemicals that are produced at a low price; • They give low value added to the biomass; • To reduce the production costs, large-scale production is required (local feedstock supply hardly possible, impacts on availability, price for biomass and other sectors); • But also large-scale production will suffer from higher costs for feedstock and processing compared to petrochemicals and will not be competitive (until the crude oil price will be very high); • Implementation needs a strong commitment from policy and long-term incentives, and a strong commitment from society to receive long-term GreenPremium prices. Would it not be better to make high-value chemicals with new functionalities for emerging markets and with a more efficient biomass utilization conversion? “Limited biomass should be used more efficiently: Do more value-added and create more employment – with less biomass” (Carus et al. 2011). Bio-based drop-in commodity chemicals are biofuels’ brothers and sisters. This is both good and bad at the same time and we should be very aware of this. And we should take a thorough look at alternatives, which may be closer to the original promises of the bio-based economy (see below). Two recent publications support this view on drop-in bio-based chemicals: “Every aspect of the wood must be mined for value, and the value extraction processes need to

Source: EUROSTAT derived data.

Limited biomass should be used more efficiently.

renewablematter 08. 2016

A far better way is to drive biorefinery development towards recognizing the diverse character of the biomass and derive value in a holistic and integrated model.

be designed for maximum synergy. In a fully integrated biorefinery, each stage builds on the previous and feeds the next. Such leading-edge biorefineries are however unlikely to emerge as long as they are driven by the idea of providing drop-in products that merely replace (one-for-one) those traditionally supplied by the petrochemical industry. [...] By narrowly focusing on the drop-in fit, producers have been unable to construct the kind of integrated process that utilizes all the side streams and by-products – thus having to carry higher total costs. [...] Insisting on drop-in adequacy, means too high a cost in preparing and processing the bio-materials, with considerable losses of biomass. A far better way is to drive biorefinery development towards recognizing the diverse character of the biomass and derive value in a holistic and integrated model. We believe this is the way for biorefineries and bio-products to be competitive without requiring subsidies” (NISCluster 2015). Also the German Chemical Association does not believe in drop-in commodities from biomass: “The potential for growing additional biomass in Europe is very low compared to the rest of the world. Therefore, the high transport costs of biomass with low energy density speaks rather against importing large quantities of renewable raw materials to Europe for the production of commodities” (VCI 2015). James Philp made an interesting and surprising proposal for bio-based drop-in chemicals in 2015. He is highly aware of the mentioned weak points of the drop-in commodities. But he also sees potentially high volumes linked to corresponding GHG emission reduction: “For the policy maker, replacing the oil barrel requires bio-based alternatives to the major petrochemicals such as ethylene and other short-chain olefins. However, trying to make a high-volume bio-based equivalent of a petrochemical suffers two large impediments: 1. Over decades the petrochemical equivalent has had its production process and supply chains perfected and the production plants have been amortised, so that it benefits enormously from economies of scale; 2. Bioprocesses are notoriously inefficient when it comes to scaling up to a level that can influence a market. [...] Lower support for lower production volume, greater support for higher volume. This makes sense in the current policy setting as: •• Greater production volume means a greater contribution to national GHG emissions reduction targets; •• It should act as the sought-after R&D

stimulus for companies to make process improvements that make further GHG savings. [...] It specifically addresses high-volume, low value chemicals because these have the greatest impact in replacing the oil barrel and in emissions reduction. These are precisely the chemicals that are unattractive to the young bio-based industry as it is extremely difficult to synthesise them efficiently at scale in competition with the petrochemicals industry” (Philp 2015). Coming from the priority of reducing GHG emissions, this proposal is consequent and logical. Although it sounds paradox to give long-time incentives for inefficient large-scale industrial processes with high volume instead of innovative, efficient and special applications, also suitable for SMEs. Also the potential volume of the new, non-drop-in solutions and drop-in fine chemicals should not be underestimated. Can the absolute volume of GHG reduction be the only criterion when deciding on the future policy framework of the bio-based economy? And would it not then be the real question whether we should promote bio-based chemicals at all since in various studies it was clarified that there are significantly more cost-effective ways of GHG savings available such as thermal insulation in homes. Taking any other parameters seriously such as relative GHG saving per tonnes of biomass, high biomass utilization efficiency (which means less biomass and cultivation area for the same amount of final product), innovation, investment and competiveness, employment, it makes no sense to develop possible incentives exclusively for drop-in commodities – drop-in fine chemicals and new chemicals should be included too. Are Huge Lignocellulosic Biorefineries the Next Step Forward or Another Dead End of the Bio-Based Economy? One of the great hopes of the European bio-based economy are huge lignocellulosic biorefineries. And here again, the big question is whether they are a solution or another dead end. These refinery concepts have several weak points and these points are also the reason why the implementation is so slow. •• Recent lignocellulosic biorefineries will produce high-priced C5 and C6 sugars for fermentation processes; the price is much higher than for sugar from sugar beet or sugar cane. •• The cost disadvantage would need to be balanced by the utilization of lignin, which is so far hardly feasible.

Policy •• Because of this situation, some experts propose to go to a really high scale: Utilization of one or even two million tonnes of biomass per year are necessary to overcome the cost issue through the economy of scale. •• This means that high investments are needed and no local feedstock supply is possible. Locations for such a high-scale biorefinery would be mainly limited to big harbours such as Rotterdam, Antwerp or Hamburg. And it still means high risks for selling the products at competitive prices, especially the lignin. •• Most concepts for these biorefineries focus on drop-in commodity chemicals such as bioethanol, mainly because of the production volume, existing infrastructure and incentives. For this, the structurally very complex cellulose polymer needs to be broken down to be processed into low-value commodities. Pros and cons of drop-ins were discussed in the last chapter. •• To implement those biorefineries, long-term incentives from the public sector are required. One of the main reasons for supporting lignocellulosic biorefineries was to achieve a high biomass utilization efficiency and to avoid unused bio-waste streams. Is this still a real argument? If the lignocellulosic biorefinery mainly produces drop-in commodity chemicals, the biomass utilization efficiency can be low. We should not forget the highly efficient biomass utilization in the sugar and starch as well as in the pulp and paper industries. These existing plants also count as biorefineries optimised for high efficiency and they are running without any incentives. All parts of the biomass are utilized and no bio-waste is left over. Smart, Small and Clever: New Bio-Based Building-Blocks and Innovative Pathways can Utilize the Full Potential of Functionalized Platform Molecules Already today, the production of bio-based chemicals accounts for about €48 billion of turnover in the European Union (2013), as figure 1 (right) clearly demonstrates. And almost all of these chemicals are not drop-in chemicals, but bio-based dedicated speciality chemicals. With new and also known technologies such as biotechnology, chemical modification and extraction, and with new bio-based building-blocks with new functionalities, this amount can be considerably expanded. Emerging strategies imply new building blocks and chemicals, new value chains, new investment in plants and infrastructure. These new building blocks are often produced by new processes, especially by industrial biotechnology using yeast/fungi, bacteria

and enzymes to produce chemicals such as succinic or lactic acid in an efficient way. New emerging strategies based on biomass can take advantage of utilizing higher levels of structure already provided by nature. Industrial biotechnology is becoming an important biomass transformation technology: highly specific transformations can be accomplished under mild reaction conditions with often very high yields. Currently only 5-10% of all processes for biomass transformation in the chemical and material sectors are conducted according to biotechnological approaches, but the tendency is strongly increasing. (Mathijs et al. 2015) Next to industrial biotechnology also the extraction of high value complex biomolecules is an important utilisation pathway, which can often be processed before or parallel to other pathways of utilisation. From several biomass sources, waste streams and residues extractable compounds are available and partly already in use. This is especially true for pine chemicals from wood residues and waste streams from the pulp and paper industry, mainly tall oil derived chemicals used for cleaning agents, solvents, lubricants, paints, adhesives and more. Another example are grape residues (pomace) containing Resveratrol, Polyphenols and Tannins, used in paints, tanning agents and nutraceuticals. There are many more examples and the extractable compounds are always of high value and can be used in several utilisation areas. (Mathijs et al. 2015).

renewablematter 08. 2016 Compared to drop-in commodity chemicals, bio-based dedicated pathways are more efficient, utilising not only the carbon in the biomass, but the whole biomass – carbon, oxygen, hydrogen and nitrogen. This is reflected in a high biomass utilization efficiency (BUE), see figure 4. Most of the new building blocks can be found on the top of the diagram and most of the drop-ins at the lower end (Iffland et al. 2015). But there is also an interesting group of drop-in chemicals, partly fine chemicals, but also some smaller commodities with a high utilization efficiency. For those chemicals the traditional petrochemical pathways are complex and long, whereas new biotechnology pathways could be very short and efficient. BUE calculations reflect a theoretical approach that has real life implications, for example

for the land use efficiency of different bio-based chemicals (Iffland et al. 2015). “Bio-based product pathways with a higher BUE need smaller areas of cultivation for the same output compared to pathways with a lower BUE, which shows the BUE has a direct correlation with the land efficiency and the amount of land necessary to produce a certain product. For example, to produce the same amount of PE and PLA from sugar cane, one needs almost twice the cultivation area for PE than PLA” (Iffland et al. 2015). The typical production capacity for bio-based dedicated chemicals is 20,000 to 40,000 t per year (such as the new BioAmber 30,000 t/y succinic acid plant in Canada), but also smaller plants (< 5,000 t/y) are on the market producing high-value specialities. The demand for biomass of those small and medium sized production plants can be met locally. This means

Figure 4 | Comparison of different highest realistic biomass utilization efficiencies (BUEH) Source: Iffland et al. 2015.

Starch polymers Cellulose derivates Vegetable oil fuel Biodiesel (from vegetable oil) Lactic acid (from glucose) Alkylpolyglucoside (from glucose) PA 11 (with heptanal+glycerol valorization; from rhicinoleic acid) Succinic acid (from glucose) Acetic acid (one-step process; from glucose) BDO (from glucose) Regenerated cellulose MEG (direct synthesis; from glucose) Lubricating and hydraulics oil (from vegetable oil) HVO/NexBTL (from vegetable oil) PLA (from glucose) HMF (from glucose) PBS (from glucose) Acetic acid (production with ethanol intermediate; from glucose) FDCA (from glucose) PEF (from glucose) PA11 (from rhicinoleic acid) PDO (from glucose) Bioehanol (from cellulose) Acrylic Acid (from glucose) MEG (via ethylene; from glucose) PE (from glucose) Ethylene (from glucose) BTL (=octane; from glucose) Biomethane (from cellulose) Isoprene (from glucose) BTL (=synfuel: CH2; from cellulose) PET (from glucose) pX (from glucose) TPA (pX oxidation from glucose) TPA (via acylic acid+isoprene; from glucose) 0%

BUEH – Highest realistic percentage of used biomass ending up in desidere products

10%

20%

30%

40%

50%

60%

70%

80%

Percentage of lost biomass (realistic)

90%

100%

Policy that many locations close to the local biomass origin are suitable for production plants. “It is fundamental that biomass be locally sourced in order for the integrated biorefineries to be truly connected with the nearby environment” (Cayuela 2015). Many SMEs are involved in bio-based dedicated processes, as Philp 2015 mentioned “... the small companies trying to make a bio-based chemical commercially often opt for high-value chemicals with low production volume.” The hottest biomass dedicated and promising building-blocks, polymers and materials are listed below (based on Mathijs et al. 2015 and several other sources). New bio-based chemicals among others: •• Glycerol and derivates, Hydropropionic acid and aldehyde, Itaconic acid, Farnesene, Furans (HMF, Furfural, FDCA), Lactid acid, Levulinic acid, Sorbitol, Succinic acid, Xylitol; •• PEF, PHA, PLA; PA (10,10, 10,12 and 12,12), •• Bio-based lubricants and surfactants (with already a yearly growth between 5 and 10%; eg. Sophoro- and Rhamnolipids, Alkylpolyglycosides); •• Cellulose fibres (with already a yearly growth between 5 and 10%), Nanoand microcellulose. Drop-in chemicals with new biotechnology pathways and high biomass utilization efficiency, for example: •• Acetic acid, Acrylic acid, Adipic acid, Butanediol, Butadiene, Isoprene; •• PA (6,6), PDO, PBS. These bio-based chemicals and polymers fulfil the promises of the Bio-based Economy: increasing and maintaining the bio-based value, new functionalities (depending on the chemical/polymer: less unwanted by-products, less toxic for the environment, biodegradable), new and improved processes (biotechnology, extraction, new catalytic processes; better space/time yield, less reaction steps and/or energy required because reactions can be executed at temperatures around ca. 37 degrees without the need for a e.g. rare metal catalyst, no need to use toxic solvents), delivering solutions for Green and Sustainable Chemistry and Circular Economy; and also contributing to mitigating climate change by substitution of petrochemicals with higher GHG emissions. Bringing new business opportunities, investment and employment to rural areas, regional development and SMEs. And finally, optimizing the whole utilization of biomass through new and integrated biorefinery concepts. From our point of view, a successful Bio-based Economy, which is accepted by the public and NGOs, should focus on the bio-based dedicated chemicals and materials described above, providing the consumer and the environment

with proven advantages – including the reduction of GHG emissions. The Sustainable Feedstock Question: Food or Non-Food Biomass for Bio-Based Products? A recent strategy to sustain food security is the use of biomass waste streams and residues, which are not utilized so far, for the production of bio-based products. The problem is that most of the biomass waste streams are already utilized (an often overlooked fact) and the really not-utilized waste streams are more limited in volumes and properties than normally expected. As producers rely on a steady supply of raw materials with sufficient quantity and quality characteristics to reasonable prices, the production of bio-based products is strongly connected to wood or agricultural biomass. But if it comes to agricultural crops, it is more a question of available land for their cultivation, than of being a food or non-food crop to use them. The use of non-food biomass is not related to improved food security – Carus et al. 2013 already made a comprehensive analysis of this topic. Imagine a huge biorefinery with a demand of biomass coming from approx. 50,000 ha. What is better for food security? To grow non-food crops, which often even need more land than food crops for the same amount of suitable molecules, or to grow additional food crops, which can be utilized for food if necessary in a food crisis? The best feedstock solution seems to be to use local biomass in small and medium sized plants, to utilize biomass waste streams, additionally grown food crops (especially for highly efficient dedicated processes), second generation lignocellulosic biomass and also third generation algae for specific high-value applications. The best choice depends on the region and the targeted processes and products (Bruins and Sanders 2012). “Today, first generation feedstocks such as industrial cane sugar, sugar beet, corn and cassava are used for producing lactic acid. They are grown following principles of sustainable agriculture and have a high yield per hectare of land used. These highly efficient feedstocks are – and will most likely remain – a good choice for lactic acid and PLA production. Corbion Purac is the first company in the world to have made PLA from second generation feedstocks, optimizing the lactic acid fermentation process to fit the special characteristics of the biomass. In the future, these alternative feedstocks can have a high impact on

renewablematter 08. 2016 Figure 5 | Comprehensive concept of circular economy Source: nova 2016.

