Report on macro-regions: Mapping of initiatives, structures, instruments and key challenges for EU's macro-regions. Deliverable 1.4 of the ShapingBio project

www.shapingbio.eu D1.4 Report on macro-regions Mapping of initiatives, structures, instruments and key challenges for EU’s macro-regions [Titel] Page 2 of 353 Project details Acronym ShapingBio Title Shaping the future bioeconomy across sectoral, governmental and geographical levels Grant Agreement Number 101060252 Call HORIZON-CL6-2021-GOVERNANCE-01 Project Coordinator Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e.V. Deliverable details Deliverable type Report Deliverable status Final Dissemination level Public Submission date February 2023 Work package 1 Deliverable leader ART BIOEAST HUB CZ Deliverable author(s) Overall report: George Sakellaris, Katharina Stonawska, Sven Wydra, Bärbel Hüsing Southern Macro Region: Maria Luisa Gomez Hernandez; Criss Monzon, Francesca Santaniello, Giulia Pietrollini [Titel] Page 3 of 353 Baltic Sea Region: Karolina Granja, Kersti Haugan CEE: Katarina Stonawska, George Sakellaris, Milena Garthley Western: Tanja Meyer, Stef Denayer, Noha Mahmoud, Gabriel Däßler Deliverable type Report Revision History Version Date Reviewer Modifications 1 30/11/2023 Sven Wydra, Bärbel Hüsing Modifications of MR Chapters 2 08/02/2024 Sven Wydra, Bärbel Hüsing Modifications of Approach, Conclusion, Executive Summary 3 14/01/2025 George Sakellaris, Sven Wydra This document is an updated version of D1.4, that includes a revision based on the evaluation committee remarks resulting from the mid-term review of the project. It contains a more detailed description of methodology, and explanation of the geographical scope as well as a more detailed overview of the economic situation of the member states Peer Reviews Name Organisation Sven Wydra Fraunhofer ISI [Titel] Page 4 of 353 Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Research Executive Agency. Neither the European Union nor the granting authority can be held responsible for them. [Titel] Page 5 of 353 Table of Contents Index of Tables ..................................................................................................................................................................... 9 Index of Figures .................................................................................................................................................................... 11 List of Abbreviations ........................................................................................................................................................ 17 Executive Summary ......................................................................................................................................................... 19 1 Introduction ....................................................................................................................................................................... 22 2 Approach ........................................................................................................................................................................... 24 3 Macro-Region Southern .......................................................................................................................................... 36 3.1 State of Play of the Bioeconomy in Southern Macro-Region ............................................... 36 3.1.1 Production and industrial use of biomass .................................................................................. 38 3.1.2 Industrial deployment of bioeconomy and economic relevance ........................... 42 3.1.3 Actors .................................................................................................................................................................... 52 3.1.4 Bioeconomy Policies in the Southern Macro-Region ....................................................... 56 3.2 Policy process and policy coordination in selected MR countries ................................. 64 3.2.1 Characterization of horizontal coordination between different ministries/departments ................................................................................................................................... 65 3.2.2 Role of stakeholder involvement in bioeconomy policy making ............................ 67 3.2.3 Dealing with goal conflicts ................................................................................................................. 68 3.3 Applied R&D and Technology Transfer ............................................................................................... 69 3.3.1 Policy Instruments for Applied R&D and Tech transfer in selected MR countries ........................................................................................................................................................................ 71 3.3.2. Structures and Challenges for Applied R&D and Tech transfer in selected MR countries ....................................................................................................................................................................... 74 3.4 Cross-sectoral Collaboration .................................................................................................................... 76 3.4.1 General overview of cross-sectoral collaboration ............................................................. 76 [Titel] Page 6 of 353 3.4.2 Policies supporting Cross-sectoral Collaboration in selected MR countries . 79 3.4.3 Mapping cross-sectoral collaborative structures ............................................................ 80 3.5 Financing ................................................................................................................................................................... 83 3.5.1 Policy Instruments for Financing in selected MR countries ........................................... 83 3.5.2 Company Financing ................................................................................................................................ 84 3.5.3 Impact of Policies for Financing in selected MR countries ........................................... 87 3.6 SWOT-Analysis of the Southern Macro-Region ........................................................................... 88 3.7 Conclusions for the Southern Macro-Region ................................................................................ 90 4 Macro-Region Baltic Sea ........................................................................................................................................ 91 4.1 State of Play of the Bioeconomy in the Baltic Sea Region ....................................................... 91 4.1.1 Production and industrial use of biomass ................................................................................................... 94 4.1.2 Industrial deployment of bioeconomy and economic relevance ......................... 103 4.1.3 Actors .................................................................................................................................................................. 118 4.1.4 Bioeconomy Policies in the Baltic Sea Macro-Region .................................................... 130 4.2 Policy process and policy coordination in Denmark .............................................................. 144 4.2.1 Characterization of horizontal coordination between different ministries/departments .................................................................................................................................. 144 4.2.2 Role of stakeholder involvement in bioeconomy policy making .......................... 147 4.2.3 Dealing with goal conflicts ................................................................................................................ 149 4.3 Applied R&D and Technology Transfer in Denmark................................................................. 150 4.3.1 Policy Instruments for Applied R&D and Tech transfer .................................................. 150 4.3.2 Structures and Challenges for Applied R&D and Tech Transfer ............................ 152 4.4 Cross-sectoral Collaboration in BSR and Denmark ................................................................ 156 4.4.1 General overview of cross-sectoral collaboration ........................................................... 156 4.4.2 Policy supporting cross-sectoral collaboration ................................................................ 159 4.4.3 Mapping cross-sectoral collaboration structures .......................................................... 160 4.5 Financing ................................................................................................................................................................ 162 [Titel] Page 7 of 353 4.5.1 Policy Instruments for Financing in Denmark ....................................................................... 162 4.5.2 Impact of Policies for Financing .................................................................................................... 163 4.5.3 Private financing in the Baltic Macro-Region ...................................................................... 163 4.6 SWOT Analysis of the Baltic Sea Macro-Region ......................................................................... 166 4.7 Conclusions for the Baltic Sea Macro-Region ............................................................................. 170 5 Macro-Region Central and Eastern ............................................................................................................. 173 5.1 State of Play of the Bioeconomy in the Central and Eastern Macro-Region .......... 173 5.1.1 Production and industrial use of biomass ................................................................................ 176 5.1.2 Industrial deployment of bioeconomy and economic relevance ......................... 182 5.1.3 Actors ................................................................................................................................................................. 192 5.1.4 Bioeconomy Policies in the Central and Eastern Macro-Region ............................ 201 5.2 Policy process and policy coordination in selected MR countries ............................... 208 5.2.1 Characterization of horizontal coordination between different ministries/departments .................................................................................................................................. 210 5.2.2 Role of stakeholder involvement in bioeconomy policy making ............................ 211 5.2.3 Dealing with goal conflicts .................................................................................................................. 211 5.3 Applied R&D and Technology Transfer ............................................................................................. 213 5.3.1 Policy Instruments for Applied R&D and Tech transfer in selected MR countries ..................................................................................................................................................................... 213 5.3.2. Structures and Challenges for Applied R&D and Tech transfer in the CEE MR and selected MR countries ...................................................................................................................................... 220 5.4 Cross-sectoral Collaboration .................................................................................................................. 231 5.4.1 General overview of cross-sectoral collaboration ........................................................... 231 5.4.2 Policies supporting Cross-sectoral Collaboration in Bulgaria ............................... 232 5.4.3 Policies supporting Cross-sectoral Collaboration in the Czech Republic .... 235 5.4.4 Mapping cross-sectoral collaborative structures .......................................................... 240 [Titel] Page 8 of 353 5.5 Financing ............................................................................................................................................................... 246 5.5.1 Policy Instruments for Financing in selected MR countries ....................................... 246 5.5.2 Company Financing ............................................................................................................................. 247 5.5.3 Enhancing Funding Accessibility for the Bioeconomy in selected MR countries .................................................................................................................................................................... 250 5.6 SWOT-Analysis of the CEE Macro-Region ....................................................................................... 251 5.7 Conclusions for the CEE Macro-Region ........................................................................................... 253 6 Macro-Region Western ........................................................................................................................................ 255 6.1 State of Play of the Bioeconomy in the Western Macro-Region..................................... 255 6.1.1 Production and industrial use of biomass............................................................................... 257 6.1.2 Industrial deployment of bioeconomy and economic relevance ........................ 262 6.1.3 Actors ................................................................................................................................................................ 270 6.1.4 Bioeconomy Policies in the Western Macro-Region ....................................................... 282 6.2 Policy process and policy coordination in selected MR countries ............................... 295 6.2.1 Characterization of horizontal coordination between different ministries/departments ................................................................................................................................. 296 6.2.2. Role of stakeholder involvement in bioeconomy policy making ......................... 301 6.2.3. Dealing with Goal Conflicts ............................................................................................................. 304 6.3 Applied R&D and Technology Transfer ............................................................................................306 6.3.1 Policy Instruments for Applied R&D and Tech transfer in selected MR countries ....................................................................................................................................................................306 6.3.2 Structures and Challenges for Applied R&D and Tech transfer in selected MR countries .................................................................................................................................................................... 307 6.4 Cross-sectoral Collaboration ................................................................................................................. 309 6.4.1 General overview of cross-sectoral collaboration .......................................................... 309 6.4.2 Policies supporting Cross-sectoral Collaboration in selected MR countries .311 6.4.3 Mapping cross-sectoral collaborative structures ........................................................... 312 [Titel] Page 9 of 353 6.5 Financing ................................................................................................................................................................ 315 6.5.1 Policy Instruments for Financing in selected MR countries ........................................ 315 6.5.2 Company financing ............................................................................................................................... 318 6.5.3 Impact of Policies for Financing in selected MR countries ........................................ 320 6.6 SWOT Analysis of the Western Macro-Region ............................................................................. 321 6.7 Conclusions for the Western Macro-Region ................................................................................ 324 7 Comparison of Macro-Regions ...................................................................................................................... 326 7.1 Policy ........................................................................................................................................................................... 327 7.1.1 Strategies and Governance ............................................................................................................... 327 7.1.2 Policy instruments .................................................................................................................................... 