Knock on wood: why trade and brand will trump tech in the advanced bioeconomy

Adapted from remarks by Digest editor Jim Lane at the 2016 International Bioenergy Conference.

Knock Knock
Who’s there?
Noah.
Noah who?
Noah good low carbon technology?

Well, yes, you do. Lucky you. With all the uncertainty about the future of the world in the face of trade issues, immigration woes, energy and national security concerns, rising populations, food security problems, drought, climate change and more, you have the catbird seat. You have the knowledge of something that can address all of these.

When we want to avoid bad luck, we say “knock on wood”. Knock on wood indeed. You are people of the forest and the future is coming your way. Knock on wood.

Though you may not know it, the advanced bioeconomy is all around you and it is something very special and very important. There are the advanced fuels, chemicals and materials that many of us have heard much about, produced in labs and test facilities around the world and increasingly at commercial-scale facilities. And let us not overlook the powerful growth in nutrition applications.

Investment and the brand imperative

So if the advanced bioeconomy is so prevalent and so pervasive, why do we hear so much about the struggles of projects to be built? Why is it so much easier to build wind and solar projects than advanced bioeconomy projects?

Partly, it is because of how investors see the advanced bioeconomy, as a chaotic and dangerous rollercoaster of costs, prices and policy that almost never lands investments on the right side up.

Partly, it is because of how investors see “advanced anything”. Here’s how investors see the costs, prices and consumer fickleness relating to just about any new product.

You see, since time immemorial, projects have been funded by debt, and debt is not about hope, as Jeff Passmore tells us. Equity is about hope. Debt, he says, is about track record, and proven technology, and proven markets, and proven policies. Debt is about stability in a world that is increasingly unstable.