CO2

Biomass

Metals

Minerals

From mining, farming, carbon capture and utilizatiom (CCU) Fossil C

from recycling

RAW MATERIALS

PRODUCT MANUFACTURING

Share/ mantain

COLLECTION

ste

Reuse/ distribute

Remanufacture

Biodegradables

An illustration that for the first time integrates the bio-based sector fully into the Circular Economy.

rar

Recycling

PRODUCT END OF LIFE

ENERGY RECOVERY

hie din g

PRODUCT USE

sca

TRADE DISTRIBUTION

Organic recycling

chy

CO2 recycling Landfill

CO2

the biochemical and bioplastics industries.” (Corbion 2015) Next to the described feedstocks, also the direct use of CO2 with bacteria, algae or chemical processes is becoming a real alternative – for some chemicals and polymers as well as especially for fuels. It will be important to analyse from an environmental and economic point of view, for which pathways CO2 is a better feedstock and for which pathways biomass will be the first choice also in the long-time future. Future Outlook on Circular Economy When Europe develops its Circular Economy, it needs to keep the bio-based economy in mind that has some specific challenges, but is also more integrated in our everyday, linear-economy

life than many researchers and policy-makers think. As mentioned above, the cascading use of biomass is clearly a strong link between Bio-based and Circular Economy which is not supported by the existing political framework. Currently, incentives are only given for bioenergy and biofuels, hindering a more resource efficient use of biomass in cascades. When the European Commission officially launched their Circular Economy package in December 2015, the utilization of biomass and cascading use was acknowledged in two sections: “In a circular economy, a cascading use of renewable resources, with several reuse and recycling cycles, should be encouraged where appropriate. Biobased materials, such as for example wood, can be used in multiple ways, and reuse and recycling

Policy can take place several times. This goes together with the application of the waste hierarchy and, more generally, options that result in the best overall environmental outcome. National measures such as extended producer responsibility schemes for furniture or wood packaging, or separate collection of wood can have a positive impact. [...] The bio-based sector has also shown its potential for innovation in new materials, chemicals and processes, which can be an integral part of the circular economy. Realising this potential depends in particular on investment in integrated bio-refineries, capable of processing biomass and bio-waste for different end-uses. The EU is supporting such investments and other innovative bio economy-based projects through research funding” (European Commission 2015). “The Commission will promote efficient use of bio-based resources through a series of measures including guidance and dissemination of best practices on the cascading use of biomass and support for innovation in the bioeconomy. The revised legislative proposals on waste contains a target for recycling wood packaging

Bibliography •• ACHEMA (2015), Summary of the event EU-Bioeconomy and HORIZON 2020 revisted: How far have we come since ACHEMA 2012?, Frankfurt, 2015-06-18 •• BiofuelDigest (2016), The 30 Hottest Molecules survey, January 2016 (www.biofuelsdigest.com) •• BIO-TIC (2015), A roadmap to thriving industrial biotechnology sector in Europe. FP7 project (www.industrialbiotecheurope.eu) •• Bruins, M. E., & Sanders, J. P. (2012), “Small-scale processing of biomass for biorefinery. Biofuels”, Bioproducts and Biorefining, 6(2), 135-145 •• Carus, M., Carrez, D., Kaeb, H., Ravenstijn, J., Venus, J. (2011), Level Playing Field for Bio-based Chemistry and Materials. nova paper #1 on bio-based economy, Hürth 2011-07. Download at www.biobased.eu/nova-papers •• Carus, M. and Dammer, L. (2013), Food or non-food:

Which agricultural feedstocks are best for industrial uses? nova paper #2 on bio-based economy, Hürth 2013-07. Download at www.bio-based.eu/ nova-papers •• Carus, M., Eder, A., Beckmann, J. (2014), GreenPremium prices along the value chain of bio-based products. Hürth 2014. nova paper #3 on bio-based economy, Hürth 2014-05. Download at www.biobased.eu/nova-papers •• Carus, M., Dammer, L., Essel, R. (2015), Options for Designing the Political Framework of the European Bio-based Economy. nova paper #6 on bio-based economy, Hürth 2015-06. Download at www.biobased.eu/nova-papers •• Cayuela, R. (2015), “The New Chemistry Is Worth $80 Trillion, interview with Rafael Cayuela”, In Renewables Matter – International magazine of the bioeconomy and the circular economy, 4, June 2015

and a provision to ensure the separate collection of biowaste” (European Commission 2015). It would go beyond the scope of this article to make a detailed analysis of every aspect that needs to be addressed if Europe aims for a sound integration of the bio-based economy into the Circular Economy. However, the following graph (figure 5) is our contribution to the debate by offering an illustration that for the first time integrates the bio-based sector fully into the Circular Economy. Some of the currently popular graphs that describe the future CircularEconomy differentiate for example between cycles of biological materials and technical materials (Ellen MacArthur 2013), which is not an accurate depiction of actual resource flows. For that reason, our illustration includes all kinds of material streams and shows all different utilization routes belonging to a Circular Economy. Organic recycling (= biodegradation) and even the capture and utilization of CO2 from industrial processes or the atmosphere are included to provide a truly Comprehensive Concept of Circular Economy.

•• Corbion (2015), Corbion Purac successfully develops PLA resin from second generation feedstocks, press release 2015-10-13 •• Ellen MacArthur Foundation (2013), Towards the Circular Economy. Opportunities for the consumer goods sector. Isle of Wight 2013 •• European Commission (2012), Innovating for Sustainable Growth – A Bioeconomy for Europe, European Commission, DG for Research and Innovation, Brussels 2012 •• European Commission (2015), Closing the loop – An EU action plan for the circular economy, European Commission, Brussels, December 2015 •• GBS (2015), Communiqué Global Bioeconomy Summit 2015 – Making Bioeconomy Work for Sustainable Development. Berlin, November 2015 •• Iffland, K., Sherwood, J., Carus M., Raschka, A., Farmer, T., Clark, J. (2015), Definition, Calculation and

Comparison of the “Biomass Utilization Efficiency (BUE)” of Various Bio-based Chemicals, Polymers and Fuels. nova paper #8 on bio-based economy, Hürth 2015-11. Download at www.bio-based.eu/novapapers •• Mathijs, E. (2015), Sustainable Agriculture, Forestry and Fisheries in the Bioeconomy – A Challenge for Europe. 4th SCAR Foresight Exercise, Brussels, October 2015 •• NISCluster (2015), The bioeconomy must move away from drop-in thinking! Newsletter of the NISCluster, Finland, November 2015 •• Philp, J. (2015), Balancing the bioeconomy: supporting biofuels and bio-based materials in public policy. The Royal Society of Chemistry. August 2015 •• Pietikäinen, S. (2015), “Championing the Circular Cause, interview with Sirpa Pietikäinen” edited

by Joanna Dupont-Inglis, In Renewables Matter – International magazine of the bioeconomy and the circular economy, 4, June 2015 •• VCI (2015), Basischemie 2030 – Aktualisierte Analyse zur Zukunft der Basischemie, VCI, Frankfurt, October 2015 •• Yoon, A. (2015), Increasing Demand for Wood-Based Biofuel Threatens U.S. Forests, TriplePundit (www.triplepundit. com/2015/11/increasingdemand-wood-basedbiofuel-threatens-u-sforests/)

renewablematter 08. 2016

€1.27 TRILLION:

That’s How Much the Bioeconomy is Worth in the EU5 In Europe’s leading countries, the bioeconomy employs over 7 million people. While, globally, exports amount to $2.396 trillion, 12.6% of the world trade. That’s the snapshot of the situation by Intesa San Paolo’s study. edited by the editorial staff

Secondo Rapporto Intesa Sanpaolo Assobiotec, La Bioeconomia in Europa, December 2015, tinyurl.com/z2l9vaq

A production value of over €1.27 trillion and 7 million workers. These are the bioeconomy figures in Europe’s five major economies (Germany, France, Italy, United Kingdom and Spain) according to La Bioeconomia in Europa (“The Bioeconomy in Europe”) study conducted by Centro Studi di Intesa Sanpaolo, Italy’s largest group and one of Europe’s leading banking groups, in collaboration with the Italian Association for the development of biotechnologies (Assobiotec). The analysis, at its second edition, was presented last December in Turin and represents an accurate snapshot of the bioeconomy’s value in each analysed country. A chemical sector’s snapshot that is partly real and partly only potential: indeed, not all chemical compounds that could currently be obtained from biological resources are actually produced in this way. As the two authors of the report Serena Fumagalli and Stefania Trenti explain, “as for agriculture, forestry, fishing, food, wood and paper industries, official statistics already show the main data on the production and employment values

and on foreign trade. The chemical sector’s contribution assessment was more complicated to ascertain. So, the analysis was carried out with the crucial support of a biotechnology expert who was asked to identify chemical-based products that can potentially be obtained using renewable resources based on currently available technologies. This enabled us, on the basis of the highest level of disaggregation available, to isolate not so much what is currently produced with renewable raw materials but rather the producible potential in an economically-sustainable way with current technologies.” The analysis highlighted Germany as the European leader in the bioeconomy sector, with a production value of over €343 billion and 1.847 million workers, followed by France with 295 billion and 1.51 million workers, Italy 244 billion and 1.54 million workers, Spain with 219 billion and 1.24 million workers and the United Kingdom with about €171 billion and 888 thousand workers. Our analysis – the two authors add – shows the importance of the bioeconomy in Spain,

Policy where it has reached 11.9% of the value of national production. Such significant impact stems from the agricultural and food sectors, but the production of the biochemical sector is also higher compared to the EU5’s average. In France and Italy, the role of the bioeconomy is significant, with an impact on total production of 7.9% in both countries, mainly due to the agribusiness sector. Moreover, Spain and France are the only countries to highlight a positive balance sheet for foreign trade with regard to bioeconomy products, thanks mainly to the agribusiness trend: 10.6 billion in France, 9.1 billion in Spain. Positive results

also for Germany, with 853 million, spurred by the manufacturing sectors, while Italy and the United Kingdom’s figures are negative, with 13.2 and 35.4 billion respectively. “It is worth mentioning – the two authors highlight – how the impact of biochemistry on total chemical production of those countries varies between a minimum of 29.8% of the United Kingdom to a maximum of about 40% for France and Italy. We would like to reiterate that this is not an estimate of existing productions (still limited and in many instances still in their experimental phase), but rather what

The bioeconomy: production value (millions of euro, 2013) Source: Intesa San Paolo estimates on Eurostat data.

Agriculture, forestry and fishing of which:

Agriculture

Forestry

Fishing

Food

Wood

Paper

Biochemistry

Total bioeconomy

Total Economy

Bioeconomy impact on total

ITALY

GERMANY

FRANCE

UNITED KINGDOM

SPAIN

EU5

59,646

53,463

85,854

33,197

49,710

281,870

56,363

48,187

78,573

29,837

N. D.

1,566

4,903

5,006

1,392

N. D.

1,717

373

2,275

1,969

N. D.

128,502

182,004

156,692

102,879

132,666

702,743

14,324

23,704

10,277

7,928

6,387

62,620

21,097

37,726

16,251

13,997

12,217

101,288

20,456

46,613

26,745

12,971

18,344

125,129

244,024

343,510

295,819

170,973

219,324

1,273,650

3,085,769

5,206,683

3,768,136

3,618,844

1,946,070

17,625,501

7.9%

6.6%

7.9%

4.7%

11.3%

7.2%

renewablematter 08. 2016 of the total, followed by biochemicals representing 14.5% of exports. The main exporters include the United States, ranking first with a 10.9% share, Germany (7.5%) and Holland (6.6%), with an improvement compared to 2010. China is in fourth position, with a share of about 6%, overtaking France that dropped to 5% (it was at 5.5% in 2010) followed by Brazil, Canada, Belgium and Spain. Italy is the 10th world exporter with a share of about 3%, registering a slight decrease compared to 2010. Some emerging Far East economies such as Thailand and Indonesia are following behind, with a share of 2.3 and 2.2% respectively.

it could potentially be produced with existing technologies and in an economically sustainable way.” In addition, the Intesa Sanpaolo study takes into consideration international statistics on foreign trade of bioeconomy products, as classified by the bank’s research centre. In 2014, world exports amounted to $2,396 billion, i.e. over 12.6% of global trade, a rapidly expanding share compared to 9.8% of 2007. Food products, with about 1,115 billion, represent about 46.6% of total exports. Overall, the agribusiness sector constitutes two thirds

Employment in the bioeconomy (thousands of employees) – 2013; The bioeconomy’s impact on national production Source: Intesa San Paolo estimates on Eurostat data.