330 7.2 R&D, tech transfer, bioeconomy innovation, scale up ........................................................... 331 7.3 Industrial deployment and cross-sectoral collaboration .................................................. 333 7.4 Financing of industrial R&D&I activities and investment .................................................... 336 8 References ..................................................................................................................................................................... 338 Annex: Country Fiches ............................................................................................................................................... 350 Index of Tables Table 1 Mapping of selected goal conflicts in the bioeconomy ............................................... 31 Table 2 Area and inhabitants of southern macro-region ............................................................ 37 Table 3 Economic situation in southern macro-region ................................................................ 38 Table 4 Bioeconomy and circular economy policies in Southern MR ................................. 58 Table 5 Responsible entities of the bioeconomy policies in Southern MR ......................... 61 Table 6 Regional Strategies in Southern MR ........................................................................................... 63 Table 7 Examples of cross-sectorial collaboration projects ....................................................... 81 Table 8 SWOT Analysis of the Southern Region (Spain, Portugal, Malta, Italy, Greece, and Cyprus) ........................................................................................................................................................................ 88 Table 9 Area and inhabitants of the Baltic Sea Region .................................................................. 93 Table 10: Economic situation in the Baltic Sea Region .......................................................................... 93 [Titel] Page 16 of 353 Figure 89. Value Added in Western Europe (2020). ............................................................................. 268 Figure 90. Value Added per bioeconomy sector in Western Europe (2020). .................... 268 Figure 91. Value added created by bioeconomy sectors in Western Europe per country in 2020 (in million €). ........................................................................................................................................... 269 Figure 92. Value Added per bioeconomy sector in Western Europe (2008-2020). ..... 270 Figure 93. Type of reported financing rounds in Western macro-region. ........................... 318 Figure 94. Early stage funding rounds and amounts in Western MR. ...................................... 319 Figure 95. Total reported amount raised by country in Western macro-region. .......... 320 [Titel] Page 17 of 353 List of Abbreviations Abbreviation Full name APRE Agency for the Promotion of the European Research ART Agriculture Research Troubsko, Ltd BBEPP Bio Base Europe Pilot Plant CBE-JU Circular Bio-Based Europe Joint Undertaking CEE Central and Eastern Europe ESIF European structural and investment funds EU European Union FBCD Food & Bio Cluster Denmark Fraunhofer ISI Fraunhofer Institute for Systems and Innovation Research GDP Gross domestic product GDP Gross domestic product GERD Total expenditure on research and development ICT Information and communication technology NA Not available NGO Non-governmental organization NMPB The National Medicinal Plants Board R&D Research and development R&D&I Research, development and innovation SUBNET SUBMARINER Network TRL Technology Readiness Level TTE Tech Tour Europe TTG Tech Tour Global TTO Technology transfer office WP Work Package [Titel] Page 18 of 353 [Titel] Page 19 of 353 Executive Summary The ShapingBio project aims to support and accelerate bioeconomy innovation and the deployment of new knowledge in the EU and its member states. The project seeks to provide evidence-based information, guidelines and recommendations for better policy alignment and stakeholder actions to realize the cross-sectoral potential of the bioeconomy and to reduce the fragmentation across bio-based sectors, the food system and policies across regions, domains and governance levels. This Deliverable provides a mapping of the bioeconomy activities, structures, actors, policy strategies and instruments as well as challenges for selected topics for four EU macro-regions 1 covering total EU-27, based on stakeholders’ information needs that had been identified in the ShapingBio project. Moreover, for every Member state a Country Fiche with main strategies, collaborative structures and policy instruments is provided in the Appendix. Based on this mapping comparative insights across four macro regions are drawn. Overall, the mapping provides an initial overview. It forms the basis for selecting further analyses that will be made later in the project. These analyses will focus on solutions to EU bioeconomy challenges and good practice examples. The Deliverable shows that the bioeconomy landscape differs across the EU and the four macro-regions show specific profiles regarding type of biomass available, value chains and policy developments. Within the macro-region profile, macro-regions are to a certain extent heterogeneous on a country level. In many countries at least some relevant actors in the bioeconomy as well as key activities (e.g. cross-sectoral projects, relevant R&D funding programs, clusters, hubs and platforms) could be identified and the bioeconomy contributes significantly to value added and deployment in the different member states. The value chains and potentials differ between the macroregions, with a forestry/wood focus in Scandinavian countries instead of agricultural biomass, while there opportunities for valorising agricultural biomass, which are not yet fully exploited in CEE and southern MR countries. Strategic policy activities differ between member states in their maturity stage, but also in their approach. he mapping yielded a broad spectrum of approaches that EU member states pursued towards a national ioeconomy policy. Ten member states 1 The 4 macro-regions included in the report are: Baltic Sea macro-region (DK, EE, FI, LV,LT, SE), Western region (AT, BE, DE, FR, IRL, NL), Southern region ( ES; GR, IT, PT) and Central-Eastern region (BG, CZ, HR, HU, PL, RO, SK, SL) [Titel] Page 20 of 353 have a dedicated bioeconomy strategy, but differ in the point of time when such a strategy was developed (early to late adopters), whether the strategy is with/without action plan, differ in scope and sectoral foci. Those member states without a dedicated bioeconomy strategy, they either are in the process of developing strategies, or have dedicated policy initiatives, an action plan or a roadmap, or only address selected bioeconomy aspects in the context of other policy fields. While most advances in strategic policy development have been made in the Western macroregion, also countries in the Southern and Baltic Sea Region have made considerable progress. Cross-country strategic activities dedicated to the bioeconomy exist in the Baltic Sea Region and the CEE macro-region (EU strategy for Baltic Sea region; BIOEast Initiative) and strategic activities related to the bioeconomy in the Southern macroregion exist (e.g. Public-Private Partnership PRIMA). Policy coordination within the Member States is of crucial importance, because of the cross-sectoral character of the bioeconomy and its linkages to different policy fields. All countries with strategies have involved several ministries covering different domains such as environment and climate change, R&D&I, agriculture or economics. While the countries have established informal and formal networks level, still challenges for joint decision making and integrated bioeconomy policies remains. The actual practical implementation of bioeconomy strategies is of key importance for the transition to a bioeconomy. The implementation is, however, difficult to map as the countries differ whether they have action plans and what kind of instruments are implemented (e.g. dedicated to the bioeconomy or bioeconomy as part of horizontal programmes). Countries with strategic approaches to the bioeconomy seem to be more active in implementation. However, the measures implemented do not yet cover fully the high ambitions and goals that the bioeconomy strategies claim. Therefore, implementation of the bioeconomy strategies by appropriate policy mixes is an ongoing issue in many Member States. There are significant difference in bioeconomy innovation. The Western Region takes a leading role and acquires approximately 50% of the bioeconomy funding provided by Horizon Europe Cluster 6, or the CBE funding, respectively, participated in application of 75% of the EU bioeconomy-related patents and runs more than the half of the open access pilot plants in the EU. It has a robust, well-developed infrastructure of universities, research centres and industries, and active associations for bioeconomy research. While in the Southern and Baltic Sea region, some countries (e.g. Spain, Italy, Denmark, Finland, Sweden) also show significant innovation activities and are partly strong in raising EU funding, other Member States are more in follower [Titel] Page 21 of 353 stage with limited innovation capabilities and lack of R&D infrastructure and networks. Also the CEE countries face many challenges to innovations in the bioeconomy, although there some signs of improvement. The Western macro-region is also at the forefront with industrial activities, with e.g. significant shares of biorefineries and strong presence of industry and clusters. The Scandinavian countries show economically strong forestry and wood-based value chains with established industry actors, clusters, networks and significant contribution to value added in the bioeconomy. While the CEE countries have a high amount and quality of agricultural biomass, they often lack smart, value-adding, and sustainable value-chains to valorize this resource domestically. The Baltic Sea region bioeconomy is dominated by the forest industry and the products created by the forest as raw materials. Other important sectors are agriculture and food, biotechnology, chemicals, bioenergy industries as well as the overall blue bioeconomy as an emerging field. While the value-added. The Scandinavian countries (Denmark, Finland and Sweden) generate rather high value-added and show strong cross-sectoral collaboration especially related to wood, agriculture, food, and fisheries sectors, while in the Baltic countries bioeconomy is rather emerging. Therefore in the final cross-conclusion chapter specific topics that need further investigation are highlighted, comprising policy coordination, cross-sectoral collaboration, applied R&D and technology transfer, as well as financing issues in the bioeconomy. [Titel] Page 22 of 353 1 Introduction The current fossil-based economy has reached its limits and needs radical transformation towards new bioeconomy-based socio-economic model with more sustainable and circular use of resources. Over the last decade this transition process has become one of the EU’s core objectives. In 2018 the European Commission, updated its bioeconomy strategy and reaffirmed the five original goals: (i) ensure food and nutrition security, (ii) manage natural resources sustainably, (iii) reduce dependence on non-renewable, unsustainable resources, (iv) mitigate and adapt to climate change and (v) strengthen European competitiveness and create jobs. (European Commission, 2022). These objectives are in line with the targets of the EU Green Deal and become more relevant than ever before, following the Russian invasion of Ukraine and the need to speed up EU’s independence on energy and strengthening food security (European Commission, 2022). However, a need is seen to translate the high-level EU and national strategies to regional or even local activities, and to strengthen regional and local participation. But there is a very high heterogeneity between different macro-regions and sectors in the EU’s bioeconomy. The macro-regions (and countries within them) often share common potentials and fields of activities (e.g. use of similar primary resources and/or strengths in certain application sectors), in some relevant activities to coordinate and develop bioeconomy potentials are taking place already (for example BioEast Initiative and BalticSea region). Even though the urgency of the development of bioeconomy and its importance to the economy across all EU macro-regions has been recognized both on the EU and national level, different gaps and inequalities remain, ranging from, for instance, policy coordination and harmonization to the level of R&D activities, actor engagement and awareness and to having access to financing. Therefore further efforts are necessary to harmonize the bioeconomy scene across Europe and improve the performance of all the member states. Insights on these aspects in the four macroregions and comparative insights within them are further elaborated in the following chapters of the current report. It provides a mapping of an inventory of the bioeconomy activities, policy strategies and instruments and conditions for each macro-region, based on the prior identified information needs in the project. This report (Deliverable 1.4) complements the EU bioeconomy mapping (Deliverable 1.2) and will be accompanied by a more detailed analysis of specific topics (i.e. policy coordination, R&D transfer, collaboration and financing) in Work Package 2 of Shaping Bio. [Titel] Page 23 of 353 This report contains 4 sections with an identical outline for four Macro-Regions covering the EU-27. In section7 a cross-conclusion for all macro-regions is provided. In addition this Deliverable contains in the Annex country fact sheets, covering all the 27 member states of the EU. Those fiches summarize the main strategies, collaborative structures and policy instruments per member state. [Titel] Page 24 of 353 2 Approach In the following the thematic and geographical scope as well as the used sources are presented. Geographical scope In order to map and assess the diverse regions and sectors in the bioeconomy, we differentiate between macro-regions. This is also done for pragmatic reasons as it is evident that not all information can be collected for all 27 EU Member States. Hence, we select specific countries within a macro region for further assessment in the assumption that at least some results may be transferable to other countries within the same macro-region. The allocation of countries to macro-regions is not entirely straight-forward. The choice of the 4 macro-regions was primary based on geographical criteria. This relates to the bioeconomy characteristics that processes, sectors, value chains etc. are region-specific and must be considered holistically. Moreover, in some macro-regions relevant activities to coordinate and enhance activities in the bioeconomy already exist, such as the BioEast Initiative or the EU Strategy for the Baltic Sea Region. This focus on macro-regions enables us to specify key geographical issues related to the bioeconomy. However, we also examine country-level specifics, as far as possible, as macro-regions themselves are heterogeneous. Table 1a Macro-regions and countries Macro-Region Countries Central and Eastern Europe Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Slovenia, Slovakia Baltic Sea Region Estonia, Denmark, Finland, Latvia, Lithuania, Sweden Western Europe Austria, Belgium, France, Germany, Luxemburg, the Netherlands, Ireland [Titel] Page 25 of 353 Macro-Region Countries Southern Europe Cyprus, Greece, Italy, Malta, Portugal, Spain Selection Criteria for Geographical Scope Besides the classification based on the geographical position of the states, more criteria were taken in consideration. These criteria were including: The Economic Growth, the Political landscape and past, the level of awareness, and perceptions, the engagement of stakeholders, public attitudes, the decision-making mechanisms the level of technology and innovation advancement and the complexity of the regulatory frame. In the table below, we can see that despite the differences among the countries, the regions represent a certain homogeneity allowing a holistic consideration. Table 1b Regional characteristics Central & Eastern Europe Baltic Sea Region Western Europe Southern Europe Economic Growth Average, Still growing. Sometimes slow in specific regions High, basically due to Scandinavian countries High to very High Average, still growing. Sometimes slow in specific regions Political Landscape Common political past. Communist regime till 1990 Heterogenous between Scandinavian and Baltic countries Established democracy and democratic processes Established democracy and democratic processes Awareness, Perceptions & Pubic attitudes Low level