The Bio-Based economy: A Renewed and Renewable Vision for 2012

Goodbye to Dad’s old ethanol plant – Hello to the Bioeconomy and the new biorefinery, says BIO’s Brent Erickson, as 2012 gets underway.

By Brent Erickson
Executive Vice-President, BIO, Industrial and Environmental Section

Ethanol plants are nice, but let’s face it: they represent simple technology that is just the tip of what could be a huge economic engine – a biobased economy. At the Biotechnology Industry Organization (BIO) we have been preaching the gospel of the biobased economy for over a decade. I am gratified to see attention is now being paid to the effort by the White House and others.

This past September, President Obama announced that his Administration will develop a National Bioeconomy Blueprint to help harness research, development and rapid innovation in biotechnology to address grand challenges for future economic development. With the blueprint, the United States will join worldwide efforts to build the bioeconomy – the OECD, for instance, has long recognized the potential of industrial biotechnology to address energy security, climate change and sustainable economic growth.
This blueprint will be rolled out early in 2012.

The policy to support a biobased economy has traditionally been a nonpartisan issue and we hope that it will continue to receive bipartisan support.

The Bioeconomy and the bio-based economy

To be clear, the bioeconomy is the total economic activity from all sectors of the biotechnology industry – pharmaceuticals, food and agriculture and industrial biotechnology. With biotechnology we can help, heal, fuel and feed the world. The biobased economy is a subset of that. It encompasses using industrial biotechnology to convert renewable crop based feedstocks or waste to new renewable consumer products –biofuels to green plastic and renewable chemical products.

The hub of the biobased economy is of course the biorefinery – a dedicated facility for converting the sugars, oils and proteins from renewable biomass into multiple products such as biofuels, chemicals and materials such as plastics and polymers. The concept is modeled on the petroleum refinery, where petroleum is converted into fuels and chemicals that provide multiple product and revenue streams.

Just as a barrel of oil can be broken down into constituent parts that add up to more by volume and value than the original barrel, the objective of a biorefinery is to develop as many product and value streams as possible from biomass.

Upgrading the biorefining fleet

I like to think about the evolution of petroleum refineries and how long it took to develop today’s modern oil refineries that take crude oil at the facility gate and produce many, many products at the end of the process. The first simple oil refineries just distilled petroleum to produce kerosene. Then over decades technology was improved and the modern oil refinery was evolved.

We are at the beginning of a similar evolution in biorefining, but we can’t afford to wait decades for integrated biorefineries to be financed and scaled up. That is why supportive public policies are so important.

BIO’s member companies are using biotechnology to create new energy-efficient manufacturing processes and to convert renewable resources to high-value products, such as biofuels, renewable chemicals, and biobased materials. Most Americans do not realize it, but products made with industrial biotechnology are already in everyday use in their homes.

The bioeconomy represents a more far-reaching effort to generate the products that typify our current standard of living – most of which are currently made from oil – in a sustainable manner, from renewable resources.

The analogy of biorefineries and petroleum refineries is apt. In the past most industry players thought that the biobased economy must directly compete with the entrenched infrastructure of our current fossil fuel economy. That paradigm is starting to change as some forward-looking major oil companies and chemicals companies see the value of incorporating biotech innovation into existing business models and infrastructure.

The benefits of a shift

There are numerous challenges to reaching a scale comparable with fossil fuels – including die-hard opponents and critics of the effort. But the challenges are not insurmountable, as some early signs of success prove. The United States can leverage its leadership in biotechnology, agricultural productivity and manufacturing innovation to build the biobased economy and produce significant benefits to the overall U.S. economy.

Those benefits include new jobs, renewed economic growth, energy security and national security. Biorefineries can help revitalize traditional manufacturing, create new manufacturing opportunities, and generate high-quality jobs in manufacturing, agricultural production and forestry, transportation and distribution, and construction.

Growth of a biobased economy can strengthen the nation’s economic security by increasing domestic manufacturing and exports of affordable consumer products, improving the U.S. balance of trade. It can also enhance the country’s energy security by reducing dependence on foreign oil and flattening sharp rises and falls in the price of energy. And it could improve the nation’s health and environment through cleaner burning fuels and more efficient manufacturing that reduce emissions of a variety of pollutants, including greenhouse gases.

Policy Leadership Is Needed for Continued Progress

To continue progress in building the biobased economy, biotechnology companies need stable, long-term, forward-thinking policies. These policies must support not only biotech companies, but also product manufacturers in adopting new technology and agricultural growers and foresters in the sustainable production of biomass and deployment of biotechnology to improve productivity. One of the biggest challenges is to establish a robust infrastructure for the production, collection and processing of next generation feedstocks – such as cellulosic crop residues, dedicated energy crops and algae biomass. This must be built practically from scratch and it will require strong federal policies.

Building the bioeconomy will require policies to encourage the renewed flow of capital to finance construction of first-of-a-kind commercial biorefineries. Commercial lenders and industrial partners are looking for federal policies that reduce the risk of investing in new technologies and continued biotech research and development even as commercialization of products proceeds. And continued innovation and process improvements will be needed to expand the industrial biotech product portfolio, and federal policies have been very successful in supporting research and development.

We’re Hiring!

The bioeconomy will need a newly trained workforce, and both state and federal policies can help. Advanced biofuel production under the federal Renewable Fuel Standard (RFS) is expected to create more than 800,000 direct jobs in the United States by 2030.

There are already hundreds of biofuel biorefineries throughout the country to meet the RFS requirements, including over 50 existing and planned cellulosic biofuel development projects. Renewable chemicals projects are expected to create tens of thousands of additional high-quality jobs over the next decade. Workforce training in all of these areas will be critical.

Over the past six years, Congress and the Bush and Obama administrations have enacted federal policies that, if continued and expanded, can help the bioeconomy grow rapidly. A combined approach of renewing existing policies for a length of time that enables long-term business planning, extending them to the full range of manufacturing and production associated with the biobased economy, ensuring a neutral regulatory atmosphere and reduced market access barriers, and adopting new policies to recognize the continued evolution of the bioeconomy promises timely results.

We have made real progress over the past decade with the ethanol industry blazing the trail and the biotechnology industry spurring innovation. BIO urges the entire biofuels and bioenergy industry, along with agricultural and forestry industries, and any willing industry partners to support the creation of a biobased economy with words and actions.

The Tipping Point

We are at a tipping point for the creation of the biobased economy. In the future we won’t be worrying about new technology or project financing, we will be wondering where all the skilled workers will come from to help man the hundreds of biorefineries springing up around the country. That will be a good problem to have.