Agriculture, forestry and fishing of which:

Agriculture

Forestry

Fishing

Food

Wood

Paper

Biochemistry

Total bioeconomy

Total Economy

ITALY Employment

Impact

GERMANY Employment

Impact

FRANCE Employment

Impact

UNITED KINGDOM Employment

Impact

SPAIN

Employment

Impact

Employment

Impact

892

1.9

641

1.0

757

2.3

356

0.9

736

827

1.8

597

0.9

709

2.1

325

0.8

N. D.

0.1

0.0

N. D.

0.1

0.0

0.1

N. D.

449

4.2

922

3.5

625

4.2

401

2.8

407

6.8

2,804

4.0

129

0.5

137

0.5

0.3

0.2

0.3

469

0.4

0.7

147

0.7

0.4

0.6

377

0.6

0.7

0.9

0.7

0.4

0.9

151

0.7

1,544

7.9

1,847

6.6

1,510

7.9

888

4.7

1,244

11.3

7,033

7.2

17,948

100.0

24,323

100.0

42,328

100.0

27,197

100.0

30,044

100.0

2.6

EU5

3,382

141,840

1.6

100.0

Policy Besides China, the market is performing better both in India and Poland. In short, between 2010 and 2014, the overall picture for the main world exporters in the bioeconomy sector has not changed much, apart from China that leapt forward.

by a growth in the emerging economies including China, Mexico, South Korea, Hong Kong and India. The study specifically considers the world market of bio-based chemical products. In this sector, the US and Germany seem to be the leading players, with high percentages of world exports (13.3 and 11.2 respectively). Both countries show a positive trade balance, while China is in deficit, showing $55.4 billion of imports and thus ranking first with a negative trade balance of $42 billion. Belgium, Holland and France are amongst

As for imports, in 2014, China was the world’s leading country – with almost 10% of overall imports – dramatically soaring compared to 2008. The industrialized countries follow behind with declining percentages, except Holland and the US. The fall in the majority of developed countries is counterbalanced

Bioeconomy exports and imports (millions of Euro, 2013) Source: Intesa San Paolo estimates on Eurostat data.

Agriculture, forestry and fishing of which:

Agriculture

Forestry

Fishing

Food

Wood

Paper

Biochemistry

Total bioeconomy

Total Economy

Bioeconomy impact on total

ITALY

GERMANY

FRANCE

UNITED KINGDOM

SPAIN

EU5

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

5,985

12,780

10,548

29,525

16,385

12,140

3,102

13,088

13,945

9,838

49,965

77,371

5,669

11,462

9,947

28,177

15,487

10,504

2,092

12,377

13,195

8,621

46,391

71,141

105

345

334

776

381

226

211

973

267

571

517

1,410

27,423

28,207

57,046

48,152

43,307

36,800

1,513

2,895

6,039

5,477

1,860

3,437

6,234

6,342

18,723

14,752

6,181

9,616

13,763

37,980

32,924

50,772

63,986

130,336

390,233

361,002

1,093,160

13.0%

17.7%

11.9%

125

210

157

1,108

1,630

930

586

540

1,060

2,466

4,600

37,547

24,043

380

3,871

1,180

9,078

2,904

7,932

20,088

17,391

11,885

129,483

87,821

77,210

894,005

437,439

513,114

14.5%

20.1%

15.0%

20,769

172,589

170,168

978

10,972

16,658

4,294

4,055

38,336

42,159

12,729

8,319

9,555

87,889

86,362

39,040

74,456

51,782

42,671

359,751

386,488

407,060

496,977

239,314

256,455

9.6%

15.0%

21.3%

19,461

16.6%

17,625,501

14.0%

2,521,553

15.3%

renewablematter 08. 2016 Impact of biochemistry on chemical sector total â&#x20AC;&#x201C; 2013 UNITED KINGDOM

GERMANY

SPAIN

ITALY

FRANCE

29.8%

34.3%

36.6%

39.9%

Source: Intesa Sanpaolo estimates on Eurostat data.

Exports of bioeconomy products (billion of dollars and impact) % on the total 14.0

Source: Intesa Sanpaolo elaboration on UNCTAD and WTO data.

Billion of $ 3,000

13.0

2,500

12.0

2,000

11.0 10.0

1,500

9.0

1,000

8.0

500

7.0 6.0

2007

2008

2009

2010

2011

2012

2013

2014

World exports in the bioeconomy (millions of euro, 2014) BILLION US$ Agriculture, forestry and fishing of which:

COMPOSITION %

556.8

23.2

the best performing exporters, while Italy is the twelfth position with a market share of 2.7% and a deficit of $3.5 billion in 2014. Bio-Based Chemistry Today

Agriculture

Forestry

Fishing

Food

Wood

Paper

Biochemistry

Total bioeconomy

523.0

21.8

32.9

1.4

0.9

0.0

1,115.4

46.6

139.9

5.8

235.5

9.8

347.8

14.5

2,395.4

100%

To what extent bio-based chemistry is potential or real is still to be ascertained. The OECD estimates that by 2030, 35% of chemical products and materials will come from biological sources. So, we are half way there. Most chemical compounds developed today thanks to the use of biomass are acids. Within them, succinic acid is used in many projects carried out by Reverdia (joint venture between Royal Dsm and Roquette), with a plant in Cassano Spinola, Italy, Succinity GmbH (a joint venture between BASF and Corbion Purac) with a production plant in MontmelĂ˛ in Spain and BioAmber with a factory in Sarnia, Canada. Succinic acid has always been derived from oil or natural gas and is used for pharmaceuticals, food and for the production of high-performing polymers, such as alkyd resins and polyesters for paints. Reverdia, whose succinic acid Biosuccinium has been certified in the United States as 99% bio-based, is committed to obtaining 1,4-Butanediol (BD), polyurethane resins and biopolymers such as polybutylene succinate (PBS), used for paints and coating, plastics for car interior design and textiles. As for bio-based 1,4-Butanediol (BD),

Policy an essential component of biodegradable products for coating, adhesive and elastomers (tyres), BASF is also using it in partnership with the American Genomatica and Novamont. The German chemical industry currently produces 1,4- Butanediol in Ludwigshafen (Germany), Geismar, (Louisiana, USA), Chiba (Japan), Kuantan (Malaysia) and Caojing (China), with an overall yearly production capacity of 650,000 tonnes. The bio-Butanediol is used by BASF to obtain bio-based polytetrahydrofuran (Poli-THF® 1000) used in the textile industry to develop elastic synthetic fibres used in sports garments, underwear and nautical clothing. It is also used as a chemical base to produce thermoplastic polyurethane (TPU), used in ski boots, in shoe soles and in the car industry. Novamont, through its subsidiary Mater Biotech, is now converting a dismantled chemical factory in the North-East of Italy into a plant for the production of butanediol. The Novara-based company, through Matrìca (a joint venture with Eni-Versilia) in Sardinia produces bio-based azelaic acid and pelargonic acid. The former is a basic component of renewable and/or compostable plastics, as well as an intermediate for the production of plasticizers for PVC of to synthesize complex esters used as lubricants. The latter – pelargonic acid – is used as an intermediate to synthesize biolubricants and emollients in the cosmetic sector, but it is also an important raw material

for the production of bleaches and food fragrances. Moreover, it is a natural herbicide, so it is used for the formulation of plant protection products. According to the US Department of Energy (DOE), levulinic acid is one of the main biochemicals of the future. The Italian-based GF Biochemicals developed biomass-based levulinic acid. In 2015, in its own plant in Caserta, it produced 2,500 tonnes and aims at reaching a production capacity of 50,000 tonnes by 2019. If currently the cost of oil-based levulinic acid is about $4-5 per kilo, the objective of the Italian company is to be able to offer bio-based levulinic acid at $1 per kilo. It has a number of applications: as chemical intermediate it is used in the sectors of detergents, personal care, pharmaceuticals, plastics, coating, flavourings and fragrances, food, where it acts as a PH regulator for ingredients and inhibits microbial proliferation. Many polymers have been developed by biological sources including 100% bio-based polyethylene furanoate (PEF) by Dutch Avantium, thanks to its own YXY technology, which should hit the market by 2020. PEF has great opportunities in today’s market, mainly in food packaging, lending itself very well for tubs, trays and containers for meat, fruit, cheese and yogurt. Avantium, has already signed agreements with giants such as Coca Cola and Danone.

Main world bioeconomy exporters and importers (% share in current dollars) EXPORTERS

IMPORTERS

United States Germany

China United States

Holland China

Germany United Kingdom

France

Brazil

Japan

Canada

Holland

Belgium

Italy

Spain

Belgium

Italy

Canada

Thailand

Russia

2014

Indonesia

Spain

2010

United Kingdom India Poland

Mexico

Source: Intesa Sanpaolo elaborations on UNCTAD data.

South Korea Hong Kong India

renewablematter 08. 2016 Interview

Rethinking Business Models edited by Mario Bonaccorso

Ellen MacArthur Foundation, www.ellenmacarthur foundation.org/

Massimiano Tellini, Manager of the Intesa San Paolo’s Circular Economy Project

“Today, the Circular Economy – basically a new development paradigm which does not exploit exhaustible natural resources – is definitely a new, ambitious frontier. Since its growth strategies for the future are focussed on sustainability, companies need to rethink their business models. Therefore, our group, which is committed to supporting companies and the real economy, feels the responsibility to play a key role in financing the huge investments required by the transition towards this new paradigm. We stand ready to do our part.” This is what Massimiano Tellini – manager of the Circular Economy Project of Intesa San Paolo, the leading banking group in Italy and one of the main groups in Europe – stated in this exclusive interview with Renewable Matter. Last December, this bank, headquartered between Milan and Turin, announced the beginning of its global partnership with the Ellen MacArthur Foundation. A collaboration between Intesa San Paolo and the Foundation will redefine business strategies to find new opportunities and guarantee investments aimed at redesigning the industrial system. Why is a bank such as Intesa San Paolo interested in the circular economy? “The Intesa San Paolo group has always been committed to its social and environmental responsibilities. As our CEO Carlo Messina remarked recently, from 2007 to 2014, we promoted investments in the environment and renewable resources by allocating over €11 billion. In addition, in 2014, Intesa San Paolo allocated more than 2.3% of its total allocations for supporting renewable energies, agriculture, and environmental protection, which proves our commitment to an increasingly sustainable economy. “A little over a year ago, the group created the position of Chief Innovation Officer, who reports directly to the CEO and is in charge of informing the group of the most important innovation trends in our business as well as in our clients’. Thanks to our CIO – Maurizio Montagnese’s – leadership, the group decided to examine the circular economy’s business implications and was able to establish a privileged partnership with one of the world’s most powerful players in this field: the foundation created and chaired by the legendary sailor Ellen MacArthur. Today, the reason why a bank such as Intesa San Paolo is committed to the circular economy is because, in our opinion, it represents a unique opportunity of business strategic innovation. Consequently, we are responsible

for monitoring and supporting its diffusion in our business’ most important fields.” What does it mean, in practical terms, to be a Global Partner of the Ellen MacArthur Foundation? “As Financial Services Global Partner, we play an exclusive role at world level, consistent with our ambitions and we can show the weight of the responsibility we think is advisable for us to undertake. In other words, as systemic actors, our business conduct – both internal and external – allows us to back the efforts that our main stakeholder will think appropriate to bring in to smooth the transition towards circular models of value creation. “In practical terms, the group is carrying out an internal analysis of its procurement policy, aimed at identifying the areas which could evolve further by improving efficiency in resource use. However, as proved in Davos in 2014, we already know we are among the leaders in this field at international level and the only Italian company among the world’s top 100. “At external level, in our mission to support the development of innovation ecosystems for the circular economy, we are working on solutions to help start-ups willing to work in this field. In addition, we are considering cooperating with public authorities to find common goals and outline possible plans of action for easing the implementation of innovative and common solutions. These are only two examples, but they show the vast range of opportunities that all the operators supporting long-term shared and sustainable development are given by the circular economy’s new systemic vision.” The Ellen MacArthur Foundation and McKinsey state that, in the EU, the circular economy could generate a net profit of €1.8 trillion by 2030, cause the households’ average income to increase by €3,000 and the GDP to grow by 11% instead of the currently forecast 4%. How will all this be possible? “These huge numbers help to understand the significance of the opportunities and responsibilities that the business and finance world will face in the unique historic moment ahead of us. If we consider the numbers, the above mentioned €1.8 trillion refer to the savings in operating costs that European manufacturing companies can achieve by 2030 with a circular approach. This outcome relies on three definite drivers: a) the sole use