of awareness and ambivalent perceptions (*) High level of awareness and positive perceptions (*) High level of awareness and positive perceptions (*) Average level of awareness and ambivalent perceptions (*) [Titel] Page 32 of 353 Although new emerging bioeconomy sectors pose a lot of potential for a sustainable future, also pitfalls of labour-market political implications must be considered by stakeholders. Particularly, this aspect relates the question how workers from traditional, fossil-based industries can be adequately integrated in these new green bioeconomy sectors without losing their overall labour perspective (Banse et al., 2020). Structural change is therefore one of the key goal conflicts the bioeconomy has to cope with. Furthermore, conflicting goals in this context can also emerge if new adopted bioeconomy strategies are not well suited for local, traditional bioeconomy regions and if bioeconomy pathways differ between actors and regions. It is therefore important to adopt a coherent and well suited framework for the bioeconomy, which take into account the several peculiarities of existing bioeconomy regions. New innovations in the bioeconomy opens up new technological opportunities to reach the high ambitious goals of the bioeconomy. One ambition to end hunger and to provide food security is linked to genetically modified plants, genome editing (e.g. plant breeding technologies). These techniques offer great potential to develop new crop varieties and help to overcome food insecurity (Lassoued et al., 2018). However, a major obstacle for the legal-adoption of these technologies in Europe are public concerns and overall missing social acceptance by consumers and civil society organizations (NGOs) that hinder the development of a legal framework. Currently the plans to modify regulations are a major topic of debate. Sources The following sources have been used • JRC-Data: Very recently, the Joint Research Centre for the European Commission has published or updated various databases or information collections for the bioeconomy covering bioeconomy supply and use, biorefineries, economic relevance as well as partly policy strategies and measures. This data is collected and presented on a macro-regional level. Here, the limitation arises that most available especially for the supply and use of biomass is 2017; moreover, comparable country level data on residues was not available at the time of data collection. • Literature and Desk Research: A wide range of documents, such as research articles, bioeconomy studies, but especially internet desk research to identify policy instruments and activities has been done. [Titel] Page 33 of 353 • Databases: For mapping of private financing and open-access pilot plants, additional analysis of databases has been performed (see Box 4 and 5 below) • Interviews: As in particular for policy coordination hardly written information is available, interviews have been performed with policy makers from the different countries. • Validation workshops: For each macro-region a dedicated online workshop has been performed at the end of the data collection phase, to validate the findings, especially in the sense that the conclusion that were partly drawn based on info for some countries are valid for the whole macro-region or not. At each workshop experts with different background and from different countries of the macro-region were present. Box 4: Private financing Private investments in the bio-based industry are limited, pushing companies in bioeconomy to rely on their own resources or seek equity from specialized investors or corporate partners as they grow in size and technological sophistication. While the European Union offers grants through specific bioeconomy programs like EIC, Eurostars, EIT, these grants are limited for companies, favouring those that are technologically advanced. As companies in the bioeconomy industry scale up their projects to more advanced development stages, they encounter a diminishing availability of grants due to the larger project sizes – also confirmed by the respondents in the ShapingBio D1.1 Stakeholder Needs Report (ShapingBio project, 2023). Additionally, the presence of public funding does not always attract sufficient private capital, primarily because sector-specific risks often exceed the risk absorption capacity of public funding instruments (EIB 2017). Mapping of the financing landscape in the EU is based on information on available sources of private investment (e.g., for specific types of companies (size), size of tickets, countries they invest in, etc.) by means of desk research focusing on diverse relevant sources. The data relates to investment in bioeconomy present status and to some extent future trends. A more detailed ShapingBio analysis on bioeconomy financing will be implemented in ShapingBio WP2 Analysis of mapped information and involvement of stakeholders. Here are presented only schematic findings to present the regional situation as a whole and for regional comparison purposes. ShapingBio used as starting point three main types of sources: [Titel] Page 34 of 353 • Online sharing data platform Dealroom.co (https://dealroom.co/) was used for the research as our main source of data on private investments in the EU. Dealroom is one of the most prominent data providers on start-ups, growth companies and tech ecosystems in Europe and around the globe. It obtains data from the world’s most active investors, entrepreneurs and government organisations and helps investors and tech companies connect and share data. • In brief, the Dealroom research included 3822 bioeconomy and biotech funding rounds in various stages of growth and respectively size in the EU and Norway from the beginning of 2021 till 13.04.2023. The investors are of EU and global origin and include private investors and EU schemes that may participate in a financing round in syndicate. That is why the research also includes Horizon Europe financing and its sub-programs like EIC, EIT, BBI-JU, as well as investments from EIB and other private but to some extent related to EU funding. The sectors researched were agriculture, including forestry; food and feed, and biofuels. It is based on reported data which may exclude some deals that have taken place but not reported, or deals that were reported but the investment amount was not disclosed. Such is the case with deals in Malta in the South Macro-region. The data presented here include deals that are approximately relevant to all TRL tiers, and it is worth noting that we compare the financing as a whole related to the maturity of the companies and the ecosystems. Box 5: Open-Access PilotPlants Innovators’ success hinges largely on their ability to effectively transition from lab to pilot and eventually full-scale production. However, the piloting phase demands substantial time and often entails significant investments in infrastructure. At the EU, national, regional, and local level, initiatives, structures and infrastructures have been established to support the development of innovations, their testing and demonstration, training of qualified staff, as well as investing in infrastructures. Nonetheless, these high investments still represent a significant barrier to accelerating bioeconomy growth and when it comes to the creation of new successful ventures. As a proxy indicator for the existence and diffusion of pilots plant, data from Pilots4U network is used. The Pilots4U network sets up a free online [Titel] Page 35 of 353 database that lists European pilot and demonstration infrastructures and their scale-up equipment for various bio-economy processes. This equipment is operated by several companies and institutes that work in an open access mode (shared facility). The Pilots4U database currently contains 500+ entries from 100+ organisations present in all EU countries. These entries are Open access pilot and demonstration infrastructures that allow industry to bring bio-economy innovations from the laboratory into industrial practice. They are open to all companies and research institutes and offer a wide range of innovative, state-of-the-art equipment and expertise. [Titel] Page 36 of 353 3 Macro-Region Southern Authors and Affiliations: 3.1 State of Play of the Bioeconomy in Southern Macro-Region The southern macro-region is composed of six countries: Spain, Portugal, Malta, Italy, Greece, and Cyprus. Figure 2. Countries of Southern macro-region. Source: mapchart.net (2023). [Titel] Page 37 of 353 The countries of the southern macro-region represent 25.12% of the total area of the EU-27. Spain is the second largest country in the EU; however, Cyprus and Malta are placed in the last positions compared to the rest of the countries. Regarding the number of inhabitants, the southern macro-region accounts for 28.81% of the total population of the EU-27. Italy and Spain are ranked at the top, only surpassed by Germany and France. However, Cyprus and Malta, despite its area, are placed in the last positions in terms of the number of inhabitants. Table 2 Area and inhabitants of southern macro-region Country Area (sq. km) Share of EU-27 Inhabitants (2022) Share of EU-27 Cyprus 9,213 0.22% 904,705 0.20% Greece 130,048 3.17% 10,459,782 2.34% Italy 297,825 7.26% 59,030,133 13.21% Malta 313 0.01% 520,971 0.12% Portugal 90,996 2.22% 10,352,042 2.32% Spain 502,654 12.25% 47,432,893 10.62% Total MR 1,031,049 25.12% 128,700,526 28.81% Total EU-27 4,103,987 100% 446,735,291 100% Source: Eurostat. The economic situation of the Southern Europe countries is challenging. In almost all coutries (with the exception of Malta and Cyprus whose economies are very small anyway, the National deficit is above 100%. At the same time Southern Europe has the the worse unemployment rate and balance of trade compared to the economies of all other regions. The GDP growth is also small with the exceptio of Spain and also Cyprus and Malta which have small economies anyway. The positive sign is that compared to previous years the Inflation rate tends to stabilize in about 2%. [Titel] Page 38 of 353 Table 3 Economic situation in southern macro-region DGP (b€) GDP Growth (%) Inflation Rate (%) Unemployme nt Rate (%) Balance of Trade (m€) National Depth (% of GDP) Cypru s 32 3.8 0.6 5.0 -787 70.5 Greec e 238 2.4 2.4 9.3 -3163 163.6 Italy 2255 0.4 1.3 6.1 5153 137.0 Malta 21 4.9 2.1 3.0 -301 46.7 Portug al 287 1.9 2.5 6.4 -2535 100.6 Spain 1581 3.4 2.4 11.2 -3291 105.3 Source: Eurostat. 3.1.1 Production and industrial use of biomass Primary Production In the primary sector (agriculture, fishing, and forestry), agriculture is the most important sector in the economy of the countries that make up the southern macroregion. According to data from the Food and Agriculture Organization (FAO) of 2020, in the countries belonging to southern Europe, there is an area of 21,665,334 hectares of arable land (FAO, 2020). However, as observed in Figure 3, there is a progressive decrease, more significant in recent years, in the cultivable land area. This situation is since poor agricultural practices can lead to land fertility loss. Also, the increasing population and the demand from other sectors put growing pressure on the available resources. [Titel] Page 39 of 353 Figure 3. Arable land (hectares) in Southern Europe (2020). Source: Food and Agriculture Organization (FAO). Figure 4. Biomass Production from Primary Production Systems in Southern Europe (2020 for agriculture, 2016 for fisheries and 2017 for forestry). Source: Datam JRC, European Commission. [Titel] Page 40 of 353 Figure 5. Biomass Production from Primary Production Systems in Southern Europe (2020 for agriculture, 2016 for fisheries and 2017 for forestry). Source: Datam JRC, European Commission. Figure 4 and Figure 5 refer to the Biomass Production from Primary Production Systems (agriculture, fishery, forestry). In the Southern MR, almost all the biomass comes from the agriculture sector. Currently, the countries in the southern macro-region are focusing on the blue bioeconomy since as countries like Portugal, Malta, or Cyprus basing their economies on the marine sector. Therefore, it is foreseeable that the percentage of biomass production from marine and aquaculture sources may increase in the coming years to certain extent. Use of Biomass In the southern macro-region, during 2017, a total of 182,431 tonnes of biomass (dry matter) from agricultural and woody sources were consumed to produce energy, materials, and food. This data represents 22.58% of the total biomass consumption in the EU-27. Clearly, the highest demand among the countries in the southern MR coincides with those that have a larger area and a higher population. In these countries, biomass is [Titel] Page 41 of 353 primarily used for food and feed production (76.6%), but there is also significant use for energy production (13.51%) and biomaterials (9.88%). Figure 6. Total biomass consumption in Southern Europe (2017). Source: Datam JRC, European Commission. Figure 7.Total biomass consumption in Southern Europe (2017). Source: Datam JRC, European Commission. Biomass Flows Figure 8 shows a summary of the latest biomass flow data for Southern Europe. 2 As previously indicated, the biomass supply comes from the agriculture, forestry and 2 Slight deviations to the figures above are possible, due to partly different reference years and additional attribution steps of data [Titel] Page 48 of 353 Figure 15. People employed per bioeconomy sector in Southern Europe (2008-2020). Source: Datam JRC, European Commission. Figure 16. People employed per bioeconomy sector and per country in Southern Europe (2020). Source: Datam JRC, European Commission. [Titel] Page 49 of 353 Figure 16 shows the number of employees’ per-sector in each country of the Southern macro-region. Obviously, the amount is proportional to the number of inhabitants of the country. However, it is noted that within the bioeconomy sector, in all of these countries the sector with the most employment is agriculture. Besides, the added value of biomass produced in Southern Europe it is EUR 183 million, higher than the European average. The sector with the highest added value of biomass is agriculture, followed by the food and beverage sector. Other relevant sectors include pharmaceuticals, plastics, and textiles. Figure 17. Value Added in Southern Europe (2020). Source: Datam JRC, European Commission. Figure 18. Value Added per bioeconomy sector in Southern Europe (million €) (2020). Source: Datam JRC, European Commission. [Titel] Page 50 of 353 According to data from last years (Figure 19), the value added data, while remaining almost constant, exhibit a brief upward trend thanks to the upward trend in the liquid biofuel and bio-based electricity sectors. However these sectors still represent a small percentage of the value added compared to sectors such as agriculture and food, beverage and tobacco. Figure 19. Value Added per bioeconomy sector in Southern Europe (million €) (20082020). Source: Datam JRC, European Commission. • After having closed 2020 with a 2.6% drop in the value of output, in 2021 the Bioeconomy recorded a rebound in output of 10.6%, spread across all sectors, fully recovering the lost ground and positioning itself at levels higher than prepandemic levels of around EUR 26 billion. After a first quarter of 2022 still characterized by a good development, the outbreak of the war in Ukraine made the scenario much more complex. Rising costs and difficulties in supplying inputs, especially energy but also agricultural inputs, will have a significant impact on some sectors of the Bioeconomy (agriculture, fishing, paper and paper products). • It is noted that within the bioeconomy sector, in all of these countries the first sector by relevance is agriculture followed by industry agri-food (food, drink and tobacco). This shows how the bioeconomy in Southern MR countries is [Titel] Page 51 of 353 more specialized in sectors that generate less added value (lower in agriculture than in the agri-food industry). • However, the evolution is worse than the European average. Since 2008 a significant drop in the added value generated by bioeconomic sectors is also observed. These data show that it is required a greater effort in these sectors to be able to reach the pace of European growth. Figure 20. Value added created by bioeconomy sectors in Southern Europe per country in 2020 (in million €). Source: Datam JRC, European Commission. [Titel] Page 52 of 353 Concretizing in the SR countries, Italy and Spain created the most value added in the Region. They are followed by Greece and Portugal and finally, by Cyprus and Malta. So, the value added is directly influenced by the country’s surface and the economic activity. Finally, in the selected countries the highlight sectors are agriculture followed by industry agri-food (food, drink and tobacco). 