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It’s official: Biobased makes economic sense, as well

Article-It’s official: Biobased makes economic sense, as well

Two months ago, the United States Department of Agriculture (USDA) released a report containing some intriguing findings, to say the least. Entitled "An Economic Impact Analysis of the U.S. Biobased Products Industry," this report offered tangible evidence that biobased industries and products actually do have a substantial, positive effect on the economy.

The reduced environmental impact of biobased products has been often discussed, with the latest estimates now saying that the use of biobased products currently displaces about 300 million gallons of petroleum per year— equivalent to taking 200,000 cars off the road. The present report, however, studied the economic impact of these products —and this has been shown to be far from trivial. "This report is the first to examine and quantify the effect of the U.S. biobased products industry from an economics and jobs perspective. Before, we could only speculate at the incredible economic impact of the biobased products industry. Now, we know that in 2013 alone, America's biobased industry contributed four million jobs and $369 billion to our economy," said Agricultural Secretary Tom Vilsack when the report was released.

The USDA has pioneered the way in this development, with the Farm Bill that was first adopted in 2002 and reauthorized in 2014, the results of which are documented in the present report. That Bill, and in particular the preferential purchasing requirement it contained, has been highly successful in opening the marketplace to new biobased products and renewable chemicals.

Multiple industries have benefitted from biobased products that are used in industrial processes, ranging from food production to packaging and bottling. The USDA report found that the seven major overarching sectors that represent the U.S. biobased products industry's contribution to the U.S. economy are: agriculture and forestry, biorefining, biobased chemicals, enzymes, bioplastic bottles and packaging, forest products and textiles.

In addition, the report showed that for each job related to biobased products, 1.64 more jobs were created. In 2013, 1.5 million jobs directly supported the biobased product industry, resulting in 1.1 million indirect jobs in related industries, and another 1.4 million induced jobs produced from the purchase of goods and services generated by the direct and indirect jobs.

One really interesting thing about these new jobs is the fact that— in line with the purpose of the USDA’s BioPreferred Program—many of them are being created in rural areas, in areas which have seen a steady loss of jobs and people over the past years. As the USDA has stated, “By improving rural prosperity, increasing opportunities for agriculture, and expanding the bioeconomy, USDA is striving to create thriving communities where people want to live and raise families and where children have a bright future.”

And it’s not just in the US. A parallel trend is visible in the European Union, where some 52% of the area can be qualified as rural. These are regions where GDP per capita is only 70% of the EU average, where over the past decades farm numbers have declined and the population has left. Here, too, rural regeneration and job creation are seen as high priorities in strategies for biobased production and the bioeconomy, both of which are held to offer huge opportunities in these respects. The EU drafted its Bioeconomy Strategy and Action Plan under its Horizon 2020 program, complete with a budget for the bioeconomy of € 3.8 billion. By 2025, the aim for each euro invested in EU funded bioeconomy research and innovation is to trigger 10 euros of added value.

All in all, it makes for quite a change of perspective. It wasn’t all that long ago that the bioeconomy was regarded more or less as a fine idea for those who could afford to be environmentally correct and who had time for such esoteric pursuits. Yet, much has changed since then.  Briefly, apart from the fact that consumers have turned out to actually want sustainable products, the recession clearly showed that business as usual was not working. Changes were needed in the approach to—and the focus on— industry and manufacturing, and concepts such as efficiency, innovation, flexibility, automation and sustainability swam into view.

Today, there’s a whole new dynamic as, bolstered by the findings of reports like that of the USDA, it now seems possible that the bioeconomy can actually not only bring back jobs, but also create new ones, revitalize agricultural areas, boost economic competitiveness and provide a more sustainable path to the future. It’s really starting to happen.

I call that progress.


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