Policy of renewable energies; b) redesigning of processes and products as modular and demountable in order to ease their renewal; c) the ambition to phase in zero waste. It has to be remarked that these estimates are conservative and they relate, namely, to companies working in the food, building and automotive industries only. These three businesses have been singled out because, today, they collect about 60% of the average expenditure per European citizen. In the long run, on such a horizon, we can identify the processes offering the European families savings as well, which is another important aspect for all European citizens. Therefore, we are all called to participate in the building of a new development model rewarding the most innovative entrepreneurs and families interested in changing their patterns as both service users and consumers.” During this current crisis, European banks have been accused of not funding the companies system adequately. Today, you describe yourselves as the bank of circular economy. How are you going to finance companies? “During the crisis, Intesa San Paolo never stopped supporting the real economy. We kept granting families and companies medium and long term loans, which totalled 27 billion in 2014 and reached 40 billion in 2015. “I think it is rewarding to examine, though very concisely, an aspect which helps to understand the significant innovation introduced by the circular economy. The crisis which has affected all industrialised economies since 2008 is, essentially, the crisis of a paradigm. Indeed, it deeply questioned the processes at the basis of the current economic model, thus contributing to arouse increasing doubts about the raw material purchase processes on the world market. Price fluctuations and geopolitical tensions in world areas of key importance for the procurement of whole industries started to affect badly the budgets of major companies. Besides, if we consider the associated environmental damage caused by an industrial development centred on the consumerist logic, we understand how difficult the working situation has been for economic operators over these years. “The economic recovery, which is starting to produce its first positive effects, represents an unparalleled opportunity as well. I believe that this is where the solution offered by the circular economy comes into play. It allows companies to remove the increasing procurement-related risks and keep their core business ‘safe’ by redefining their strategic goals and the business models linked to them. In my opinion, the connection with the bioeconomy is key.” Practically speaking, what is the role of your bank? What kind of support will you be able

to provide the most innovative bioeconomy companies? “Let’s consider the chemical industry as an example. Over these years, it has been able to look beyond the crisis by building up companies committed to the bioeconomy. Such businesses are nature-friendly, fond of their local areas, committed to establishing an innovative and sustainable business model of supply chain. In early November, as your magazine reported brilliantly, the European Commission hosted the Bioeconomy Investment Summit aimed at funding this industry. On that occasion, the European Commissioner for Agriculture, Phil Hogan, encouraged all the bioeconomy operators to consider it as ‘the green engine of the circular economy.’ “I reckon that this encouragement alone is sufficient to understand that financial institutions will be required to take a strong commitment and, as a group, we stand ready to do our part. Speaking of which, I would like to mention our constant support for companies betting on innovation as, for instance, the Novamont group. Recently, we are cooperating with them to work out common activities for sustaining the bioeconomy in Italy and abroad.” The European Union has started to take its first steps in the circular economy. What is your opinion on this? “Over the last few months, the European Commission showed real leadership in the bioeconomy issue, which reached its climax with last November’s summit. In addition, it is proving its determination to offer Europe the same leadership role in the circular economy. Personally, I am willing to include the recent result achieved at COP21 in Paris. It is not by chance that, before COP21, the President of the European Investment Bank, Werner Hoyer, had insisted that the circular economy had to feature among EU’s distinctive policy proposals in the negotiations. “Over the same period, when the Circular Economy Package was released, Frans Timmermans – European Commission first Vice-President – stated that the circular economy model represents ‘the only thing that makes economic sense in the long-term’ for the European Union. In conclusion, even though it is too early to predict whether Europe will be able to take advantage of the opportunities offered by the circular economy, I think it is undeniable that, today, each one of us is responsible for creating a new successful story within a common international effort.”

renewablematter 08. 2016

Support to Businesses to Relaunch Circular Economy Renewable Matter magazine has created a new challenging initiative aimed directly at companies. The Centro Materia Rinnovabile is a structure conceived to provide guidance and tangible solutions to companies wishing to improve energy recovery from waste flows produced in their operations. Such support occurs by integrating various competences that currently act separately; by creating a dialogue between regulatory constraints and economic opportunities, technological innovations and environmental sustainability solutions, knowledge of materials and energy conversion, experience and innovation. The Centro Materia Rinnovabile, CMR, was created to meet such challenge, bringing together the most authoritative teams of experts at national level in order to turn some types of waste into new matter flows, with measurable advantages even in the short term.

This is the course of action suggested by CMR to obtain a successful waste-to-energy conversion of waste flows: • analysis of compliance with regulations in relation to the chosen flow • statistics on the best possible uses of material according to current applications (systematic exploration of the most effective technologies available, of their cost, and of current innovations) • evaluation, in economic and authorization terms, of the most cost effective course of action (in-house, third party and starting experimental activities) • second compliance assessment and conclusion of the project and analysis of required procedures • assessment of technical and economic optimization for sorting the various fractions (matter recovery, waste-to-energy shares and waste disposal shares) • finding people able to “come full circle”, i.e. final users, perhaps buyers, in full respect of absolute eco-efficiency of the production chain.

CMR is a limited liability consortium created in December 2015 by the following six structures: Edizioni Ambiente, publishing house that has acted as a link between editorial and research projects on sustainability for the past twenty years and is currently publishing Materia Rinnovabile/Renewable Matter. Eda Pro, is a service provider linked to Edizioni Ambiente, specialized in environmental regulations. Exalto Energy & Innovation, a company operating in strategic consultancy to businesses and institutions for energy efficiency, system planning and building, zero emission buildings and raw material management. Interseroh Service Italia, consulting firm, offering support to other businesses.

It is specialized in the management of packaging materials, prevention, eco-design, optimization of performance and solutions to valorisation and recycling. Remedia Tecnologie e Servizi per il riciclo, is a company supporting boards and businesses dealing with technological waste management and the equipment used for logistics and research into solutions for material valorisation. Silverback, communication agency producing multimedia tools for the environment, specialized in green and circular economies.

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renewablematter 08. 2016

COMPOST

Makes its Entrance Every year, in Italy, 252 composting plants produce 1 million tonnes of compost. A powerful ally for a more sustainable agriculture and fertile soil.

by Roberto Rizzo

Roberto Rizzo is a science journalist. He is specialized in energy and environmental issues and since 2010 has taught in a Master’s of Scientific Journalism at SISSA of Trieste.

Fruit, vegetables, meat, coffee and egg residues. But also tissues and garden waste such as branches, leaves, grass and straw. This is all useful material to make compost, the natural organic fertilizer that can replace mineral fertilizers. And there is more to it. Compost can help offset the loss of organic matter in soils, a phenomenon caused by climate change and intensive farming, affecting many areas in Southern Europe, including Italy; an added value that up until now has not been spotted by policy makers.

part of soils’ organic matter. Indeed, the latter is the most important contributor of soil fertility. Made of living organisms present in the soil and the remains of dead organisms in various stages of decomposition, the organic matter augments the soil ability to absorb nutrients. Not only that; it also reduces the risk of soil compaction and superficial erosion because it can absorb considerable amounts of water and contributes to the dispersal of pollutants that may permeate soils.

Compost is an excellent natural organic fertilizer that can wholly replace phosphorous and potassium-based mineral fertilizers, and partly also the nitrogen-based ones. Compost’s production process, an aerobic process lasting a few weeks, is self-activated during the crushing and the bacterial action phases, thanks to which temperatures between 60-70 °C are reached. Therefore, it does not require chemicals, additives or external energy sources, as opposed to what happens with synthetic fertilizers. Not only does compost help make agriculture more sustainable by limiting the use of traditional fertilizers, but it can also play a role in soil protection because it becomes

Over the last decades, the phenomenon of the progressive loss of organic matter in soils has intensified, mainly due to two factors: temperature rise caused by climate change (decomposition of organic matter occur more rapidly with higher temperatures) and intensive agriculture, involving frequent tillage and overexploitation of soils. According to the EC’s JRC (Joint Research Centre), almost half of European soils have very low contents of organic matter, in particular in Southern Europe and in some areas of France, United Kingdom and Germany. In addition, less organic matter in the soil means more CO2 in the atmosphere. When organic

Carbon in Soils

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matter is formed, the soil absorbs carbon dioxide from the atmosphere: it is estimated that the soil contains about double the amount of carbon present in the air and three times as much of that retained by vegetation (European soils contain about 75 billion tonnes of organic carbon). Vice versa, when organic matter decomposes, the soil releases carbon dioxide into the atmosphere. “In some Italian areas, over the last 30 years, the amount of organic matter in the soil has halved: this means that the biological potential, fertility and the value of the soil itself have also diminished by half,” Massimo Centernero, CIC (Italian Compost Consortium) claims. “The situation is also worrying in other countries in Southern Europe: the ideal organic matter level must be restored, even though it cannot be done immediately, because it takes decades for organic matter to be recreated. Here compost comes into play. Together with more sustainable agricultural practices, it represents one of the elements that can restore organic carbon into the soil, thus contributing to replenish it with organic matter, guaranteeing high levels of natural fertility in soils. This issue is flatly ignored by policy makers, as no initiative to exploit compost as a resource has even

been taken, except for sporadic measures taken in some regions for rural development plans.” “I am in no position to say” continues Massimo Centemero, “if the solution would be the introduction of a system of incentives such as that adopted for renewable sources, but policy makers should realize that companies in our consortium actually produce renewable fertilizers. Our production chain has been overlooked by politics. The creation of CIC, which occurred a little over 20 years ago thanks to the voluntary commitment of some companies, confirms this. Over the years, the organic supply chain has expanded as well as activities carried out by consortia. Nobody tried to structure this system, we are trying to do that on a voluntary basis: so, this sector was born, has developed and expanded under its own steam.” High Quality Brand Not all compost available on the market is the same: it can be divided in two categories. The first one is “green compost,” derived from vegetable waste of public and private green and replaces peat imports, mainly for the floricultural market. The second is “mixed

renewablematter 08. 2016 Organic waste collection

65%

EU target

60%

national population involved in organic waste collection

compost”, obtained both from kitchen wet waste, public green and gardens; it is very rich in nutrients and is used for the formulation of fertilizers in agriculture. As guidance for compost buyers, in 2004 CIC introduced a high quality brand linked to the product (and not to the production process). In 2014, such brand covered 37% of national production: in the Italian 252 composting plants, over 1 million tonnes of compost a year is produced. “Almost 50 companies can boast such brand: we deal with the organization, while the monthly sampling and the lab tests are carried out by third parties,” Centemero points out. “All compost on the Italian market must abide by the law on fertilizers as to its chemical and physical characteristics, but the added value of our brand is determined by the high number of samples and independent analyses. Thanks to the 2,500 analyses we conducted over the years, we managed to build a huge database. Recently, in Italy, the number of anaerobic digestion plants is rising (46 at the end of 2014), where besides compost biogas and cogenerated electricity are also produced. Although with considerable investments, the new frontier is the transformation of biogas into biomethane, which can be used both for the domestic and transport sectors.” Organic Waste Collection has Been on the Rise for Twenty Years Organic waste treatment for the production of compost is a sector that does not seem to have been affected by the economic and financial crisis, it actually has guaranteed good profits for investors: a considerable share of such income has been invested in technological innovation. If, in the past, compost was only produced from vegetable waste, later on kitchen wet waste and then anaerobic digestion were introduced to produce biogas. Numbers speak for themselves. In 2014, the total of urban waste separate waste collection amounted to 13.4 million tonnes: the largest fraction is represented by organic waste collection (5.7 million tonnes), 42.5% of the total. Between 2013 and 2014, organic waste collection grew by 9.5%, but the trend has been positive for twenty years now, with a value always higher than 5%, from one year to the next. Such increase is due to the fact that an ever increasing number of municipalities carry out separate waste collection, especially that of organic waste. The bulk of 2014 growth, close to 10%, was determined by organic waste collection, which is now operational everywhere in Milan that, with its 1.3 million

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inhabitants significantly influenced the national average. “In Italy, the organic fraction collected is very good, even higher considering the amount per inhabitant, than that of some countries of Northern or Central Europe,” Massimo Centemero explains. “Today, the organic collection involves between 35 and 40 million Italians, about 60% of the total Italian population: we must be able to reach the remaining share of people if we are to achieve the 65% of separate waste collection EU target, considering the organic waste’s crucial contribution. Southern Italy is still lagging behind; in some areas in the South, separate waste collection is almost inexistent, mainly in Sicily and Calabria, even though in others (for example in Campania, in the Salerno provinces, Avellino and Benevento) very good rates of collection are achieved. Collection must be further developed in large cities too, where it is more difficult to manage due to the level of urbanization: there is a need to revise collection timetable and adjust the collection vehicles. But the Milan example showed that the organic fraction can be collected, citizens have responded very well. In Milan, as everywhere else, the success of separate waste collection depended on them.” Developing the Compost Supply Chain The most urgent action to take is to reach out to those areas where the organic waste

Consorzio italiano compostatori, www.compost.it European Compost Network, www. compostnetwork.info

collection does not achieve the desired result. But what is the best strategy to adopt? “The industrial sector, with the construction of composting plants, must set things in motion hand in hand with the development of separate waste collection,” Centemero concludes. “If the organic collection is already happening but the treatment plants are missing, it is a major problem because it is necessary to transport waste for hundreds of kilometres to the nearest plant and in the long run this could hinder the development of this sector. By the same token, plants without material to be treated would be equally harmful. There is no single best solution suitable for all eventualities: there are virtuous examples that have originated from public as well as private initiatives. In the North of Italy, starting from the waste emergency of some years ago, most provinces took it upon themselves to build special plants, with enough infrastructure, which could be enhanced in the future because there are regions such as Liguria and some other areas, where organic separate waste collection does not occur. There, incentivising policies need to be set up with regard to the use of compost, which, let us remember, restores organic fertility and important nutrients into the soil. Besides its economic value, linked to the market price with variations according to the areas, the environmental value that compost has in restoring carbon into the soil should not be neglected. All this is consistent with the circular economy principles that are guiding the decisions of the forthcoming European regulations.”

The Consortium Promoting Quality Compost The Italian Compost Consortium (CIC) is a non-profit organization that groups businesses, private and public institutions active in the compost production sector. Its nearly 100 members represent about 90% of the compost manufactured in Italy. The Consortium’s objectives include the promotion of composted materials, with special focus on high quality and controlled quality materials, the appropriate use of high quality materials in agriculture, the protection and control of correct methodologies and procedures to produce composted materials, research activity, study and popularization, organization of training and recurrent courses on composting and product use. The Consortium takes part in technical and work groups with

ministries and local administrations; it is also a member of the European Compost Network. “We promoted a Manifesto for the Mediterranean, also dealing with the protection of the organic matter in the soil,” Massimo Centemero explains. “Moreover, we created a Mediterranean Compost Network in Mediterranean countries, a basing including areas with similar climatic characteristics: hot summers, mild winters, organic matter scarcity, pre-desertification phenomena and tourism-orientated areas. The European Association will be very busy in 2016, having to deal with the circular economy package, the new European regulations on fertilizers and the classification of end-of-waste criteria.”

renewablematter 08. 2016

EMILIA-ROMAGNA Regions

and the Circular Economy Minimizing the production of mixed waste. This is what the Copernican revolution occurring in Emilia Romagna is trying to achieve with regard to MSW.

by Silvia Zamboni

Emilia-Romagna October 2015 n. 16, www.reteambiente.it/ normativa/22846/

Emilia-Romagna is the first Italian region to have taken on, by law, the circular economy as the North Star of its waste policy with the aim of reducing mixed MSW production and recover as much matter as possible for recycling. It did so through the eleven articles of Law 16 that came into force on October 5th 2015. Its title acts as a brief programmatic manifesto: “Rules and regulations supporting the circular economy, the reduction of municipal solid waste, the reuse of end-of-life goods, separate waste collection and amendments to the regional law n. 31 of 19th August 1996 (Protocol of special tax regulations for municipal solid waste management in landfills).” In order to implement this “philosophical” breakthrough, the law introduced a permanent Forum on the circular economy, where local institutions, civil society’s representatives, economic organizations representing businesses and environmental associations will participate.