3.1.3 Actors The overall framework of actors involved in the bioeconomy implementation and application in the countries of the southern macro-region is quite homogenous. Although there are differences between the countries analysed, the bioeconomy key players belong to the major sector, the industrial one. 3.1.3.1 Academia, Research and Development There are several academic institutions (universities) or institutions well connected to the universities in Spain (e.g. BioEcouva), Italy (e.g. National Research Centre) but also in Greece (e.g. the iBO institute for Bio-economy and Agri-Technology) and Portugal (Interdisciplinary Centre of Marine and Environmental Research at the University of Porto (CIIMAR-UP)) that are relevant for research and development (R&D) in the field of bioeconomy. These institutions are known for their contributions to various aspects of the bioeconomy, including agriculture, biotechnology, environmental science, and more. Collaboration among these institutions, along with industry and government entities, plays a crucial role in driving innovation and technology transfer in the field of bioeconomy. Research in bioeconomy, especially in Spain and Italy, encompasses both basic and applied aspects, reflecting the multidisciplinary nature of this field. Bioeconomy focuses on the sustainable utilization of biological resources for the production of food, energy, materials, and other products, and this breadth is reflected in the research approach. Some of the notable academic institutions have active research in bioeconomy, but also R&I institutions with a dedicated area to the bioeconomy, some examples in Italy are the Department of Bioeconomy of CREA, The Council for Agricultural Research and Economics or the institute of Biology, Agriculture and Food Sciences Department CNR, the National Research Council of Italy. For instance, in Spain some examples are the CEDR (Renewable Energy Development Centre) and CDT (Centre for Technological and Industrial Development). [Titel] Page 53 of 353 Moreover, due to the strong commitment with the agro-food sector, it has been developed a common vision of which could be the knowledge and skills to improve the employment in the bioeconomy sector as macro-region. On that issue an interesting example of education model in bioeconomy promoted in this southern macro-region is the RELIEF Erasmus + project that involved Italy, Greece, Cyprus and Portugal that aims to develop and deliver an innovative approach for teaching bioeconomy in farming, by developing specific learning resources addressing HEIs (higher education institutions) students and farming practitioners. HEIs, VETs (vocational education and training), farmer consultants, research institutes, and social partners from Italy, Greece, Sweden, Cyprus and Portugal will deliver a highquality network within the EU to advance bioeconomy in the farming agenda. RELIEF will deliver a training needs analysis and develop two curricula in bioeconomy, for HE students, farming practitioners, and farmers to explore the key areas that are critical for the implementation of business models and strategies for bioeconomy in farming. 3.1.3.2 Industry Both in Italy and in Spain, as the main target of the current bioeconomy strategy is the agri-food sector in terms of economic and rural development, most of the actors involved in promoting the bioeconomy are linked to this sector. Of particular note are the local actors who, in full agreement with the policies issued by the European Commission, manage to activate networks and activities in this area. For instance, some private companies have conducted activities closely related to the agricultural sector, supporting innovation and knowledge. It can be confirmed the same situation for Greece. In spite of the lack of a strategy for the bioeconomy, the role of industry in bringing out possible directions of development and opportunities for innovation is definitely strong (Skordoulis et al. 2020). Moreover, the weight of industry is further amplified by the strong propensity to create cohesive clusters in all the countries of the macro-region such as CLUBE in Greece. On the industrial association/cluster’s issue there is not a common Southern macroregion actor besides EU institutions, but the main ones are limited to the country specific area. In Italy it needs to be mentioned as influential bioeconomy industry/business associations Federchimica, Assobiotec, also a founding member of EuropaBio, the [Titel] Page 54 of 353 European Association for Bioindustries, and of the ICBA, the International Council of Biotechnology Associations. Moreover, Italy, through Federchimica, it is a founding member of ALISEI (the Italian National Cluster of Life Sciences) and of SPRING (the Italian National Cluster of Green Chemistry). It is also an ongoing and active participant in the work of the Blue Growth cluster and of CLAN (the Italian National AgriFood Cluster). An optimized tool in this direction is the Italian Circular Economy Stakeholder Platform. In Spain the activity of clusters and association is aimed to push up the ambition of regional areas to national and European level. For example, the Spanish region of Navarra has a strong agri-food sector and competitive advantages on Biomass Processing, New Ingredients and Renewable Energy. For this reason, the AIN (Industrial Association of Navarra) endorses the regional government´s ambition of making Navarra the centre of the circular bioeconomy at national level (Spain). Moreover, there are also national centres such as the National Agrifood Technology Centre (CNTA) and the National Renewable Energy Centre (CENER) or AseBio (Spanish Bioiondustry Association), that promote industrial activity in the field of bioeconomy. Besides, “ The Biodiversity foundation” stands out for its role of dialogue with the private sector with the aim of promoting economic development that integrates biodiversity conservation. In Portugal, the BLUEBIO ALLIANCE (BBA) is an association founded in 2015, which represents a wide variety of players in the marine bioresources and blue biotech value chain, ranging from raw material producers, R&D units, biotech SMEs, transforming centres and manufacturers, public sector & governmental entities, support companies and final consumer product developers. BBA does not directly supply marine bioresources but seeks to support and enhance the value chain of the latter and identifies four key areas of actions. 3.1.3.3 Civil Society For civil society, bioeconomy issues are related to environmental protection and conservation activities. But, in the southern macro-region there is a lack of NGOs as the number of NGOs active in the bioeconomy area is really small especially for Cyprus and Malta. [Titel] Page 55 of 353 Several NGOs existing in the southern macro-region have a special focus on the bluebioeconomy. One example is Sea Shepherd Italy with mission on the hampering illegal fishing. “SDG4MED – Sustainable Development Goals for the Mediterranean” is an NGO observatory of sustainable development goals (SGDs) for the Mediterranean. It was established in early 2020 as a joint initiative of Fondazione CS MARE (Italy) and Fundacion Philippe Cousteau (Spain). It recently evolved into an Association and incorporated the managing staff and knowledge base of Fondazione CS MARE. As a result, its field of activities include maritime logistics, sustainable tourism at sea, shipbuilding, marine resources (fisheries, energy from the sea, biodiversity), agriculture and renewable energies, urban logistic and transport safety as well as digitalisation as a mean to achieve decarbonisation. Entirely financially supported by its members, its HQ are based in Catania (IT) and, as of as March 2020, it operates in Italy, Spain, Portugal in the macro-region analysed. Finally Greenpeace and Sea Sheperd’s have a relevant role as policy maker over the world in the defence of environment even if are not directly involved in bioeconomy issue. In Greece the majority of the NGOs are related to climate justice and green transition for instance, EKO Greece, has to be mentioned as the Entrepreneurship and Social Economy Group. EKO Greece is a Non-profit Organization seated in Athens, Greece, working in the field of youth empowerment, cultural integration and sustainable development. Also, Common Ground in Greece is an interesting reality as they build a community platform for the strategic cooperation to solve the issues related to green economy transition. For what concern Malta and Cyprus no relevant or active NGOs in the bioeconomy have been detected. In general, in the southern macro-region there is a lack of awareness of the possibilities offered by the bioeconomy in implementing current systems on the part of civil society as well as industry, perhaps due to a lack of knowledge of the specific issues to be implemented. Many times the related data shared with civil society is fragmented or misleading, causing a misunderstanding of the context and an inability to guide activities. In this sense, the role of NGOs is crucial in the dissemination and communication of both problems and solutions offered by the bioeconomy. There are some points linked [Titel] Page 56 of 353 to the education of citizens that still need to be implemented such as awareness of environmental challenges. 3.1.4 Bioeconomy Policies in the Southern Macro-Region For Greece, Malta and Cyprus, there is a general lack of policy documents in the MR for the bioeconomy. This is in stark contrast to Italy and Spain, but recently also to Portugal, where have been produced several references and sources on the bioeconomy policies (the national strategies itselves). However, Greece, Malta and Cyprus have Plans on Circular Economy. The bioeconomy strategies aims to boost economic activity and improve the competitiveness and sustainability of the productive sectors linked to use of biological-based resources. These strategies seek to promote the generation of knowledge and its use for the development and application of derived technologies, through collaboration within the science and technology system and both public and private entities. The national bioeconomy documents are focused on the production and use of biological resources and actions related to primary sector are seen as the most significant ones. The primary sectors (especially agriculture) and bioindustry (in particular the food industry) are included in all strategies analysed, while other such as energy are present in a large majority. In addition, most strategies include actions or measures specifically targeted at rural areas. Moreover, biorefineries are mentions in some of the strategies but it is not a priority issue. A few countries emphasize additional specific strengths; for example, the Italian Bioeconomy strategy focuses on the valorization of secondary raw materials on a local basis with the involvement of all players in the supply chain to overcome current criticalities and design a more sustainable future (Fava et al.2021). Italy today boasts leadership in the field of the Circular Bioeconomy, which has been achieved through the integration of green chemistry and agriculture, with the construction of an integrated supply chain for bioplastics and biochemicals. This platform can boast world-first technologies capable of accelerating the ecological transition by replacing chemistry that is less and less economically and environmentally sustainable. In Spain, agriculture and forestry are the most significant bioeconomy industries. The revaluation of agri-food industry derivatives allows the development of another economic sector. Using them as raw material and through biological, physical, chemical, or thermochemical processes, it could be produced various biomaterials [Titel] Page 57 of 353 (bioplastics, lubricants, etc.) as well as bioenergy (advanced biofuels or other energy uses of biomass). In addition to bioenergy, other sectors such as chemicals, pharmaceuticals and other materials of biological origin are gaining importance. (Esteban & Sanz, 2021). Moreover, Spain and Italy have elaborated Bioeconomy Action Plans, based on the strategy, but current implementation appears to be limited. Besides Portugal, Greece, Malta, and Cyprus have a high coastline surface so these countries give great importance to the marine sector. Therefore, Portugal is focusing on the implementation of the blue economy. By the end of 2020, EUR 23.9 million of EMFF (European Maritime Fisheries and Aquaculture Fund) support was committed to 114 operations related to the blue bioeconomy which were financed under shared management. In Portugal were oriented to producing essential oils from marine plants. Policy Instruments Several policy instruments focus on primary production sectors (agriculture, forestry, aquaculture) and consist of subsidies for the promotion of forestry bioeconomy or innovative projects in the agri-food and forestry sector. This in in line with key responsibilities and focal points of the national bioeconomy strategy in Spain, where the Spanish Ministry for Agriculture, Food and the Environment has the leading role for the bioeconomy in Spain and prioritizes food and primary production, encompassing agriculture, forestry, and fishery. On the other side, the national focal point include also policies on chemistry and bioenergy 3 . A national lighthouse example is the National Food and Agriculture and Forestry Innovation and Research Programme that has been set up by the Spanish government in 2015. This inititative was co-funded by the Spanish government and Horizon 2020. Moreover, with the Support Plan for Entrepreneurship in Local Bioeconomy in Depopulated Areas, the Spanish government, which primarily focus on bioeconomy development in rural areas between 2023 and 2026. Also on the Spanish regions different policy instruments have been established. Regions, such as Castilla y Leon or Andalucia have robust bioeconomy programs, including instruments like grants for research projects, services for knowledge transfer to SMEs or investment support schemes for entrepreneurs. As outlined in the national Italian bioeconomy strategy it is necessary to improve the integration of funding programmes in a common strategic framework, taking into account financial mechanisms to ensure prolonged stability of bio-investments 4 . Therefore, the Italian strategy outlines the 3 https://biooekonomie.de/themen/laenderdossiers-weltweit/spanien 4 https://cnbbsv.palazzochigi.it/media/1768/bit1_en.pdf [Titel] Page 64 of 353 Table 6 Regional Strategies in Southern MR Country Region Strategy Goals Spain Castilla-Leon Competitiveness Innovative territory Free of carbon emissions Regenerative model Efficient use of natural resources Spain Andalucia Economic growth Sustainable exploitation of resources Promotion of renewable energies Production of new value-added products Spain Catalonia Economic growth Sustainable development Promotion of biological resources Promotion of renewable processes Portugal North Region Agri-food sector Portugal Lisbon and Tagus Valley Sector Preservation of local biodiversity and natural resources Responsible production and consumption Reducing the extraction of material and energy resources Life cycle of products Portugal Alentejo Access to funding resources Competitiveness Sustainable and cohesive development Italy Puglia Primary production (agriculture) Circular Economy Innovation Waste management Italy Veneto Sustainable agriculture Energetic efficiency New materials Bioenergy [Titel] Page 65 of 353 Source: Own compilation based on regional strategies. Regarding policy instruments, some grants are available for bioeconomy related projects, but there is a disparity of financial support depending on the geographical size of the country or population density as the main factors. In addition, EU grants is the mainly financial resource for cross-sectoral collaborative projects among EU countries. An example of a policy instruments to develop bioeconomy action is the “Support Plan for Entrepreneurship in Local Bioeconomy in Depopulated Areas” between 2023 and 2026 in Spain. Besides, Spanish regions like Castilla y León or Andalucia have a robust Bioeconomy program that includes featuring instruments such as grants for research projects, the provision of services related to knowledge transfer to SMEs looking to carry out pilot projects or obtain prototypes that involve research valorisation or transfer of results. Additionally, there are investment support schemes for entrepreneurs, as well as accelerators or financial launchpads serving as platforms for project funding. Something similar happens in other Spanish regions. In Greece an incentives law has been established that includes incentives and aid to SMEs to promote the green economy and digital transitions. However, Portugal gives fiscal incentives for foreign investors to invest in the national blue bioeconomy. Moreover, there are also incentives for promoting circular economy processes in SMEs. 3.2 Policy process and policy coordination in selected MR countries This section will address the political coordination and participation of different stakeholders in the development and coordination of bioeconomy strategies in the countries of the southern macro-region. As already highlighted in the analysed several countries in the macro-region still have not a dedicated policy for the bioeconomy. However, the main challenge to implement the bioeconomy development process and coordination among the countries can be addressed to the overall macro-region. This concern, ensure coordination by a dedicated body to identify and mitigate divergences between sectoral priorities and policies, including external and internal policies, and promote mutually supportive actions across policy and institutional sectors. In this sense, the Spanish stakeholders interviewed agree that the elaboration of the Spanish bioeconomy plan was carried out in a coordinated manner with several stakeholders from different areas and sectors related to the bioeconomy. However, its implementation is not progressing as planned due to a lack of interest and proactivity [Titel] Page 66 of 353 among stakeholders, as well as the bad coordination among the institutions responsible for strategy development. In 2016, for the development of the bioeconomy strategy launched by the Ministry of Economy, there was good coordination among various ministries, institutes, technological centres, and private companies. However, in 2018, there was a change of Government, and the Bioeconomy Plan became the responsibility of the Ministry of Science, for which the plan is not a priority, causing its development to stagnate. Nevertheless, in response to this situation, some Spanish regions have decided to implement their own Bioeconomy plans. However, their development is carried out individually in each region without considering the actions of the rest of the country. In this term, an example of good practice is Italy, because it has demonstrated that integrate decision-making processes are valuable. In 2016, the Italian Bioeconomy Strategy was prepared though a wide stakeholder consultation. Two years later, the Presidency of Council of Ministers asked for an update, so different Ministries and other institutions (see Table 5) have worked in a coordinated way to improve this strategy (Bieconomy in Italy (BIT II)). 