As to MSW management, the law allocated single municipalities rather ambitious minimum targets to be achieved by 2020. Indeed, compared to the 2011 municipal solid waste production, the target is now to reduce it by 20-25%, in order to achieve an average of 150 kilograms per year per citizen by 2020. While, for separate waste collection, the bar is raised to 73%, of which at least 70% to be sent for actual recycling. So, these are the numbers. With an observation, before examining the articles in detail: the approved text is the result of two bills by people’s initiative and an intense participatory activity involving municipalities and environmental associations since the last administrative mandate. “Such aspect needs highlighting because it shaped the content of the law and its involvement with local situations” admits the Democratic Party regional councillor Lia Montalti, spokesperson for this law at the Committee for the Environment. Before being submitted to the regional Assembly, the two bills by people’s initiative – drawn up by Natale

Policy

PIACENZA PARMA

can be rigged by including huge quantities of inert waste from demolition – but rather a drop in the mixed waste fraction not sent for recycling.

FORLÌ

MODENA

Silvia Zamboni, is a professional journalist and an expert in environmental and energy issues. She authored books on the green economy’s good practices, mobility and sustainable development. She collaborates with Radio 3 Rai, magazines and dailies. She is a member of Ecoistituto’s scientific committee in Bolzano.

Belosi, an expert at Ecoistituto in Faenza – had been passed by the city councils of 60 large and small municipalities (including Forlì, Modena, Parma and Piacenza) and by the Reggio Emilia Province. An “institutional critical mass” which represented 60% of Emilia-Romagna population which, together with Legambiente, WWF and various local committees and eight past legislature’s regional majority councillors, put pressure on the Region in order for it to pass such initiative. So, within a few months, the text for Law 16 was defined, which, Belosi admits, to a certain extent, it integrates and improves on the proposals passed by the municipalities, 50% of which have been accepted. The objective to minimize mixed waste production, overriding energy recovery in incineration plants, is the real “Copernican revolution” in the MSW management. Basically, subverting the criterion adopted so far, the benchmark against which measuring the effectiveness of waste management municipal policies is no longer the amount of separate collection obtained – which as Belosi claims

In order to allow the municipalities to achieve the targets by 2020, Law 16 created three instruments aimed at rewarding local administrations and citizens achieving the best results in reducing mixed waste production. Vice versa, it penalizes the most prodigal. The first of such instruments is the Fund to promote waste prevention and reduction. Half of it is aimed at reducing the costs of MSW management for citizens-users in the municipalities achieving a high level of reduction of mixed waste (to be precise, the share produced for inhabitant equivalent – including city users and tourists – must be lower than 70% of the regional average). While the remaining 50% of the Fund is meant to finance, in the form of automatic and progressive incentives, projects and investments by the municipalities devoted to increasing separate waste collection, and waste production reduction. They are also aimed at the creation of municipal centre for reuse, where goods brought by citizens will undergo appropriate maintenance so that they may be used again. So, the most virtuous local administrations will be allocated more resources and local citizens will lower their bills. The Fund’s allocation scheme will remain in place up until 2020, while later on two thirds will be used to reduce bills and one third to fund projects for the municipalities. The second instrument is the Special Tax for MSW landfilling, as well as the disposal of waste in its unaltered state into incineration plants without energy recovery: such tax is added to the pre-existing Ecotax on waste management as provided by the 1996 law. The rationale behind such increment is easily understood. It is an attempt to make waste disposal economically unpalatable, thus paving the way for the dismantling of operating landfills in EmiliaRomagna. In this respect, the municipalities producing more mixed waste will be penalized, so they will have to pay a higher Ecotax to the Region. The third innovative instrument – quantity-based tariff – introduces another fairness criterion: citizens will pay their waste tax according to landfilled mixed waste fraction. Gone are the days of calculation systems based on the size of the house or the number of family members. In this way the regulatory gap that up until now prevented municipalities from adopting such tariff method is filled. Such measure, “based on existing experiences, proved to contribute to the reduction of waste production in an effective way” Montalti commented. “Now, the law requires all municipalities to adopt it by 2020. Moreover quantity-based tariff will allow

renewablematter 08. 2016 businesses to claim VAT on paid services.” With the ordinary waste tax, such opportunity did not exist. Regional policies introduced within a circular economy include the stated commitment to promote the development of plant design linked to reusing and recycling of both mixed and separate fractions. And also “the support to research of residual waste in order to modify the upstream production of currently non recyclable goods, thus promoting matter recovery,” highlights Michele Giovannini, mayor of Castello d’Argile (Bologna), who led the group of colleagues in their negotiations with the Region. Moreover, to maximise the reduction of organic waste production and the environmental impacts deriving from their management, domestic and community composting is encouraged, starting from users living in rural areas and in isolated properties. Citizens will pay tax on waste according to the landfilled mixed waste. Gone are the days of calculation systems based on the size of the house or the number of family members.

The financing of the incentive Fund is also in line with fair criteria, since “those municipalities producing more mixed waste will have to pay more” Montalti points out. Indeed, the Fund (article 3) will be partly financed with a percentage between 5 to 15% of the overall cost of mixed waste management paid by the municipalities (such cost is explained in the town economic-financial plans and is covered by the bills paid by users); partly (article 7) with a percentage of the above-mentioned Ecotax collected by the Region. It is not specified in the law and it will be decided on a yearly basis by the town council. Since the approved text does not specify the overall maximum amount of financing of the Fund, during a debate occurred in the Assembly, the town council has been entrusted by law to guarantee with its resources the minimum amount of €10 million a year. With regard to the fractions of separate waste collection, Law 16 has no restrictions: “Considering local experiences, the law encompasses both door to door and equivalent systems in terms of results, in order to avoid interfering inappropriately with the autonomy of municipalities” as explained by Montalti. Fines issued by the government on separate waste collection’s yields as of 31st December 2020 will be calculated on the basis of ISPRA (Institute for Environmental Protection and Research). An interesting aspect of the law is the less stringent attitude towards those people allocated a particular environmental service. Indeed, according to article 6 “the manager of the collection service does not have to coincide with that overseeing waste management plants,” thus eliminating the temptation by single managers to choose collection modalities according to the use of their incineration plants and landfills, rather than matter recovery.

Other innovations include the environmental inspectors to fight “wild waste”: managers of MSW collection services also act as ascertaining agents: they will be able to dispute users’ behaviour contravening collection modalities as envisaged by municipalities. As for businesses, those innovating in the production and product cycles aimed at reducing production waste, the law (article 2, paragraph 3) refers to incentives provided for in other regional regulations, for example the allocation of European funds. Moreover (paragraph 3), requires that waste management service can include incentives for those businesses operating towards the prevention of waste production. This also includes both charity and social activities and initiatives that have already obtained formal certification of their shops from an environmental and energy point of view according to protocols agreed with the Region (the first was signed in November with Legacoop and other Emilia Romagna large-scale retail trade). Here too, a large regulatory gap that in the past prevented municipalities to reward local businesses reducing waste production and good and matter recovery has been filled. Now that the law has been approved, the next legislative step the Regional Council and the legislative Assembly have to face will be to include in the regional waste Plan, currently being discussed, the new targets for mixed, separate collections and recycling, with special reference to the revision of plant design programming envisaged in the current plan approved in 2011. “With regard to the timings proposed by the new waste Plan, the political will to approve first and foremost Law 16 has prevailed. Such law promotes the reduction of mixed waste production and encourages recycling and separate waste collection” Montalti highlights. “The adoption of the new Plan will require strong commitment because according to the current one, of the 30 open landfills, only 4 will stay operational, and such number will have to be consistent with the objectives of Law 16. Something is being done with incinerators as well: the regional government is organizing local meetings in order to shut down a few, revising the previous plan, as it is now only natural, in the light of the new targets.”

Policy

Focus

GERMANY

Regarded as the European economyâ&#x20AC;&#x2122;s driving force, Germany aims at succeeding in the bioeconomy as well. Two words are key: vision and strategy. Such teamwork involving businesses, universities and institutions started in 2010 when Berlin allocated â&#x201A;Ź2.4 billion to fund R&D initiatives in the sector.

renewablematter 08. 2016

29%

Focus Germany

EMU’s

GDP

WILL BERLIN BE

the Global Capital of the Bioeconomy? Vision, Strategy and Teamwork: The German Winning Formula.

by Mario Bonaccorso

Mario Bonaccorso is a journalist and creator of the Bioeconomista blog. He works for Assobiotec, the Italian association for the development of biotechnologies.

Clib2021, www.clib2021.de/en Clariant, www.clariant.com

Wachstum und Stabilität. Germany has based its economy on this formula since the Weimar Republic period. Growth and stability for a country that for years has been recognized as the driving force of the European economy and that today is determined to establish itself also in the bioeconomy sector through a strategy and teamwork involving businesses, universities, research centres and institutions. Of course, the Dieselgate that hit Volkswagen could be very costly for the whole German industrial sector. It is a hard blow for a country that has always been proud of its reliability and runs the risk of becoming a burden for the future development of the bioeconomy, above all as Manfred Kircher, Clib2021 Cluster Advisory Board, stated, “in terms of authorities and public opinion’s perceived reliability.” But it could also have a positive effect, for example boosting the growth of advanced biofuels. At least, this is what is envisaged by Hariolf Kottmann, CEO of Clariant, the Bavarian chemical colossus that produces biofuels from agricultural waste.

Figures speak for themselves: Germany’s GDP represents 29% of the total monetary Union’s GDP and 21% of that of EU28, with a growth rate of 1.5% in 2014. As for public finances, 2014 ended with the second best budget surplus since reunification, about €12 billion. As a consequence, the job market keeps sending very healthy signals, representing a stabilizing factor for the economy: in 2014 employment reached the highest level in the last eight years, 42.7 million workers (+0.9% compared to 2013) with an unemployment rate of 6.7% (February 2014). Germany is the richest and most industrialized country in Europe. It looks to the future with strength and vision, copied by many other European governments. Its industry keeps innovating, collaborating with universities and vice versa. “In Germany, the opposition between science and philosophy,” the great Italian historian Carlo M. Cipolla wrote, “was solved in the 19th century with Technische Hochschulen (Technical Universities),” creating characters such as Franz von Baader, the Munich mining engineer whose philosophical works influenced Friedrich Schelling’s philosophy of nature. Or Rudolph Diesel, the inventor

Policy

+1.5 42.7

MILLION EMPLOYEES

2014

+0.9%

COMPARED TO 2013

EU28

6.7%

UNEMPLOYMENT

of the eponymous engine protagonist of the Dieselgate, also known for his internationalism. In 2010, long before the European bioeconomy strategy was announced (February 2012), Berlin allocated €2.4 billion to fund bioeconomy R&D until 2016 within its “Bioeconomy 2030 National Research Strategy” that laid the foundations for a change both in society and in the industrial sector based on the use of biological resources. Teamwork that involved the Ministry of Research, Food and Agriculture, Economics and Technology, the Environment, Economic Development, Health and Internal Affairs with the awareness that the bioeconomy as a meta-sector requires a holistic strategic vision. An example? Using research funds to stimulate greater sustainability in agriculture through soil protection and preservation. Furthermore, supporting within the Strategy “Biotechnology 2020+” new forms of cooperation between life sciences and engineering to create the bio-based products of the future. The collaboration between the Ministry of Research and the Ministry of Food and Agriculture, promoted by the creation

21%

GROWTH

in 2009 of the Council for the Bioeconomy as an independent advisory body led to the definition of a biorefinery roadmap in Germany, offering a very accurate representation of the most important technologies for using renewable resources for energy production and industrial purposes, and identifying at the same time the main obstacles and what is needed to implement suitable research policies. In summer 2013, the Federal Government led by Angela Merkel presented its National Political Strategy for the Bioeconomy, with which it defined “objectives, strategic approaches and measures to fully exploit the useful potential to create added value and employment as part of sustainable management and to support a structural change towards the bioeconomy.” The Council is now assisted by an interdepartmental working group, a control room for the development of policies on research, innovation, industry, energy, agriculture, the environment and climate change able to make Germany competitive internationally. The national strategy was followed by regional measures that put the bioeconomy at the heart of research funding. And the bioeconomy has

GDP

renewablematter 08. 2016

BioEconomy cluster, en.bioeconomy.de/

become the focal point of research carried out by universities and institutions such as the Helmholtz Association, the Leibniz Association, the Max Planck Society and The Fraunhofer-Gesellschaft. So, is it all a bed of roses? Obviously not. “It is true,” a manager of a great German company complains, “that we have planning and a vision, but then institutions waste a lot of time in implementing effective policies for the sector. For instance, we are still waiting for a law such as the Italian one banning plastic bags, despite being discussed for years. In the end, what really matters is the power relations between the industry using fossil resources and that using bio-based resources.” Anyway, the Ministry of Research portrays Germany as a bioeconomy hub and funds are allocated with priority to the “bioeconomy as social change” within a framework called

Trend of the industrial biotechnologies world market

2010

92 BILLIONS OF DOLLARS

+20% A YEAR

228

2015

The Driving Role of the Chemical Industry

BILLIONS OF DOLLARS

+20% A YEAR

515

2020

“Research for sustainability” based on four pillars: transforming research into technological innovation, developing social monitoring, promoting junior research groups, funding interdisciplinary research groups on social, economic and related scientific topics. Once again, a holist approach aiming at grouping together all the prominent actors of the innovation chain through platforms and networks that promote knowledge and expertise sharing: small and medium-sized enterprises, large industrial groups, universities, research centres, clusters, farmers but also consumers, investors and certifying bodies. This collaboration is made possible by “Innovation Alliances”, strategic cooperation forms between science and business focusing on areas of specific application or on markets of the future. They aim to create investment leverage committing businesses to a long term investment of €5 for each euro for research they obtain from the Federal Government. Clusters are a symbol of this German collaboration system. Germany has the only cluster in Europe that directly mentions the bioeconomy, the BioEconomy cluster in Halle grouping a wide variety of academic and industrial actors from different sectors integrating them in a chemical hub already established in the area. The Leuna industrial park is the biggest chemical centre in Germany and the first demonstration biorefineries were built here. While Clib2021, based in Düsseldorf (North Rhine-Westphalia), focuses on industrial biotechnologies and combines both interdepartmental and across-the-border value chains, 30% of its members are based outside Germany.

BILLIONS OF DOLLARS

The chemical industry is the driving force behind the German bioeconomy, sharing the objective of gradually getting away from using fossil resources and oil price volatility but above all reducing greenhouse gas emissions. According to data provided by VCI trade Association, in 2013, Germany, for its turnover, was the fourth global market for chemical products, overtaken only by China, the USA and Japan. It is by far the first European market; its share (about €200 billion) exceeds 25% of the total turnover. At global level, it is the first exporter of chemical products: with €160 billion in 2013, it overtook the USA, Belgium and China. In the same year, investments in R&D activities reached €11 billion (up from 8 in 2010). Germany has the largest chemical manufacturer in the world, BASF with a global turnover of €74.326 billion in 2014. But Germany also has Bayer (42.239 billion), Henkel

Policy (16.428), Evonik (12.917), Merck (11.501) and Lanxess (8.006). According to Gunter Festel, founder and CEO of Festel Capital, the global market of chemical products derived from using industrial biotechnologies is destined to grow from $92 billion in 2010 to 228 billion in 2015, reaching 515 billion in 2020. This means an annual increase of around 20%. Chemistry then will be increasingly biobased. And German companies are livening up the market not only by investing in R&D but also by stimulating Mergers & Acquisitions operations. In November 2013, BASF bought the USA enzyme manufacturer Verenium for €48 million, thus entering the crucial enzyme market until then dominated by Danish Novozymes and American Dupont. A market that according to ReportLinker’s forecast, a French research company, should grow from $4.2 billion in 2014 to 6.2 billion in 2020. In January 2012, Ludwigshafen’s chemical colossus invested $30 million in American Renmatrix, owner of the Plantrose technology for producing industrial sugar from lignocellulosic biomass at very competitive costs. At the end of 2013, with the same company it signed an agreement for the industrial scaling up and the future marketing of this technology. Still on the other side of the Atlantic, the German chemical company signed an agreement with Genomatica for the production of bio-based 1,4-Butanediol (BDO). The licencing agreement allows BASF to build a global-scale manufacturing plant for the production of 75,000 tonnes of bio-BDO per year. Butanediol and its derivatives are used for producing plastics, solvents, elastic fibres for packaging and the car and textile industries. BASF also signed a partnership with Dutch Corbion Purac, thus creating Succinity GmbH, a joint venture for the production of bio-based Succinic acid. In March 2014, the two companies announced the positive opening of the first plant for the production on industrial scale in Montmelò (Spain). Still in the field of bio Succinic acid, Covestro (former Bayer Material Science) announced in October 2015 a partnership with Reverdia (also a joint venture between French Roquette and Dutch Royal DSM) for the production of a thermoplastic polyurethane material (Desmopan) from renewable sources that can be used in footwear and consumer electronics sectors. Specifically, in its production process Covestro will use bio-Succinic acid Biosuccinium by Reverdia that last year in the USA obtained the USDA Certified Biobased Product Label certifying its contents are 99% biobased. Biotechnologies are an integral part of Evonik’s growth strategy whose product portfolio already includes amino acids, biocatalysts for the production of biofuels and biochemicals, bio-based polyamides and polyesters.

Investments’ Attraction But Germany also attracts foreign investments. French biotech company Global Bioenergies built in the chemical hub in Leuna its demonstration plant for the production of isobutene from renewable sources, receiving a €5.7 million grant for the German Ministry of Research. Tests are carried out in collaboration with Audi. In 1997, Swiss Clariant incorporated Höchst’s chemical specialities department and in 2011 it bought for €1.4 billion Bavaria-based Süd-Chemie specialized in the development of chemical products for smelting works, special resins, battery components and precision packaging. But above all owner of the lignocellulosic biorefinery in Straubing where Clariant has carried on developing the sunliquid® process for the sustainable production of cellulosic ethanol and biochemicals from agricultural residues. Süd-Chemie was incorporated into Clariant’s Biotechnology Group, exclusively devoted to industrial biotechnology with particular attention for the development of processes and products from renewable resources. Last October in Planegg, near Munich, they officially unveiled the Group Biotechnology Research Center (6,000 square metres of offices and laboratories completely devoted to industrial biotechnologies) that will collaborate with the Clariant Innovation Center in Frankfurt. Each year, the Swiss company spends €30 million to expand its Bavaria-based plant’s capacity to produce bioethanol from wheat straw. “If in a few years we assess the environmental impact of the Dieselgate, we will notice that it has promoted the spreading of biofuels,” Hariolf Kottmann, Clariant’s CEO, declared to German newspaper Euro am Sonntag. He also said that he believes that within 2-4 years there will be a leap in bioethanol sales and profit.

If in a few years we assess the environmental impact of the Dieselgate, we will notice that it has promoted the spreading of biofuels.

Germany at the Centre of the World with the Global Bioeconomy Summit To reassert its ambition to lead the European bioeconomy, at the end of November, Berlin hosted the Global Bioeconomy Summit sponsored by FAO and the European Commission: 700 delegates from all over the world (including Colombia, Malaysia, Argentina, Brazil as well as the Vatican) discussed strategies to support new economies based on biological resources. Germany knows that the bioeconomy can be developed only on a global scale, sharing vision and governance for a sustainable planetary development.

Global Bioeconomy Summit 2015, gbs2015.com/home/

renewablematter 08. 2016 Interview

Strategy and Strong Industrial Base: The Ingredients of the German Bioeconomy’s Success Manfred Kircher, member of the Advisory Board of Clib2021

“One consequence of the VW scandal will be that authorities do not believe companies any more. Authorities will check company claims on performance data more intensive. This might become valid for any claim of industry relevance, including GHG-reduction by bio-based fuel and feedstock. The bio-industry should avoid any unrealistic or misleading information to the public and authorities.” This is the observation of Manfred Kircher, a member of the Advisory Board of Clib2021, a German cluster for industrial biotechnologies, one of the most influential bioeconomy voices both in Germany and in Europe. In this interview with Renewable Matter, Kircher talks not only about the consequences that the so-called Dieselgate could have on the bioeconomy in Germany, but also about the strengths of a system that

The Bioeconomy Council In 2009, the Federal Ministry of Education and Research (BMBF) and the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV) established the Bioeconomy Council as an independent advisory board to the German Federal Government. The central task of the current 17 members of the council, whose expertise covers the full spectrum of the bioeconomy, is to search for ways and means for sustainable solutions, and to present their insights in a global context. The Bioeconomy Council convenes regularly to prepare position statements and expert advice, organise events on relevant issues, and promote the future vision of the bioeconomy to broader society. The activities of the council are oriented both towards long-term objectives as well as current policy requirements. The Bioeconomy Council completed its first working period on schedule early in 2012. The following summer, the Federal Government appointed a new committee under the same name, which began work in autumn of 2012. In the composition of members, equal consideration was given to the subject areas of the economy, science and society. (Source: www.biooekonomierat.de)

has adopted a strategy for some time now and what Berlin expects from the European Union to further promote the development of this meta-sector. Mr Kircher, to date, what are the major achievements in the bioeconomy in Germany? “German bioeconomy industries cover all relevant fields: Pharmaceuticals (Sanofi in Frankfurt is the world leader in insulin), food and feed additives (Evonik is the only company producing all industrially relevant L-amino acids), enzymes for food, feed, consumer care and industrial applications, bio-based platform-chemicals, polymers, lubricants, adhesives, bio-fuel and biogas (with more than 8,000 biogas plants Germany is leading). These products are provided by big industries like for example BASF, Evonik, Henkel and well-known SME such as BRAIN, evocatal and c-LEcta to name just a few. As the bio-economy is also established as a science topic at universities more and more promising start-ups are spinned-off.” How important is the presence of a national strategy to develop the bioeconomy in Germany? “The National Strategy plays a key role in harmonizing governmental measurements on federal and state level as well as private cross-institutional and sectorial programs. It also helps the ministries

Policy Biorefineries Roadmap Biorefinery concepts have already been pursued for a number of years in Germany. For example, a range of activities aimed at investigating and developing diverse biorefinery paths are in various stages of realisation. Examples of these are: • Sugar/starch biorefinery on the basis of cereal crops/sugar beet from the company Südzucker/CropEnergies in Zeitz (Saxony-Anhalt); • Wood-based lignocellulosic biorefinery operated by a consortium coordinated by DECHEMA as part of the Fraunhofer Society’s Chemical Biotechnological Process Center at the chemical site in Leuna (Saxony-Anhalt); • Lignocellulosic biorefinery based on straw from the Group Biotechnology of Clariant in Munich and Straubing (Bavaria); • Grass silage-based green biorefinery from the company Biowert in Brensbach (Hesse) • Grass-based green biorefinery from the company Biopos in Selbelang (Brandenburg); • Straw-based synthesis gas-based biorefinery from KIT in Karlsruhe (Baden-Wuerttemberg). (Source: www.bundesregierung.de)

concerned (agriculture, economy, ecology...) to streamline public funding actions. All together the National Strategy serves as a well-accepted guide-line for all stakeholders.” What role does the German Bioeconomy Council play? “The Bioeconomy Council serves as the interface between public and private stakeholders. This council not only formulates the National Strategy in consultation with governmental authorities and organizations representing industry, science and civil society; it also communicates the National Strategy to the stakeholders mentioned.” Biorefineries are the central point of the bioeconomy. What are the biorefineries located in Germany? “In Germany there are three types of biorefineries. 1) Individual production facilities like sugar refineries (sugar derivatives), oil mills (lubricants, bio-diesel), chemical production (bio-based polymers), fermentation plants (pharmaceuticals), biogas plants etc.. 2) Chemistry parks with bio-based production units taking advantage of the cascade use of the whole site’s material flow. Frankfurt-Hoechst is a prominent example where the site’s material flow ends in Europe’s biggest industrial biogas plant. It even supplies gas to the public gas grid. 3) New biorefineries to be integrated into chemical parks. The most prominent example

is the Fraunhofer pilot plant in Leuna. It targets on fully integrated production of platform chemicals from woody biomass.” From your point of view, what makes Germany an attractive country for investment in the bioeconomy? “Investors evaluate among other factors the home market, access to global markets and production cost. Concerning the domestic market bio-based products are very well accepted and being an exportchampion Germany is well established in foreign markets. Although some cost-factors like e.g. staff-costs in Germany are generally higher than in other regions the country can play out other pillars of competitiveness like excellent infrastructure, quality of personell and a reliable and supportive political and administrative framework. Looking from that angle the Bioeconomy Council turns out to act as a competitive factor as well.” Clariant stated that the Volkswagen scandal will boost the advanced biofuels. What is your opinion? What are and will be the effects of this case on the bioeconomy in Germany but also at world level? “One consequence of the VW scandal will be that authorities do not believe companies any more. Authorities will check company claims on performance data more intensive. This might become valid for any claim of industry relevance, including GHG-reduction by bio-based fuel and feedstock. The bio-industry should avoid any unrealistic or misleading information to the public and authorities.” At the end of November Germany hosted the Global Bioeconomy Summit. From German point of view, what should the EU do to support better the bioeconomy and be competitive at world level? “Firstly, products of the bioeconomy must become competitive by themselves. However, right from the start new bio-based processes and products cannot compete with (fossil-based) alternatives whose cost have been cut down over decades. Bio-based products must get the chance to enter the ‘learning curve’ of process optimization. Funding pilot- and demonstration plants through the current HORIZON2020 program is therefore the right way but the hurdle for private engagement should be lowered. “Secondly, beside (limited) biomass new bioprocesses recycling carbon from gaseous sources are currently providing another option to replace fossil carbon. Although these technologies do not discriminate between bio- and fossil carbon such carbon-recycling should be accepted as sustainable in the regulations and norms concerned. “Thirdly, although chemicals produce in average by factor 7 more value than energy and in addition generate more jobs EU policies prioritize bio-fuel and -energy. It would be desirable to support both sectors in a more balanced way.”

Although some cost-factors like e.g. staff-costs in Germany are generally higher than in other regions the country can play out other pillars of competitiveness like excellent infrastructure, quality of personell and a reliable and supportive political and administrative framework.

renewablematter 08. 2016

Focus Germany

Bioeconomy Drives Resource Efficiency and GREEN GROWTH Interview with Christine Lang edited by Mario Bonaccorso

Christine Lang is one of the founders and the Managing Director of ORGANOBALANCE GmbH. Since 2012, she has been the Chairwoman of the German Bioeconomy Council. In 1993 she moved to the Technische Universität Berlin and was promoted to Professor of Microbiology and Molecular Genetics.