3.2.1 Characterization of horizontal coordination between different ministries/departments In the countries of the southern macro-region, there is no single organization responsible for the development and implementation of bioeconomy measures. Therefore, cooperation and coordinated efforts among different actors are essential. Ministries and public institutes selected to participate in related matters play a significant role in the country’s bioeconomy. In fact, the Ministry of Economy and the Ministry responsible for the primary sector stand out in each country. Both in Italy and Spain, previously to the development of the National Bioeconomy Strategy, the government initiates a process to form a working group composed of ministries, national innovation institutes, and public administrations closely involved in bioeconomy-related tasks. Subsequently, a coordinating ministry is determined, which is supported by other ministries and agencies. The group responsible of developing the National Strategy is complemented by the participation of experts from the public and private sectors, primarily related to the primary sector and R&D tasks. The goal is to integrate their opinions and interests. For instance, in Spain, the information was obtained from 240 stakeholders form different regions and sectors. After that the document was writen by the commission [Titel] Page 67 of 353 headed by the National Institute for Agricultural and Food Research and Technology (INIA). In Italy and Spain, different regions of the country use this national strategy as a framework to develop their own contextualized plans: more specific to the needs of each region with designed initiatives. Some regions directly reference the national legislation. To ensure the proper development of the national strategy and to improve the social, political, and administrative environment of the bioeconomy, support, promotion, and cooperation structures were organized. This applies to both central and regional administrations and their relationships with various stakeholders in science, economics, and society as a whole. The main objectives are 7 : 1. Establishment of a Monitoring Group for the Strategy with representation from Ministries and regions: its goal is to monitor the strategy, coordinate the implementation of new measures in this field, and promote cooperation among different administrations. For instance, the Italian Strategy has been updated by a group integrated by the Ministry for Economic Development, Ministry of Agriculture, Food, Forestry and Tourism, Ministry of Education, University and Research, Ministry of the Environment, Land and Sea, XI Committee of Italian Regions and Autonomous Provinces and the Italian Technology Clusters for Green Chemistry SPRING, Agri-Food CLAN and Bluegrowth BIG. 2. Proposing new measures and actions to improve the bioeconomy system. 3. Implementing and coordinating international initiatives to boost the bioeconomy in Mediterranean basin. An example is the initiative Blue Bio Med. It forms a group of 13 European countries on the northern shore of the Mediterranean, working together for sustainable growth in the region with a focus on the blue bioeconomy. 4. Guaranteeing the policy coordination among public authorities, with particular attention to the implementation of European policies addressed to waste prevention and minimization, in order to encourage full exploitation of the resources and circularity. 5. Technological Networks Group responsible for continuous market analysis and identifying potential opportunities for bioeconomy and public-private collaboration for innovation. 7 Information from Spanish Bioeconomy Strategy, Italian Bioeconomy Strategy and interviewee. [Titel] Page 68 of 353 Unfortunately, horizontal coordination among Ministries and political departments results in the blurring of responsibilities and tasks of each one in the development of the bioeconomy strategy. As a consequence, even if the document is coherent, the expected measures and objectives are not put into practice, and therefore, the progress of the bioeconomy remains blocked. 3.2.2 Role of stakeholder involvement in bioeconomy policy making In order to encompass the interests of all stakeholders involved in the country’s bioeconomy, the working groups responsible for drafting and developing the Bioeconomy Plans of Italy and Spain respectively promotes the integration of experts from both the public and private spheres. The participants were: • In Italy: Presidency of Council of Ministers, Ministry of Education, University and Research, Ministry for the Economical Development, Ministry of Agriculture, Food and Forestry, Ministry of the Environment, Committee of Italian Regions, Agency for territorial cohesion, Italian Technology Clusters for Green Chemistry and Italian Technology Cluster for AgriFood. • In Spain: Ministries of Economy and Agriculture, Food and Environment; State Secretary for Research, Development and Innovation (SEIDI) and dependent entities (INIA, CDTI, CIEMAT, CSIC); Industry associations such FIAB, AseBio, CEOE; Institutes such a IDAE and other societies such a SEBiot. Moreover, public consultations were held in both countries. Proposals were received from various actors and different regions of the country: companies and organizations representing agricultural, forestry, fisheries, food, chemical, and energy sectors, consumer organizations, unions, and NGOs related to the objectives, opportunities, and challenges of the bioeconomy. The establishment of clusters and interest groups among companies, cooperatives, communities, and research groups in specific areas aims to promote multidisciplinary collaboration in the search for innovative solutions, as well as the contribution and collection of suggestions from any citizen for evaluation and, if appropriate, incorporation into the system. Within the public realm, consideration is given to businesses and institutes of research and innovation, agriculture and environment, and industry. On the other hand, in the private sphere, participation is ensured from a [Titel] Page 69 of 353 representative of the food industry and the business sector, as well as representatives from technological platforms and associations. The participation of several stakeholders involved in the bioeconomy has ensured that the interests of both the public and private spheres have been taken into account in the development of the strategy. This factor was necessary to achieve stability in the sector that would not be threatened by changes in government or legislature. However, in reality, it seems that the bioeconomy strategy have remained more in theory than in practice. A good proposal to follow up the bioeconomy strategy and to ensure that the different actors express their interests and influence policies is the one proposed by Spain. When the strategy was published in 2016, a group known as the ”Spanish Bioeconomy Observatory” was created to brought together representatives of the Ministries involved and the regions. At the same time, a social dialogue programme was designed around the bioeconomy in which representatives of productive sectors, business groups, research groups, consumers, trade unions, NGOs and other stakeholders could expressed their views and proposals. Unfortunately, this initiative was only carried out for a short time and is currently stalled, as is the implementation of the bioeconomy strategy. An example of good practice is the fact that some regions have their own bioeconomy strategy, based on the national one but adapted to each context. This fact facilitates the implementation of actions more effectively. 3.2.3 Dealing with goal conflicts Despite the high potential Southern Europe is showing for the bio-based economy, the region is also confronted with many challenges. As Southern Europe has shown strong population growth and urbanization in the last century, these trends needs to be taking into account by stakeholders who shape the bioeconomy in these countries. Further challenges the region shows are scarcity of natural resources, changing consumption patterns or weak competitiveness. Key natural resources that are necessary for new emerging bio-based sectors, such as water resources are limited and unevenly distributed between regions (Martinez de Arano et al., 2018). All of these challenges might create conflicts of goals, as the perception how to cope with these challenges varies among stakeholders, regions and countries (Martinez de Arano et al., 2018). The discussion about conflicting goals in the Southern macro-region remains limited as less countries are explicitly addressing them in their strategies. For instance, the Italian bioeconomy strategy is outlining the multiple benefits the bioeconomy could [Titel] Page 70 of 353 provide for agricultural land. Although it is highlighting the importance of the agricultural sector for rural development, it is not addressing the huge urban-rural inequalities, which can emerge through the bio-based transformation of rural areas. However, competition of energy and food from agricultural products on regional level exist (Gissi et al., 2011). Besides the numerous benefits the bioeconomy can offer, negative implications or environmental and/or social conflicts have not been at the focus. According to experts, conflicts exist, however, on the development of rural areas, poorly forestry exploitation or abandonment of lands (ShapingBio, 2022). Another interesting observation is that in Spain the media coverage is very limited regarding bio-based sectors, such as forest bioeconomy. The media seems to have little interest in forest resources as a potential solution for sustainable energy production (Sanz-Hernández, 2020). This lack of interest can be seen as a sign that bioeconomy in the public is not very much debated and therefore conflicting issues certainly not really communicated. However, some associations and lobbying organizations warned about mismanagement of forests and the need for reforms in the forest sector with public participation (Sanz-Hernández, 2020). Negative media perceptions on the bioeconomy remain therefore scarce. It can be also stated that the private sector and civil society organizations (NGOs) are not really participating in the public discourse about the bioeconomy. Moreover, as chapter 3.1.3.3 on civil society have shown, less civil society organizations (NGOs) exist, which could question and criticize existing strategies for not addressing these goal conflicts. And the existing are very much focused on blue bioeconomy in the Mediterranean and seem not to be addressing bioeconomy and related goal conflicts. 3.3 Applied R&D and Technology Transfer In the context of the bioeconomy, technology transfer is particularly relevant and currently in the southern macro-region is promoted and support mainly by Spain and Italy. Spain and Italy have a range of institutions, organizations, and programs that promote the transfer of knowledge and technologies in this field. In the field of Research there are many universities and research centres that are involved in studies related to the bioeconomy, developing technologies and knowledge that can subsequently be transferred to industry and other sectors. For example, BioEcouva in Spain is the Bioeconomy Research Institute of the University of [Titel] Page 71 of 353 Valladolid and it has different research lines based on bioeconomy. In Greece stand out IBO (Institute for Bio-economy and Agri-Technology) which is focused on the scientific field of agri-technology and sustainability assessment of bio-production activities. But companies and industry play a crucial role in technology transfer, as they are the main beneficiaries of the application of new knowledge and technologies in the production and marketing of bioeconomic products. There are technological platforms which encourage technology transfer and collaboration among different stakeholders in the sector, including businesses, research centres and public administration. An example from Italy is SPRING, a national platform which brings together over 100 of the main stakeholders of the value chain in bio-based chemistry, from farmers to entrepreneurial associations. In Spain, The National Centre for Technology and Food Security (CNTA) is a private non-profit association whose purpose is to contribute to improving the competitiveness and quality of the food sector. It has been noted that technology transfer is driven primarily by collaborative projects, both at national and European level, between different actors in the value chain. In fact, Spain and Italy participate in international projects and collaborations in the field of bioeconomy, which can also contribute to technology transfer on a global level. Funding for these projects comes mainly from the European Union, but there are national entities such as the Centre for Technological and Industrial Development (CDTI) in Spain or Rete Nazionale Acceleratori and other governmental organizations providing funding and support programmes for bioeconomy research and development projects, facilitating technology transfer. In summary, in Italy and Spain technology transfer in the bioeconomy is moving forward, with diverse actors and mechanisms involved in the dissemination and application of knowledge and technologies related to the sustainable use of biological resources but there are still several challenges for both countries for the implementation and for the transition to bioeconomy systems. For example, the majority of these platforms are private non-profit, so it is missing the participation of institutions. In the other countries of the southern macro-region the frame is different because technology transfer and applied R&D are still an area to be defined. In Greece, faculties dedicated to the bioeconomy have been springing up only in recent years, while in Cyprus and Malta, bioeconomy-related topics are dealt with [Titel] Page 72 of 353 marginally within other degree courses mainly dedicated to agriculture and biotechnology. 3.3.1 Policy Instruments for Applied R&D and Tech transfer in selected MR countries In all Southern MR countries there are initiatives to implement Technology Transfer and R&D. These initiatives are focused on solving the poor translation of knowledge generated in research organizations into the productive fabric. The following map (fig.18) of Europe shows how R&D investment increased above the European average in Portugal, Spain, Cyprus, and Malta between 2020 and 2021. In addition, Greece and Italy also show an increase in investment. Figure 21. Evolution of R&D investment in Europe (2020-2021). Source: COTEC Foundation. In Spain, the INNVIERTE funding program promoted by CDTI stands out. It is framed in the Spanish Science, Technology and Innovation Strategy 2021-2027 because is an initiative whose aim is to promote business innovation by supporting venture capital investment in technology-based or innovative companies. In its first programme, more than EUR 390 million was committed to 20 investment vehicles that have invested in more than 240 companies. Portugal’s Agency for competitiveness and innovation (IAPMEI) promotes a wide range of programmes, initiatives and services focus on supporting entrepreneurship, on boosting business innovation and innovation management and promote and on monitoring dynamics of collective efficiency, in particular clusters, collaboration [Titel] Page 73 of 353 networks and technology transfer. In the field of bioeconomy, the Energy Challenge program stands out, which finances start-ups with innovative projects in the energy sector that help solve existing challenges. In addition, in Spain, Italy, Portugal and Greece tax exemptions are also chosen as a financial tool to enhance the private participation of companies in the implementation of Research and Development projects and/or Investment Plans. For example, there are tax deductions to R&D activities, or, in Greece, the Angel Investor is entitled to an income tax deduction equal to 50% of the capital contributed to eligible start-ups. Moreover, in order to promote advances in scientific research at the University, it is essential to promote technology transfer centres and incubators. Technology Platforms are “strategic projects on issues of regional or supra-regional” that fall in a specific area of technological innovation and have the objective of promoting a coordinated and organic set of industrial research and experimental development put in place by different subjects - companies, institutions, universities – and aimed at the pursuit of industrial objectives of short to medium term. Some relevant technology platforms are: the EATIP (European Aquaculture Technology and Innovation Platform), or at regional level the Bioeconomy Technological Platform developed by Piemonte in Italy or BIOVEGEN (Green biotechnology technology platform) or BIOPLAT that includes all the agents involved in the Bioeconomy in Spain. In Italy, one of the most operational and efficient accelerators is the offer of Consorzio Italbiotec, which forms a cutting-edge start-up innovation ecosystems, companies, universities in biotechnology were cooperation and knowledge exchange trigger growth and sustainable innovation. In addition, there is another interesting accelerator managed by CDP, “Rete Nazionale Acceleratori” (National Network of Accelerators). It is an accelerator called Terra Next that incubates and launches innovative start-ups and SMEs that offer solutions in the sectors of Bioeconomy with attention to the segments of Nutraceuticals, Circulars and Biomaterials and Regenerative Agriculture. Another best practice in Italy is the Science Park Area of the main initiative in technology transfer and applied R&D for the development of the blue bioeconomy. It is the national public research organization responsible for managing the campuses of the Science Park Area - the main multi-sectoral Science and Technology Park - in Italy. It continues its mission to contribute to the development of the business sector through innovation and technological research. They are now part of a coherent territorial model called the “OIS - Open Innovation System”, which aims to create a permanent open territorial innovation system that connects all actors and stakeholders operating in a territory. Given its geographical [Titel] Page 80 of 353 • Skills and Knowledge Sharing. Collaboration allows for the exchange of skills, knowledge, and expertise among sectors, enhancing the collective understanding of bioeconomic challenges and potential solutions. • Economic Growth. Bioeconomy has the potential to create economic opportunities and new markets. Cross-sectoral collaboration aims to capitalize on these opportunities by connecting various industries and driving economic growth. However, there are several barriers that hinder the promotion of intersectoral collaboration. The most relevant ones are: • Each sector has its own culture, goals, and ways of working. • Competition for resources, such as funding, skilled personnel, and time, can create conflicts and impede cooperation. • Lack of clear agreements on intellectual property ownership of outcomes. • Incentives for collaboration can differ across sectors. Some sectors might be more profit-oriented, while others focus on scientific or social objectives. • Intersectoral collaboration might require additional time and resources. The lack of these resources can limit stakeholders’ ability to participate effectively. • The absence of pre-existing connections and networks between sectors can hinder the establishment of collaborative relationships. Specifically, in the agricultural sector, difficulties primarily arise from resistance to change among farmers, as well as the need for investment. The utilization of agricultural waste and by-products requires suitable infrastructure and management systems that are not yet in place. On the other hand, regarding biorefineries, investments in these facilities are costly and economic viability is not guaranteed, as it depends on biomass prices and market demand. 3.4.2 Policies supporting Cross-sectoral Collaboration in selected MR countries To overcome these barriers, a holistic approach involving various stakeholders, such as governments, industries, research, and society at large, is required. Specific policies, regulations, and strategies can play a fundamental role in addressing barriers and promoting the sustainable development of the bioeconomy in these sectors. [Titel] Page 81 of 353 In the southern macro-region, various instruments of policy and financing have been implemented to enhance intersectoral collaboration in bioeconomy projects. Some of these instruments include: • State R&D programs • Technological platforms for public-private collaboration • Tax incentives and financial support for innovation and technological development projects involving intersectoral collaboration. • European programs for international cooperation. However, these instruments are not specific to the bioeconomy but are intended for projects in different sectors such as agriculture, marine or forestry. The actions resulting from some of these intersectoral projects are those related to the bioeconomy. 3.4.3 Mapping cross-sectoral collaborative structures The projects have been selected for three reasons: • Promotion of a bioeconomic model • Biodiversity conservation • Valorization of waste. Biomass generation and conversion. The different actors play a role within the project that facilitates data exchange and the utilization of technologies to achieve the set objectives. However, during the project development, participants encounter various challenges in line with what is outlined in section 3.4.2. [Titel] Page 82 of 353 Table 7 Examples of cross-sectorial collaboration projects Name Objectives/Roles Sectors Actors Type Countries LINK BIOSOST Promote the exploitation of R&D activities in the field of biotechnology, renewable energy, and water biotechnolo gy, renewable energy, and water Technological centre Project National (Spain) BIOSOST ALGARED+ Promote sustainable aquaculture of marine microorganisms for the production of bioproducts, such as food, cosmetics and pharmaceuticals Marine Food Cosmetics Pharmaceut ical Universities, technology centres and research institutes Project European (Spain and Portugal) ALGARED+ LUCRA This project will use the EU’s abundant and underutilised organic municipal solid waste and wood waste to produce bio-based succinic acid, a chemical for which is significant demand in industry Forestry Chemical Universities Research Centres SMEs Project European (Greece, Spain and Italy) LUCRA Agro2circul ar Extract products that could be used in the production of novel foods, Agri-food Research centres Public institutions Clusters Project European (Spain and Italy) Agro2Circul ar [Titel] Page 83 of 353 cosmetics, and nutraceuticals. Technological centre Universities SMEs BIOVALOR More resilient forests and valorising bioproducts and by-products from native species Agri-food Associations Research centres Project National (Spain) BIOVALOR BIOrescue Develop biorefinery concepts for the valorization of agricultural residues, with a focus on fruit and vegetable waste. Biorefinery Agro SMEs National and international associations Universities Research centres Project European (Spain, Italy, Ireland, UK, Belgium, Finland, Germany) Biorescue BIOWAYS This project aims to raise awareness and promote public understanding of bioeconomy by showcasing successful bioeconomy stories. Forestry Biorefinery Agro Bioenergy SMEs Universities Technological centres Clusters Project European (Greece, Portugal, Italy, United Kingdom, Slovakia, Spain and Estonia.) Bioways BIOWASTE This project focuses on the sustainable management of biowaste, exploring methods for its conversion into value-added products such as bioplastics and bioenergy. Bioplastic Bioenergy SMEs Universities Technological centres Clusters Project European (UK, Finland, Germany, Italy, The Netherlands) BIOWASTE BIOREFINA A project that aims to develop a sustainable Agro-food SMEs Project National (Spain) Biorefina [Titel] Page 84 of 353 biorefinery model for valorization of forestry residues and agricultural waste. BLUEMED Promote research in marine ecosystems Develop new technologies related to the sea Biodiversity conservation Marine Research centres Public institutions Clusters Initiative Internationa l (related with Mediterran ean see): Cyprus, Croatia, France, Greece, Italy, Malta, Portugal, Slovenia, and Spain Bluemed BIOTECFOR A project that aims to develop sustainable biotechnological solutions to produce highvalue compounds from forestry and agricultural biomass. Forestry - Biomaterial Clusters Technological centres Project EU (Spain and Portugal) Biotecfor Source: Own compilation. 3.5 Financing 3.5.1 Policy Instruments for Financing in selected MR countries Many of the financing instruments with direct access to SMEs seem to come from funds or co-financing from private investors. In Italy and Spain, the Next Generation Plan is certainly one of the main instruments. In Italy it is known as the National Recovery and Resilience Plan, while in Spain it is the Spanish Strategic Projects for Recovery and Economic Transformation, known as PERTEs after the acronym for their name in Spanish. They are strategic projects that have considerable potential for kickstarting the Spanish economy and require the [Titel] Page 85 of 353 partnering up of several players, including public authorities, companies and research organizations. The Plan is mainly composed of 6 Missions or Policy Areas that correspond to the 6 pillars of the EU’s Next Generation Plan: (i) the green and connected automotive industry, (ii) the green hydrogen industry, (iii) the aerospace industry, (iv) sustainable and efficient agriculture, (v) use of Spanish in artificial intelligence, (vi) or development of an advanced National Health System. They are subdivided into components that address specific challenges and are structured into investments and reforms. The plan targets individuals and citizens and is divided into several policy areas. Regarding funding for SMEs, next to European programs, a very significant role has been played by National Technological Clusters, which have been set up to create permanent dialogue platforms between public research networks and enterprises. Direct funding is primarily observed in projects related to the digitalization of companies. As for other calls, the goal is to encourage participation between public and private entities, with a target that at least 20% of the aid budget goes to SMEs. In Italy and Spain, the main funding resources are: • European Structural and Investment Funds (ESIFs) • European Territorial Cooperation programmes • Fund for European Aid to the Most Deprived (FEAD) • Complementary Programmes Action Plans for Cohesion 3.5.2 Company Financing For South Macro-region, the volume and type of financing rounds is comparatively developed with more variety of the funding rounds in the more developed ecosystems in Italy and Spain which reflects the disparities across the ecosystems and the greater disparities between the countries with the most developed market, respectively amount and number of deals most prominent in Italy and Spain (Figure 20, Figure 22). The data for Greece and Cyprus suggests less developed financing markets in terms of number of financing rounds and financing amounts but on condition that all deals in these countries were proportionately reported. The grants are a notable part of the financing rounds in Cyprus, Greece and Portugal. This could indicate that companies in these countries are demonstrating heightened awareness of funding possibilities from public national or EU channels, along with a more advanced ability to navigate and oversee EU projects. This inclination might be attributed to limited number of local private investors and, respectively, limited investment prospects available at the local [Titel] Page 86 of 353 level, compelling these companies to explore grant opportunities elsewhere. Additionally, the involvement of privately or publicly funded intermediaries such as industry clusters, SME agencies, and accelerators may play a significant role, particularly when they offer services like guidance and support in applying for EU grants, facilitating networking, attracting foreign investments, and expanding into international markets. The companies in the South macro-region receive funding from private investors located predominantly outside their countries with private investors from Spain and Italy being in the top 20 investors by number of deal participation (5.11% and 2.55% of all deals respectively). Otherwise, there are reported active private investors in all South macro-region countries with 601 investment rounds in total. It is notable that there are similar proportions in the amounts per investment round (Figure 23) for early-stage companies (TRL 1-6) in all countries. It is obvious that the volume of the deals both in the number of round and the total investments are significantly bigger in Spain and Italy. This can be explained by differences in country and population size and the internal markets that early-stage companies initially rely on to commercialise and develop their product. Figure 22. Type of financing rounds in Southern MR. [Titel] Page 87 of 353 Source: Dealroom.co. Figure 23. Early stage funding rounds and amounts in Southern MR. Source: dealroom.co. The total amount raised per country for all investment deals is presented on Figure 24. The difference comes from the more mature investment deals that in later company development stages might be in significant amounts but take place less often. Example is the biggest deal in the South macro-region in Italy for the amount of approximately EUR 185 million in January 2022. [Titel] Page 88 of 353 Figure 24. Total reported amount raised by country in Southern MR. Source: dealroom.co. 3.5.3 Impact of Policies for Financing in selected MR countries There are several opportunities and policies implemented in the bioeconomy at European level that can be match with the needs of Italy and Spain. However, it is necessary to improve the integration of programming in a common strategic framework and strengthening the capability of financial mechanisms to ensure the long-term stability of bio investments – beyond the programming period of public administration budgets. This function should be performed by the Cohesion. Policy Funds that make resources available along seven (plus three) year programming periods in thematic objectives and with investment priorities consistent with the bioeconomy development. Cohesion Policy Funds, according to their rules, are therefore allowed to support investments structured and amortized over the medium to long term by integrating and stabilizing resources from the ordinary national policy, to create a funding matrix in which programming and financial needs are blended. Another barrier that needs to be addressed at this point is the lack of experts and professionals with a cross-sectoral and cross-industry background who are able to seize funding opportunities on an activity-by-activity basis. In this direction, as the framework is so complex and heterogeneous as are the procedures, it is increasingly necessary to bring SMEs and the private sector closer to intermediaries that perform this function. Finally, a critical issue is related to the results and outcomes of the financed activities and initiatives in the SMEs and private sector. There is not an update database in the selected countries, an overall open-source report available to track the [Titel] Page 89 of 353 implementation of plans or programmes (especially for the PNNR in Italy). This create a fragment framework and it is difficult to track the investments and as far the state of the art of the bioeconomy. 