ORGANOBALANCE GmbH, www. organobalance.de/en/ index.html

“Bioeconomy can no longer be seen only as the replacement for fossil raw materials. It is based on the combination of renewable resources and innovation to drive resource efficiency and Green Growth.” To say this – in this interview with Renewable Matter – is Christine Lang, chairwoman of the German Bioeconomy Council. With Lang we talk about the bioeconomy in Germany, the Federal strategy, the role of the Council, the perception by the German public opinion. “It is important – she says – to act and argue authentic in the public dialogue and to communicate benefits and challenges transparently.” Germany holds an internationally leading position in the establishment of a bioeconomy. At the end of 2010 – as one of the first nations – your country published the interdepartmental “National Research Strategy BioEconomy 2030,” which is to span six years, and thus has set the course for a biobased change in industry and society. What is the situation of the bioeconomy in Germany at the moment? “The Bioeconomy in Germany is strongly supported by the Federal Government. This is due to the National Research Strategy Bioeconomy 2030 that is donated with €2.4 billion and to the National Policy Strategy Bioeconomy. In a recent paper analyzing the competitiveness of the bioeconomy in Germany, the Bioeconomy Council stated that the economy is lacking behind in terms of the use of renewable resources. According to our analysis this

was due to Germany’s exceptional economic strengths which makes it hard for the companies to change their structure. The council is advocating strongly to think forward and to anticipate a necessary change in the resource basis.” What are the pillars of the German strategy? “The Research Strategy 2030 defines five action fields: Global Food Security, Sustainable Agricultural Production, Healthy Nutrition, Industrial use of Renewable Resources and Bioenergy. The latest discussions indicate that societal dialogue and monitoring might play a more important role in the future – we expect a new strategy after the current runs out in 2016. However, after intensive debates, the use of bioenergy will be more or less only based on waste or side streams as feedstock.” In this framework, what is the role of German Bioeconomy Council? “The German council has three priorities: firstly, advising policy on how to improve framework conditions for bioeconomy in Germany – in particular with an international perspective, secondly fostering international cooperation and finally continuing and advancing the dialogue with the society.” The bioeconomy also requires a cultural change. What is the perception of the bioeconomy by the German public opinion? “We do not have any data, however my personal

Policy

of biobased products – for example a skirt made from milk or tires based on dandelion. Touching bioeconomy products teaches more than reading books...”

Council for the Bioeconomy (Bioökonomierat), www. biooekonomierat.de/en/

Federal Ministry for Education and Research (BMBF), National Research Strategy BioEconomy 2030, Berlino 2011; tinyurl.com/ z9aaqp3

Federal Ministry for Food and Agriculture (BMEL), National Policy Strategy Bioeconomy, Berlino 2014; tinyurl.com/je24s8q

opinion is that the least part of the German population knows what bioeconomy exactly is. The German term allows for misunderstandings mixing up ecology and economy – in fact bioeconomy is neither this or that. It is something in between. Bioeconomy can no longer be seen only as the replacement for fossil raw materials. It is based on the combination of renewable resources and innovation to drive resource efficiency and Green Growth. It is important to act and argue authentic in the public dialogue and to communicate benefits and challenges transparently. The council has received very positive reactions with an exhibition

The central questions of the 21st century are not whether climate change is coming, how strongly the world population is growing and to which extent the emission of fossil carbon has to be lowered, but how economy and society will be able to best meet these developments and how research and innovation funding contributes towards this. From your point of view, how is it possible to bring ecology and economy together? “It is clear, that – without major adjustments – the continued emission of greenhouse gases and the related changes in climate conditions will irreversibly damage the global ecosystem and will involve incalculable economic risks. However, as a scientist I remain optimistic that innovation will lead to new solutions that the global problems might get solved. We have to act now, however. One of the biggest problems of today are global inequalities. They lead to dissatisfaction, war and outflows of refugees. Bioeconomy has the potential to add solutions in the fight against poverty and hunger. This is by the way discussed at the Global Bioeconomy Summit that the German Council organized on November 25th – 26th. The outcome of the conference was a communiqué defining cornerstones for a global and sustainable bioeconomy. We are aiming for a global agenda making bioeconomy part of the overarching debates of Sustainable Development and in climate change mitigation.” The themes of the bioeconomy are strongly interconnected with those of circular economy. What measures is the German government taking in this field? “Circular economy is a very important topic within the field of resource efficiency. The German Government has amended the ‘Kreislaufwirtschaftsgesetz’ three years ago. It is the central law for the treatment of waste and to support recycling, conservation and resource efficiency. We consider it an important task to align the principles of a sustainable bioeconomy with those of a circular economy. What are the main hurdles to the implementation of the bioeconomy in Germany and in the European Union? “The lack of capital, industrial application and embedding the concept of bioeconomy in the society.”

renewablematter 08. 2016

CARS:

Designâ&#x20AC;&#x2122;s Love Affair with New Materials

by Marco Capellini

Bamboo, cork, flax, wool and wood. But also tomato skins. These are just some of the materials that car manufacturers are experimenting with to make cars more efficient, lighter and to cut fuel consumption. New vehicles design is increasingly searching for performance solutions linked to materials and fuel consumption. On the one hand, there is the need for continuously improving engine efficiency in order to

cut fuel consumption and reduce CO2 emissions. On the other, finding lighter high-performance materials to reduce vehiclesâ&#x20AC;&#x2122; weight. Fuel consumption and materials, a formula that in recent years

Case Histories

Marco Capellini, was one of the first people in Italy who worked on design for sustainability. He is Matrecâ&#x20AC;&#x2122;s CEO â&#x20AC;&#x201C; Sustainable Materials & Trends, and a freelancer at his own study MarcoCapellini | sustainable design & consulting.

has led to the development of design solutions able to deliver crucial improvements in fuel consumption. So, many car manufacturers have started to develop and use eco-friendly materials, often trying new ones, either bio-based or recycled. These design solutions, adopted by several car manufacturers, are proof that something has really changed. While respecting strict safety and protection standards for vehicles and drivers, sustainable innovation is a viable route to take even for a complex sector such as the motor vehicle industry.

Over the last year, we have carried out some research on eco-friendly materials for vehicles, collaborating with motor vehicles manufacturers looking for new solutions. Bamboo, coffee, cork, flax, wool, wood and hemp are some of the materials being tested for making interior furnishings and structural components. Many of these solutions, already adopted in vehicles on the market or developed for concept car projects, help us understand the state of the art as far as the search for materials is concerned.

renewablematter 08. 2016

While respecting strict safety and protection standards for vehicles and drivers, sustainable innovation is a viable route to take even for a complex sector such as the motor vehicle industry.

Conceived for the urban environment and exclusively with an electric engine, BMW i3 is a car made including all the sustainability concepts. Starting from the fact that its production factory only uses self-generated energy from renewable sources. The car’s interior is characterized by the use of renewable natural materials: kenaf fibre for door panels, naturally-tanned leather for seats and interior panelling, seats made with up to 100% recycled fibres. Other BMW experiments have led to the use of salmon’s skin recycled from the food industry for some interior trims, bamboo and certified wood for shelves and dashboard’s surfaces. Ford too has been experimenting with new materials for years. The results of some of these trials are adopted in some vehicles, for instance recycled fabric and bioplastics from tomato fibre: dried tomato skins can become cable holders for the electrics or glove compartments for small objects. Thanks to, in some cases, very advanced design, Peugeot has also come up with many eco-friendly concept cars. For example,

Peugeot Exalt’s interior is made from recycling the French newspaper Le Figaro, so much so that in some areas you can still see the newspaper’s printed writing.

Exalt, a car made paying particular attention to the choice of materials used to try to source them as closely as possible to the car’s market. Basically, in the Chinese market, the car’s interior is made using ebony (choice influenced by the widespread presence of these trees in Asia), while in the European one NewpaperWood, obtained from recycled newspapers, is used. Specifically, Peugeot Exalt’s interior is made from recycling the French newspaper Le Figaro – the colour and the appearance are very similar to dark wood – so much so that in some parts you can still see the newspaper’s printed writing. Following the same philosophy, Peugeot 208 Natural, conceived and designed by a styling team at San Paolo’s Technical Centre, uses recycled materials, some of them locally sourced. They include carbon fibre from the aviation industry, Pirarucu fish skin tanned with vegetable dyes, bamboo and recycled paper. R&D are continuously evolving leading to projects such as the collaboration between Jaguar Land Rover and the technical compounder Luxus, co-funded by the EU initiative Eco-innovation to promote the marketing of a range of light propylene-based compounds containing more than 60% recycled material. This material is destined to the interior panelling for the European car industry, allowing the car sector to increase the use of recycled polymers in order to meet the legal targets for end-of-life vehicles (ELVs). Finally, it is worth mentioning Biofore, a concept car made with innovative biomaterial for the car industry. The majority of traditional components made of plastic

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materials has been replaced with new biomaterials produced with UPM Formi and UPM Grada. These two materials, the former a cellulose fibre reinforced plastic composite and the latter made with certified wood, are recyclable and help significantly improve the total

environmental performance of vehicles taking into consideration their entire lifecycle. Surely, the introduction of regulations favouring the concept of the circular economy will help improve the credibility of new vehicles that will use sustainable solutions so far adopted in concept cars.

Info www.matrec.com

renewablematter 08. 2016

The BUDDING Bioeconomy by Giorgio Lonardi

Giorgio Lonardi is a financial and economic journalist.

Separate waste collection of coffee grounds used as fertilizers for vegetable gardens and flowers. Degraded areas transformed into vegetable gardens thanks to virtuous practices. Traditional plastic replaced by biodegradable materials in school canteens. These are only a few of the projects sponsored by Fondazione Cariplo for a more collaborative and sustainable economy.

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“Our strategy is inspired by a series of guidelines, starting from the protection of natural capital – an aspect that we take very seriously – and the management of natural resources such as water, air and soil, which are very important elements of the common good.” Elena Jachia – Head of Fondazione Cariplo’s Environmental Area – does not mince her words when she talks about those principles that on the one hand outline the Foundation’s investment guidelines for the protection of the environment while explaining how the bioeconomy’s very own growth is part of a larger plan. “Conserving natural capital,” Jachia says “means also developing those economic activities contributing to conservation itself.” “We aim at a more collaborative, more sustainable and circular economy committed to a careful use of resources, to avoid waste and to recover and reuse all materials and resources”, she adds. In sum, Fondazione Cariplo believes that natural capital protection is the framework within which to include these projects able to develop elements or “buds” of bioeconomy. Cariplo foundation is a philanthropic entity granting non-refundable contributions to Third Sector organizations for setting up socially useful projects. In Italy, it is the undisputed leading donor sponsoring initiatives in the art, culture and scientific fields, as well as personal and environmental causes. It is worth mentioning that in 2014 the Foundation invested in Lombardy, Novara and Verbania over €11 million in the environment alone with an increase of 2.8% compared to the previous year. Of course, it is difficult to single out an investment specifically allocated to the circular economy and the bioeconomy, but there are initiatives going in this direction. A good example of Fondazione Cariplo’s commitment to the bioeconomy is offered

by Caffè in campo! Verso la strategia Rifiuti-Zero (“Coffee to the fields! Towards a zero-waste strategy”). Such initiative involved five municipalities of Parco Agricolo Sud Milano and was sponsored through the call for tenders “Building sustainable communities” whose objective was “to contribute to the development of initiatives aimed at an efficient and sustainable management of the resource cycle in local communities.” This experience was led by Cantiere Aperto consortium while Venti Sostenibili – an association of young engineers expert in sustainability, design and information technology – played a more practical role. Sasom – a company managing public green areas and waste in Southwest Milan – and The Agricultural School in Monza also took part in the project. Caffè in campo’s most interesting result has been the creation of a network for the separate waste collection of coffee grounds which involved approximately sixty public operators including hotels, bars, canteens and restaurants. Every month they collect up to two hundred kilograms of spent coffee. “Our goal,” as Giulia Detomati, founder of Venti Sostenibili explains, “was to improve the separation of organic waste so that they can no longer be considered a cost for the community, as they are now, but a resource, able to create new economic supply chains. This is why we concentrated on coffee grounds, particularly useful to fertilize local soils suited for horticulture.” Indeed, those two hundred kilograms of coffee grounds recovered every month have been used as fertilizers for flowers and vegetable gardens. “But also for edible mushroom farming,” Detomati points out, “such as Pleurotus ostreatus (the oyster mushroom). We have built a short supply chain by engaging with local farmsteads that have learnt to appreciate the qualities of this all-natural new fertilizer.” Unfortunately, Parco Agricolo Sud di Milano’s

renewablematter 08. 2016

Carate Brianza’s vegetable gardens are not only an additional source of income for many families in need but they also educate citizens to live within a biosustainable production chain.

experiment had one limitation: the very fact that it was just an experiment. Current regulations do not recognize coffee grounds the status of “seconday raw material,” thus preventing the creation of a stable network of such process. Nevertheless, Giulia Detomati is still convinced that the initiative is good. “For a start, the test has been positive: we ascertained that what was considered waste can now be used to the advantage of everybody as secondary raw material. This, in turn, will give us strength to fight another battle to modify laws for the environment and the community. We also developed and promoted an app, ‘junker’, helping the five municipalities’ citizens to improve their separate waste collection. Junker is the answer to the simple question: ‘Where can I through it?’ The project took shape through an on-going relation with local situations, people, local governments and public operators. There have been meetings on composting, on how to achieve zero waste objectives and obviously on coffee.” Active involvement of local communities is one of the elements common to all projects sponsored by Cariplo Foundation. This is confirmed by the calls for tender on “Resilient Communities” that in order to face environmental shocks intend to “define new strategies integrating objectives of natural capital protection and sustainable development with effective mitigation and adaptation

actions.” So, they aim at “strengthening territorial systems’ resilience, i.e. their ability to absorb shock and stress, by reacting through appropriate actions allowing to mitigate damage and face consequences.” Here too, the Foundation believes that “an approach with the involvement of communities enabling to pinpoint the most suitable solutions to local contexts is necessary.” Arnaldo Bensi, head of Demetra Onlus and director of the Project Resilient Vegetable Gardens in Carate Brianza knows all this very well. Such project is carried out in partnership with Associazione Vivere Giovani ACLI, Associazione Socio Culturale CCA and Carate Brianza municipality. “Our objective” he claims “was not only that to reclaim degraded areas which in the past were used as vegetable gardens in order to bring them back to their original function, by resorting to virtuous practices such as composting, permaculture and the gradual abandonment and elimination of pesticides, while reducing waste within the logic of the circular economy. It also aimed at strengthening and reviving the sense of community and collaboration amongst citizens in Carate.” To this end, 28 vegetable gardens have been allocated to the elderly, 8 to families and 2 to the community. “The condition that we included in the project” Barini points out “is that all those who are