3.6 SWOT-Analysis of the Southern Macro-Region Table 8 SWOT Analysis of the Southern Region (Spain, Portugal, Malta, Italy, Greece, and Cyprus) Strengths - Good example of defined policy in Italy and Spain that could drive the development of the overall macroregion - Universities studies programme and universities and research centres that help to develop technologies and knowledge that can subsequently be transferred to industry and other sectors - High expertise and level of technology at pilot scale for valorisation of feedstock - Accelerator programmes and startup incubator promoting technology transfer - Significant participation in EU programs such as Horizon 2020 and Horizon Europe, CBE-JU and Interreg - Several clusters and technological platforms that facilitate collaboration and knowledge exchange to promote innovation Weaknesses - Lack of dedicated actors and dedicated bioeconomy policies In Greece, Portugal, Malta, and Cyprus - Lack of infrastructure for development and scale-up of technologies in the bio-based industrial sector (pilot plants, open pilot facilities, etc.) - Limited implementation of bioeconomy strategies - Lack of structured policy coordination at national level - Low capabilities and resources for technology transfer - Lack of experts and professionals with a cross-sectoral and crossindustry background who can seize funding opportunities on an activity-by-activity basis - Lack of Horizontal coordination among Ministries and political departments’ results in the blurring of responsibilities and tasks of each one in the development of the bioeconomy strategy. Opportunities Threats [Titel] Page 96 of 353 Latvia 44 -1.6 2.2 6.9 -291 46.4 Lithuani a 78 2.4 1.3 7.9 -462 37.4 Swede n 593 0.7 1.6 8.6 52 31.6 Source: Eurostat 4.1.1 Production and industrial use of biomass From the EU perspective, the BSR region stands out for having the highest availability of land for wood biomass supply. In the BSR, the countries that have major forestbased economic activities are Estonia, Latvia, Finland, and Sweden (in Lithuania and Denmark the sector has much smaller significance). Sweden has the largest area covered with forests, namely 279,800 sq. km in 2021 followed by Finland (224,090 sq. km) in 2021, representing over 2/3 of land area in both countries. In Estonia and Latvia, the forest area also represents more than ½ of the land area. The forest and wood production of these four countries account for about 1/3 of respective values for the entire EU-27 and is therefore of major importance for the EU forest sector (Table 11). In comparison to the much smaller Baltic States Estonia and Latvia, Finland and Sweden have, however, much bigger forest resources, volume of forest products production and have companies that are major players at the global level. The two countries are also major producers of both pulp and paper and wood products, whereas the Baltic countries have very small or no pulp and paper production, and instead focus very much on wood products only (sawn wood and wood panels). With respect to agricultural land, Sweden hast the largest agricultural area (30,029), followed by Lithuania (29,378 sq. km) and Denmark (26,180) (Table 11). Whereas in Sweden agricultural land amounts to only 7.4% of total national land area and thus plays a comparatively less significant role, in Denmark and Lithuania the share of agricultural land, account to 65.5% and 47% of total national land area in 2021, respectively. In all other BSR countries the agricultural land was less than 1/3 of the total land area in 2021. The total agricultural area in the BSR countries corresponded to 8.4% of the total land area in BSR in 2021. All six BSR countries have access to the sea. Sweden has the largest territorial sea area (70,000 sq. km), followed by Finland (54,130 sq. km) and Denmark (40,000 sq. km) (Table 11). These three countries also have the largest exclusive economic zones: Denmark (61,500 sq. km), Sweden (60,000 sq. km), and Finland (29,080 sq. km). [Titel] Page 97 of 353 Table 11 Forest, agricultural, territorial sea area, and exclusive economic zone of the Baltic Sea Region Country Forest Area (sq. km) Agricultural Area (sq. km) * Territorial Sea Area (sq. km)8 Exclusive Economic Zone (EEZ) (sq. km) Inland waters area (sq. km) Denmark 6,294 26,180 40,000 61,500 na Estonia 24,384 9,870 11,811 11,300 13,389 Finland 224,090 22,680 54,130 29,080 34,5159 Latvia 34,147 19,700 10,178 17,656 668 Lithuania 22,027 29,378 1,810 4,560 35 Sweden 279,800 30,029 70,000 60,000 122,00010 Total 590,742 137,837 187,929 184,096 170,607 Source: Worldbank (2021), European MSP Platform. *Agricultural land refers to the share of land area that is arable, under permanent crops, and under permanent pastures. Primary Production In the primary sector (agriculture, forestry, fishing), forestry is the most important sector in the bioeconomy in the BSR (DK, EE, FI, LV, LT, SE). Forestry amounts to 59%, agriculture almost 41%, and fishery is below 1% of the total biomass production measured in tonnes of dry matter (Figure 26). In Finland and Sweden forestry amounts to more than 74% of the production (Figure 27). Denmark leads when it comes to production from agriculture (91.5%), followed by Lithuania. With regards to fishery, Denmark features as the lead country in the region, followed by Estonia, Finland, Lithuania, and Latvia. 8 www.maritime-spatial-planning.ec.europa.eu 9 https://www2.stat.fi/tup/suoluk/suoluk_alue_en.html 10 https://www.arl-international.com/knowledge/countryprofiles/sweden#:~:text=date%20of%20access).-,Overview,km2%20is%20inland%20waters [Titel] Page 98 of 353 However, it is worth noting that the only available macro data on biomass production are from 2016 and not up to date. Currently, the countries in the Baltic Sea macroregion are also focusing on the blue bioeconomy. Therefore, it must be considered that the percentage of biomass production from fishery as well as aquaculture must have also increased in the last few years. Figure 26. Biomass Production from Primary Production Systems. Measure: tonnes of dry matter, agriculture: includes crop and animal production. Source: Datam JRC, European Commission. [Titel] Page 99 of 353 Figure 27. Biomass Production from Primary Production Systems in BSR (DK, EE, FI, LV, LT, SE). Measure: tonnes of dry matter, agriculture: includes crop and animal production. Source: Datam JRC, European Commission. Use of Biomass In the BSR (DK, EE, FI, LV, LT, SE) about 108 million tonnes of biomass (dry matter) from agricultural, woody, and marine sources were consumed to produce energy, materials, and food in 2017 (Figure 28 and Figure 29). This data represents 13.4% of the total biomass consumption in the EU-27. Clearly, the highest demand among the countries in the BSR (DK, EE, FI, LV, LT, SE) coincides with those that have a larger area and a higher population. In these countries, over half of the biomass is used for energy production, about a quarter for food and feed production, and the rest for biomaterials. [Titel] Page 100 of 353 Figure 28. Total biomass consumption in the Baltic Sea region. Measure: tonnes of dry matter, agriculture: includes crop and animal production. Source: Datam JRC, European Commission. Figure 29. Total biomass consumption in the Baltic Sea region. Measure: tonnes of dry matter, agriculture includes crop and animal production. Source: Datam JRC, European Commission. [Titel] Page 101 of 353 Biomass Flows Figure 30 shows a summary of the biomass flow data in 2023 for the BSR (DK, EE, FI, LV, LT, SE). 11 Most of the biomass is produced locally and only a small fraction is netimported from outside of EU-27. The largest amount of biomass imported comes from agriculture. When it comes to its use, most of wood biomass is consumed within the EU-27 countries and only a small fraction of wood biomass is net-exported to outside of the EU-27 countries. By contrary, only 60% of the amount of fishery biomass is consumed within the EU-27 countries, 40% is exported to outside of the EU-27, and about 3% is wasted. As for food biomass, over a half is either lost or unknown how it was used. From the known part, more than 80% is consumed and the rest exported. Figure 30. Biomass flows by sector for the Baltic Sea region Measure: tonnes of dry matter, in net trade (exports/imports from outside of EU-27 countries). Source: Datam JRC, European Commission. Agriculture and food, forest-based and chemical industries are among the strong drivers of BSR’s economy. Forestry, wood products and furniture and paper play a vital 11 Slight deviations to the figures above are possible, due to partly different reference years and additional attribution steps of data [Titel] Page 102 of 353 role (45.8% of total GDP of BSR countries 12 ). The wood value chains in BSR are diverse, with ranging uses from energy and construction. Forestry In recent decades, some important structural changes have taken place for which purposes the wood produced in the Baltic Sea Region has been used. Especially two developments stand out, and they are the mirror images of each other: 1. From 2006 to 2018, fuelwood (used for energy) production has increased by 7.4 million m3 or by 56%. 2. On the other hand, the graphics paper production (in Finland and Sweden) declined from 2006 to 2018 by 6.7 million tonnes or by 43%. Fuelwood increase is a result of the EU and national policies that have encouraged the phasing-out of fossil energy by bioenergy. Furthermore, graphics paper decline is a result of digital media replacing print media (Borkowski et al, 2020). Finland is one of the most heavily forested countries of the European Union covering over 70% of its land, with its forestry sector accounting for over 20% of the country’s export revenue. Sweden ranks the second in the forest area with 68% of its land area. Agriculture All studied countries in the BSR are experiencing a structural transformation in agriculture – the number of farms is decreasing while farm size is increasing. Overall, the acreage of agricultural land remains fairly stable. In Denmark and Sweden, the structural transformation from many small farms to fewer, larger farms has come the furthest, but rate of transformation has accelerated in the Baltic States (Estonia, Latvia, Lithuania) during more recent years. The driving forces behind the structural transformation towards larger farms include technological advances, changes in the market, and agricultural policy. Larger farms are generally more profitable. Parallel to this, agricultural is becoming increasingly specialised, which means that some regions in each country are dominated by crop production and others by livestock production (Stockholm University, 2016). Denmark has the largest agricultural system (including permanent crops and pastures) – covering over 60% of its land area and accounting for nearly one-quarter of its export value. Lithuania ranks the second with more than 45% of its land area 12 https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMICS/index.html [Titel] Page 103 of 353 provided for agriculture. In the rest of the countries in the BSR agricultural land is below 1/3 of the total land area. Blue Bioeconomy The studied Baltic Sea Region countries differ in the structure and composition of their maritime economies. Fishery is a much more developed – as highly traditional - sector than the relatively new aquaculture sector, which has only started some 50 years ago. However, aquaculture activities have been increasing in the recent years mainly due to EU support. Lithuania and Estonia almost only practise fishing. Estonia and Finland also perform aquaculture but mainly in freshwaters. Denmark and Sweden practise fishing as well as both inland and marine aquaculture. The leader among the BSR countries in fish catches and production from aquaculture is Denmark. The total fish catch and harvest from aquaculture in this country was over 500 thousand tonnes in 2021. In the other countries this value ranges from about 60 in Latvia to 170 thousand tonnes in Sweden. Overall, both fishery and marine fish aquaculture are problematic within the Baltic Sea Region due to the severe environmental problems, which persist in the Baltic Sea mainly caused by eutrophication and oxygen depletion. Hence cod and herring fishery are currently highly restricted and hardly any new licenses have been handed out for new fish aquaculture sites in the past years. However, numerous initiatives exist, which promote sustainable fishery of invasive species as well as uptake of so-called low trophic / regenerative aquaculture, which does not breed fish, but grow mussels or algae, which do not need to be fed – but live of the surplus nutrients in the Baltic Sea waters. European aquaculture accounts for around 20% of seafood production, and is mainly concentrated in Spain, France, Italy, the United Kingdom, and Greece. The BSR accounts for around 5% of total EU production and 3.7% of total EU value (FAO, 2018). With environmental regulation limiting offshore aquaculture in the Baltic Proper, Baltic production predominantly refer to extensive freshwater aquaculture. Table 12 shows the state of play of aquaculture in studied countries. Table 12 State of play of aquaculture in BSR Country Size of Sector Main species Denmark Freshwater aquaculture has increased 7 times since 2008 despite the strong environmental legislation concerning aquaculture in DK. Rainbow Mussels Trout 90% European eel, Blue [Titel] Page 104 of 353 Sweden Rapid growth of inland aquaculture between 1995-2015 Rainbow Trout, Arctic char, Blue Mussels Finland Leaders in aquaculture Baltic Sea Offshore Cage Rainbow Trout, European Whitefish, Sturgeon, Pike perch, Nelma Estonia Environmental conditions limit Estonian aquaculture to 700 tonnes annually. Rainbow trout (90%), Common Carp, Sturgeon, European eel Latvia Small aquaculture sector Common Carp, some sturgeon, trout, pike, crayfish Lithuania Increase of 45% between 1995 and 2015 Common Carp, some rainbow trout, sturgeon, African catfish, and European eel Source: Schultz-Zehden et al. (2021). Mussel farming in the Baltic Sea Proper is still in infancy, with hardly any large commercial farm being operational yet in the region. However, there is an increasing number of pilot sites (e.g. in the Stockholm archipelago, Estonia), a growing community of mussel farmers (including some from the Western Baltic) and an increasing willingness among environmental decision makers to accept mussel farming as a possible sea-based nutrient removal measure. Apart from some farms in Sweden and Denmark, there is also already one operational mussel farm in Estonia (Schultz-Zehden et al, 2021). Production of macroalgae (seaweeds) is at a nascent phase in the Baltic and almost 100% macroalgae raw material supply come from import from EU countries and third countries, like in Norway, Russia, China, and Japan. Commercial macroalgae production activities in the Baltic are mostly limited to wild harvesting at local radius, with Denmark being the largest seaweed producer (100 tonnes in 2018). Only a handful of marine seaweed farms exist so far in the Baltic Sea Region: three farms at the Western coast of Sweden and 4 farms in Denmark (Table 13). There are also a few experimental farms in Western Baltic and one in Estonia. However, seaweed cultivation activities are expected to grow exponentially in Denmark and Sweden in the next few years (Schultz-Zehden et al, 2021). [Titel] Page 105 of 353 Table 13 Seaweed farms at the Baltic Sea Region Name Stage Type Country Nordic Seafarm Commercial Marine Sweden Bohus Seaculture Commercial Marine Sweden Kristineberg Research Centre Research Marine Sweden Hjarnø Havbrug Commercial Marine Denmark Dansk Tang Commercial Marine Denmark Sømad Commercial Marine Denmark Pure Algae Commercial On land Denmark Algae Centre Research Marine Denmark Estonia Research On land Estonia Source: Schultz-Zehden et al. (2021). 