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Fondazione Cariplo believes that natural capital protection is the framework within which to include these projects able to develop elements or “buds” of bioeconomy.

allocated a vegetable garden must work at least one hour a week on communal areas.” But there is more. Carate Brianza’s vegetable gardens are not only an additional source of income for many families in need but they also educate citizens to live within a biosustainable production chain. They also allocate their surplus to charities such as Caritas. Another interesting example is the project devoted to the Adamello blond goat, with GAL Valle Camonica Val di Scalve in the lead. This project is clearly based on a market logic: together with the need to avoid the extinction of a species considered endangered by the EU and that has been an important resource for Valcamonica and Valsaviore for centuries, all efforts are made to build a sustainable economic production chain. Hence the choice to create a multipurpose centre for the protection of this native breed for the development of a selection and restocking project. Meanwhile it could act as an outlet and a dairy farm for the production and marketing of fatulì, a famous local cheese. Ri-Ponte is a special initiative, a project carried out in Ponte Lambro, a Milan leading neighbourhood within Fondazione Lombardia per l’Ambiente. The initiative involves people and many local players: from AMSA, the company managing waste and street cleaning in the city, Milano Ristorazione – the Milan

company providing 80,000 meals to school children daily – the Municipality itself, Ecoistituto della Lombardia and the neighborhood’s Laboratorio. Within Ri-Ponte, as Mita Lapi claims – Head of the Area of Sustainable Research and Development for Fondazione Lombardia per l’Ambiente, dozens of initiatives have been set up to turn Ponte Lambro into a resilient neighbourhood aiming at reducing the production of plastic waste. So, two of the Ri-Ponte initiatives fit in with the bioeconomical rationale. The first is about the sale of detergents on tap at Mercato Coperto Comunale: an experiment that involved citizens by showing them a new consumption model. The second and more ambitious experiment was carried out in conjunction with Milano Ristorazione and was about the replacement of plastic with biodegradable material in school canteens. It might be a coincidence but – almost simultaneously with the Ponte Lambro trial – Milano Ristorazione adopted the biodegradable and compostable plates in all the city’s school canteens.

Info www.fondazionecariplo.it/ it/index.html www.caffeincampo.it

renewablematter 08. 2016

Columns The Blue Yonder

Growing Little Blue Companies Ilaria Nardello is the Executive Director of the European Marine Biological Resource Centre (EMBRC), the European infrastructure for scientific and applied research on marine biology and ecosystems.

Atlantic BlueTech Project, tinyurl.com/ooe86jv

European Commissionâ&#x20AC;&#x2122;s Blue Growth strategy, tinyurl.com/o2p3rgf

Climate change and environmental degradation, a sustainable supply of food and energy and human health and aging populations are some of the challenges that European countries are facing today. In this context, marine biotechnology can and should make a major contribution to the economic recovery, growth, creation of jobs and development of smarter and greener economies in Europe. The Atlantic BlueTech Project questioned the maturity of this sector, in the Atlantic regions of France, Ireland, Portugal, Spain and the UK. Dominated by small and micro enterprises, the sector appears to be still relatively young and very dynamic, with a significant number of companies established over the past 15 years, and the older businesses going back only to the 1980s. In this landscape, innovation is a must for companies to survive. Together with industry-university clusters and EU Projects, industry-research cooperation

appears as one of the main drivers for innovation. Access to technology was on the other hand identified as one of the major obstacle to growth and innovation, as well as finances. Stronger incentives are needed to encourage academic/industry links and the co-development of both technology and related intellectual property: the increased emphasis on protecting IP in research centres is hindering joint innovation development between industry and academia; and academic research groups and infrastructures fail to meet the criteria for an effective industry engagement. The need is for a marine bio-resources research infrastructure dedicated to industry innovation at the transnational level; and for human resources acting at the interface between industry and academia. ABTâ&#x20AC;&#x2122;s recommendations include the support of collaborative programmes within the education sector and the development of strong academic-industry links through co-location of innovation business parks. Support the development of trans-disciplinary marine bio-resources clusters, built around a reference knowledge provider, should also be a priority for public agencies. Industryuniversity partnerships in education and broad-based industry-led research initiatives would also make significant contributions in achieving socio-economic amelioration and smart specialisation of the Atlantic regions of Europe, along the lines suggested by the European Commissionâ&#x20AC;&#x2122;s Blue Growth strategy for the sustainable and socially inclusive development of the marine bio-resources sector.

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Natural Capital

The Unbearable Heaviness of Food Production Gianfranco Bologna is Scientific Director and Senior Advisor at WWF Italy. He is Secretary General of the Fondazione Aurelio Peccei, which represents the Club of Rome in Italy.

FAO, Natural Capital Impacts in Agriculture. Supporting Better Business Decision-making, June 2015; tinyurl.com/q5b3kh7

Costanza R. et al., “Changes in the global value of ecosystem services”, Global Environmental Change, v. 26, May 2014; tinyurl.com/m9l4t6n

Worldwide, the environmental cost of intensive and industrial agricultural practices amounts to $3 trillion yearly, a staggering sum, bigger than the UK’s GDP. These are the bewildering data emerging from a study published by FAO (Natural Capital Impacts in Agriculture. Supporting Better Business Decision-making) in collaboration with Truscot advisors, a team of experts providing support to companies and investors to understand the repercussions of environmental issues from the business point of view. But the study, besides estimating the environmental costs caused by unsustainable food production practices, highlights methods to start alternative approaches to intensive agriculture able to provide better results from an environmental and economic point of view to the whole agricultural sector. In reality, there is a wide range of viable solutions to promote more sustainable agricultural practices that will reduce impacts and help countries tackle the food-production-increase challenge while satisfying the needs of growing population. Today, agriculture and animal farming take up 38% of the world’s land surface: the most significant figure of human-induced physical transformation on the planet’s ecosystems. These activities rely on goods and services available for free thanks to natural systems that provide viable soil, stable climate and good water resources. The analysis carried out by FAO and Truscot studied agricultural and animal farming practices of over 40 countries that represent 80% of four agricultural crops (maize, rice, wheat and soya) and four of the significant commodities of animal farming (beef, milk, pork and poultry). In particular, they analysed the economic benefits deriving from a range of alternative agricultural and animal farming methods in four case studies: animal farms in Brazil, rice production in India, soya in the USA and wheat in Germany. The study showed that today animal farming costs amount to about $1.81 trillion. In Brazil alone, the environmental impact of beef production is estimated at $600 million, mainly due to damage caused by deforestation. While in China, pork production costs $327 million deriving from soil conversion for feed production. While $1.15 trillion is the total annual cost deriving from the production of crops. China

is ahead with $130 million for maize production, followed by the USA with $90 million mainly deriving from soil use modifications and water pollution. In Germany, wheat production costs $62 million, due in particular to water pollution from nitrogenous fertilizers. But – as highlighted by the study – these environmental costs can be curbed by adopting alternative approaches. For instance, they could be reduced by 11% by decreasing the number and concentration of livestock in Brazil, allowing the vegetation to grow back. If the economic and financial world began to understand the costs involved in the replacement of stocks and services nature offers us, the economic impact of the environmental degradation would be easier to assess. According to a recent study carried out by Robert Costanza and other famous ecological economists, between 2007 and 2014 – due to ecosystem degradation – humanity lost $20 trillion a year in environmental services. And the study only took into consideration “direct” ecosystem services: fresh water to produce food, soil quality, wood value etc. It did not account for “indirect” ecological functions such as the preservation of top predators in ecosystems’ food chains, crucial in guaranteeing their productivity and resilience. Or pollinators necessary to keep agriculture alive. But even so, it is clear that the entire global economy is heavily subsidized by nature. If productive economic systems should pay for these services, even if underestimated, there would be a 27% net reduction in the global economy output. This is why it is vital to spread the results of the many authoritative international programmes including The Economics of Ecosystems and Biodiversity (TEEB), Intergovernmental Platform on Biodiversity and Ecosystems Services (IPBES), and the Natural Capital Project. All these analyses show how managing ecosystem sustainably is crucial and advantageous for all countries and economic sectors. It is fundamental to start a new economy based on the paramount importance of natural capital and its protection, otherwise we will have no development or wellbeing alternatives.

renewablematter 08. 2016

Innovation Pills

Micropigs from Beijing Federico Pedrocchi, is a science journalist. He directs and presents the weekly programme Moebius broadcast by Radio 24 – Il Sole 24 ore.

An accurate and spectacular article on the themes tackled by our magazine when it deals with materials that can be derived from various types of food. A space devoted to such scenario, which is fundamental for energy balance, would fit in nicely.

More or less the size of Snoopy, they are a little bigger than a cat. They weigh around 15 kilograms, far less than the 100 kilograms of normal pigs. Nevertheless, they are still hogs. Pigs, not from Guinea, because they are made in Beijing, at the Beijing Genomics Institute (BGI). It is a pet market creation and it is successful – they say – because – true – we all love pigs, regardless of their size. Kids too – those lucky enough to meet a piglet in the countryside, are mad about them. The project started with an alteration of the growth hormone of an Asian hog, the Bama pig, which is already a small-sized hog, although it weighs around 35 kilograms. By disabling the growth hormone receptors, as I said before, specimens weighing 15 kilograms have been obtained. These were made to mate with normal Bama sows. As expected, the resulting offspring were a mixture of large and small piglets. Then, only the small ones have sex. Mission accomplished. There has been some ethical as well as cultural criticism: why carry out genetic experiments for the sake of our Disney animal fantasies? Disney culture is hardly condemnable, but we should be able to separate those beautiful blue topaz cartoon elephants from those industrial projects where blue poison arrow frogs are made to mate with dwarf cow elephants, weighing only two tonnes (and if they develop their propensity to leapfrog, things can get tricky). There is one more aspect to take into consideration. Genetics has great positive potential, a technique able to achieve remarkable results and to get rid of that wild DIY (Oh boy! I couldn’t agree more) that humans have practiced for millennia. Corn ears – as fossil evidence shows – were three centimetres long. And how many of us know that the dachshund, the greyhound, the Bergamasco Shepherd Dog and the St. Bernard are not different species but breeds, more or less invented by man from a wolf? But clearly and understandably if genetics moves into the market of living gadgets, suspicions will rise.

Lastly, there is a technical criticism of micropigs. Although smaller, they are still pigs. We all know that hogs’ dirty nature is a made-up story. Over the centuries they have always been fed rubbish, have kept them in the mud for convenience and he/she have put up with it patiently, despite their intelligence that allows them to appreciate – you bet – properly prepared mash. But pigs are notoriously active animals with their trotters and snouts, and a powerful yet cluttered set of teeth. Pigs have got an inquisitive nature. In other words, the 15 kg hog, the little Bama – not yet marketed by BGI laboratories – if kept in a flat, could damage furniture, wires, hanging clothes, shoes, plants, preventing any tradition, starting from the Christmas tree. We all know how the fashionable little bunnies, with their passion for wires, ended up. Nothing compared to the mini-Bama potential. As a consequence, lots of piglets could end up being abandoned here and there. Perhaps it would be a good idea if Renewable Matter started to come up with ideas on how to “recycle” these micropigs.

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Sustainability actions

THE PROJECT The effects of climate change on water are a reality that today we must all face up to. And a company like the CAP Group, which has adopted the sustainable management of water as its mission, has a duty to play a leading role in identifying the most innovative and eï¬&#x20AC;ective technological solutions for protecting and looking after it in the best possible way. This is the thinking behind CAP 21, a programme that will keep us busy through 2016 and beyond: 21 sustainability actions that we have decided to adopt in order to tackle the challenge of climate change. CAP 21 is therefore our tangible, day-to-day, ambitious and passionate response to the issues raised by COP 21, the climate conference in Paris that is set to shape the international debate over the next few years.

#Watertosave

#Watertodrink

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WATER SAFETY PLAN (WSP) INTEGRATED REMOTE CONTROL INFRASTRUCTURE PLAN FOR AQUEDUCTS

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MBR MEMBRANES AND PHYTOTREATMENT MANAGEMENT OF EDDY WATER NITROGEN AND PHOSPHORUS

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2018 GOAL ZERO IMPACT HEAD QUARTER SUSTAINABLE MOBILITY

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WATER PiPP WEBGIS ELECTROSLUDGE PROJECT, LIFE 2014

#Watertosustain

#Watertoenhance

ENERGY SAVING

#Watertoinnovate

#Watertorecover

FOUNTAINS 2.0

SURFACE GROUNDWATER WELLS TAP WATER AT SCHOOL

20 21

ENVIRONMENTAL REPORT GREEN PUBLIC PROCUREMENT PAPERLESS POLICY

#Watertoconstruct

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PARTECIPATE WORKSITE NO DIG TECHNOLOGIES RAIN WATER

www.gruppocap.it @gruppocap

Increasing our sustainability actions

14 - 17 March 2016 Amsterdam ACCELERATING PARTNERSHIPS & INNOVATION IN THE BIO BASED ECONOMY