4.1.2 Industrial deployment of bioeconomy and economic relevance 4.1.2.1 Industrial deployment Open-Access Pilot Plants Regarding open-access pilot and demo facilities, the Pilots4U network database shows a mixed picture. While Finland and Sweden possess a high one-digit number of facilities, Denmark and Estonia rather lack such infrastructure. [Titel] Page 112 of 353 Figure 34. Mapping of BSR biorefineries focusing on agriculture conversion (Datam JRC). Source: Datam JRC, European Commission. [Titel] Page 113 of 353 Figure 35. Mapping of BSR biorefineries focusing on wood biomass conversion (Datam JRC). Source: Datam JRC, European Commission. Figure 36. Mapping of R&D and pilot biorefineries in BSR (Datam JRC). Source: Datam JRC, European Commission. [Titel] Page 114 of 353 4.1.2.2 Economic relevance Figure 37 shows the number of people employed in bioeconomy sectors in total in the Baltic Sea Region from 2008 until 2020. The total employment in the bioeconomy in the Baltic Sea Region decreased slightly in the last few years, mainly due to a reduction in the agricultural labour force. It reached 0.97 million total employments in the bioeconomy sectors in 2020 (7.3% of total employment in BSR). The primary production, comprising agriculture, forestry, and fishery, still employed most people in the bioeconomy. As for primary production, fishery and aquaculture were the smallest on the scale, comprising only 0.8% of the total employment in the bioeconomy. Although agriculture employed the largest number of people, it decreased gradually between 2008 and 2020. By contrary, bio-based electricity, and liquid biofuels sectors as well as bio-based chemicals, pharmaceuticals and plastics sector have the smallest number of people employed, since these sectors are still not that developed in the Baltic Sea Region. However, they are the fastest growing sectors as it can be seen in the Figure 39, which shows the employment growth between 2008 and 2020 in the Baltic Sea Region. Between 2008 and 2020, bio-based electricity and liquid biofuels sectors increased the number of people employed by more than 65%, whereas the more traditional sectors, such as fishing and aquaculture, paper, agriculture, wood products and furniture decreased it. This may be partly explained by the increasing use of technology and automation and partly by the decline in the number of farms in the agricultural sector (Schuh et al., 2019). The largest negative growth was observed in the bio-based textiles sector, which experienced a 43% reduction in employment. In addition, the distribution per country in Figure 38 shows that the Scandinavian countries highly differ in their structure compared to the Baltic ones, with the former having relatevly more employed person in forestry and biomass conversion sectors. [Titel] Page 115 of 353 Figure 37. Number of people employed in bioeconomy sectors in BSR between 2008 and 2020 Source: Datam JRC, European Commission. [Titel] Page 116 of 353 Figure 38. Number of people employed in bioeconomy sectors per country in 2020 Source: Datam JRC, European Commission. [Titel] Page 117 of 353 Figure 39. Employment growth between 2008 and 2020 in BSR Source: Datam JRC, European Commission. Figure 40 shows the value added in bioeconomy sectors in the Baltic Sea Region between 2008 and 2020. The total value added in bioeconomy in BSR increased significantly in the last years mainly due to a rise in the value added in the bio-based chemicals, pharmaceuticals and plastics and food, beverage, and tobacco sectors. It reached EUR 62.47 billion total value added in the bioeconomy sectors in 2020. The primary production, comprising of agriculture, forestry, and fishery, creates the largest value added (one third) of the total added value, where fishery and aquaculture sector generates the lowest value of EUR 613.1 million. All sectors except for the bio-based textiles sector increased their value added between 2008 and 2020. The largest growth was experienced by the liquid biofuels sector, which more than doubled its value added, followed the bio-based chemicals, pharmaceuticals and plastics sector that increased its value added by 86.3%. This is visualised in the Figure 41 showing the growth of value added in the bioeconomy sectors in the Baltic Sea Region between 2008 and 2020. Interestingly, most of the bioeconomy sectors that decreased their employment between 2008 and 2020 increased their value added, most notably the agriculture and fishing and aquaculture sectors. Although bio-based textiles sector almost halved its employment, its value added decreased only by about 7%, meaning that also this sector increased its value added per person employed. Figure 42 shows the value added created by bioeconomy sectors in BSR per country in 2020. It is apparent that bioeconomy sectors in Denmark, Finland and Sweden created relatively more value added than the bioeconomy sectors in Estonia, Latvia, and Lithuania. In the latter, the added value was generated mainly by the traditional sectors. In the former the novel bioeconomy sectors generate a significant part of the total added value. [Titel] Page 118 of 353 Figure 40. Value added created by bioeconomy sectors in BSR between 2008 and 2020 Source: Datam JRC, European Commission. Figure 41. Value added growth in bioeconomy sectors in BSR between 2008 and 2020 Source: Datam JRC, European Commission. [Titel] Page 119 of 353 Figure 42. Value added created by bioeconomy sectors in BSR per country in 2020 (in million €). Source: Datam JRC, European Commission. Finally, Table 16 shows the total value added and employment generated in the bioeconomy sectors in the Baltic Sea Region compared to the EU average in 2020. The Baltic Sea Region’s share of people employed in all bioeconomy sectors in EU amounts to 6%, while the region’s share of value added of all bioeconomy sectors adds to 9%. Put differently, the value added per person employed in the bioeconomy sectors is 64,000 EUR, which is almost double the value of the EU average of 38,000 EUR. Yet, it should be noted that despite a very good supply of bio-raw materials, the ability of the Estonian, Latvian, and Lithuanian bioeconomy to create added value per employee has been below the EU-28 average Figure 42). The labour productivity of bringing wood and wood products and producing food and beverages in the three countries is two to three times behind the corresponding indicator of Finland, Sweden, and Denmark. The much lower competitiveness of the Baltic States’ bioeconomy can be largely explained by the lower complexity of their export products compared to the Nordic countries. [Titel] Page 120 of 353 Table 16 Total value added, and employment generated in BSR compared to the EU average in 2020 Number of people employed in biomass producing and converting sectors (thousand) BSR’s share of people employed in biomass producing and converting sectors (% of EU) Value added of biomass producing and converting sectors (billion €) BSR’s share of value added of biomass producing and converting sectors (% of EU) 968.6 6 62 9 Value added per person employed in biomass producing and converting sectors (thousand €) Baltic Sea macro-region EU 64 38 Source: Datam JRC, European Commission 16 . 4.1.3 Actors 4.1.3.1 Academia, Research and Development The Baltic Sea Region has an infrastructure of universities, research centres and industries, and active associations for bioeconomy research. There is a strong support towards high-tech university spinoffs. The R&D in the BSR covers the entire bioeconomy. However, each of the Baltic Sea countries specialises in different areas of bioeconomy: • Denmark has strong competences when it comes to the health sector and production and development of feed, food, and other products based on proteins. • Lithuania is strengthening its position as a regional hub for biotech. Finland is a pioneer in circular economy and cleantech. 16 https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMICS/ [Titel] Page 121 of 353 • Sweden has strong bioenergy and innovative bio-based sectors predominantly based on wood 17 . The range of studies related to the bioeconomy offered by higher education institutions has expanded. Universities and universities of applied sciences have dozens of degree programmes related to the bioeconomy from basic education to opportunities to specialise in bioeconomy. For instance, Finnish higher education institutions offer a study module “Bioeconomy Expert’s Competence Portfolio”, which includes courses in bioeconomy offered as part of open higher education at many different higher education institutions (Finnish Government, 2022). A study from 2019 done by Lovric et al. mapped research activities in the field of forestbased bioeconomy, based on projects from the EU framework programmes and the European Research Area. Projects listed in the CODRIS database (FP7, H2020 and Work Programme on European Research Area) were used as a primary data source between 2008 and 2018. During that period, Swedish and Finnish organizations received the third and fourth highest amount of funding, respectively. Sweden received EUR 126 million and Finland EUR 125 million, after Germany and France. Finland had the highest number of project coordination’s (62) followed by Germany (59). Also, when looking at the share of funding allocated to private companies Sweden and Finland stand out. Among the most funded private organizations in Europe were Swedish Biofuels AB and the Technical Research Centre of Finland (VTT). When looking at the number of cooperation done between countries, Finland after Germany has the second highest number of bilateral project cooperation ties out of all European countries. These ties were mostly with Germany and Sweden. At the company level, VTT is the organization with the highest overall number of project participations (68), followed by Fraunhofer Society (41) and Swedish Research Institute (34). Also, Denmark has strong bioeconomic research environments that over time have had great success in the EU framework programmes for research and development. Several EU-funded research projects using biomass feedstock and biotechnologies have also been running in Lithuania and Latvia in the last few years. This demonstrates 17 https://www.ri.se/en/our-stories/bioeconomy-arena-will-make-sweden-a-world-leaderin-bioeconomy#:~:text= leader%20in%20bioeconomy- ,Bioeconomy%20Arena%20will%20make%20Sweden%20a%20world%20leader% 20in%20bioeconomy,by%20the%20end%20of%202023. [Titel] Page 128 of 353 widespread within advanced foods, where they have strong positions within biobased ingredients and fermentation technologies that, among other things, are used to produce beer and cheese 23 . Industrial clusters Cluster mapping helps to understand better the industrial strengths in bioeconomy related areas across the BSR. The European Observatory for Clusters and Industrial Change offers an extensive cluster mapping dashboard that allows visualisation of cluster locations by sectoral industries 24 . The ShapingBio team extracted a series of cluster mapping visualisations in the main bioeconomy related thematic fields (based on the on NACE 2-Level sectors system) covering the BSR. The mapping shows that within the studied BSR, a lot of attention is paid to bioeconomy-related cluster development. Clusters first appeared in the BSR several decades ago, but the pace of clusterisation increased dramatically during the period of 2010– 2015, with the implementation of EU financial instruments supporting their development. Today, BSR has a well-developed cluster structure: most industrial sectors have their own cluster representation. The majority relate to biotechnology, energy, food, paper and pulp, and waste. Finland also has many water expertise clusters, ecosystems, and networks. Figure 43 shows all clusters of the main bioeconomy related thematic fields including agriculture, forestry, blue economy, bio-based sectors, and food systems. The cluster mapping data shows 38 clusters across the entire region, except for Estonia. Figure 43 shows that forestry clusters are concentrated in the regions of the Scandinavian countries, especially in Finland. Agriculture and food clusters are apparent in all BSR countries (except for Estonia). Whereas the agriculture and forest clusters are situated in the countryside, the food clusters are also frequently situated around urban areas such as Malm, Riga, Kaunas, and Vilnius. There are only a few clusters in the blue economy, and these are in Denmark, Finland, Latvia, and Lithuania. The cluster mapping data shows that there are strong industrial capacities in bio-based sectors in BSR. There are 26 bio-based industry clusters in total, where Finland features as the leader. The Table 18 summarises the number of clusters per bioeconomy field in EU-27 and BSR. Most clusters represent between 16 and 20% of all EU-27 clusters per field. Yet, 31.3% of all forestry clusters in EU-27 take place in BSR. 23 https://www.dti.dk/testing/biosolution-technology-centre-btc/44422 24 www.clustercollaboration.eu/cluster-mapping [Titel] Page 129 of 353 Table 18 The number of clusters per bioeconomy field in EU-27 and BSR Sector EU-27 BSR (DK, EE, FI, LV, LT, SE) Bioeconomy sectors in BSR as a share of EU-27 Agriculture 44 7 15.9% Forestry 16 5 31.3% Blue Bioeconomy 23 4 17.4% Bio-based sectors 162 26 16% Food Systems 54 11 20.4% Total 237 38 16% Source: European Observatory for Clusters and Industrial Change. [Titel] Page 130 of 353 Figure 43. Mapping of clusters in BSR (DK, EE, FI, LV, LT, SE). [Titel] Page 131 of 353 Source: European Observatory for Clusters and Industrial Change. 4.1.3.3 Civil society In the BSR, there are many different environmental organisations. Yet, those more active are found especially in the context of forestry. This comes from the fact that the environmental organisations and the forestry industry have often very opposing views on how forest bioeconomy should develop. These organisations are mainly active on a national level. Some of the most active environmental organisations in BSR are listed in the Table 19. Table 19 Examples of environmental organisations in BSR Country Name of environmental organisation Denmark Greenpeace Noah VELUX Foundation Estonia Estonian Forest Aid Finland Finnish Association for Nature Conservation WWF Finland Latvia Latvian Ornithological Society Lithuania Circula economy lt Sweden The Swedish Society for Natural Conservation WWF Sweden Source: Own compilation. The environmental organisations in BSR have objections mainly to the forest policies, insufficient protection measures and practises by the forest industry: In Finland, for instance, environmental organisations are opposing the updated Finland’s bioeconomy strategy saying that it does not sufficiently address the role of the bioeconomy as an accelerator of habitat loss and climate change, nor does it propose measures to ensure the sustainability of the bioeconomy in the future (Wolfgang, 2022). [Titel] Page 132 of 353 In Denmark, the climate policy is challenged for being based on burning (imported) wood biomass for energy and leading to cutting down of trees abroad. In Sweden the intensive forestry industry based on monoculture and clear-cutting is objected by environmental organisations as loggings conducted by forest companies do not adequately comply with its rules, at the same time as sanctions are lacking and basic requirements are too low. The industry is also being criticised for allowing fertilization, soil scarification, cleaning of ditches, exotic tree species and pesticides. Moreover, the system is based on voluntary protection; only 3.6% of the productive forest area is formally protected and further 4.8% voluntary protected in Sweden (Fisher et al, 2020). Similarly, only 14.1% of forests in Estonia and 7% in Latvia are strictly protected. Forest management regulations for those forests have become more laxed in Estonia in recent years, and there is heavy pressure from the forestry industry in Latvia to follow the same path (Kuresoo et al, 2020). Recently, there have been many initiatives aiming to involve youth into bioeconomy activities. One example is the successful Estonian entrepreneurship education programme “Edu ja Tegu”. The aim and task are to develop young people’s entrepreneurial competencies in line with the labour market needs. The programme gathers various stakeholders, such as the Education and Youth Board, different ministries, universities, and county development centres. Another well-working initiative is the Junior Achievement Programmes in secondary schools in Estonia, in which students are encouraged to create student enterprises and propose ideas for the valorisation of local resources (Nordregio EE, 2022). 4.1.4 Bioeconomy Policies in the Baltic Sea Macro-Region Among the BSR countries, Finland and Latvia have developed dedicated bioeconomy strategies with cross-sectoral approaches, while Sweden is in the process of setting up national bioeconomy strategy (expected to be completed at the end of October 2023). Estonia published a roadmap on circular bioeconomy, which serves as the main policy document for the national bioeconomy development. Denmark and Lithuania have several single-sector strategic documents that support their respective national bioeconomies. Most of the national bioeconomy documents listed in Table 20 focus on the production and use of biological resources. Generally, agriculture and forestry are seen as the most significant bioeconomy industries. A few countries emphasise additional specific strengths; for example, industrial enzyme production is a particular focus in Lithuania, [Titel] Page 133 of 353 while Finland and Denmark concentrate on the industrial use of biotechnological processes. Also, chemical industry is important in several countries. Lithuania has set priorities in the bio-based chemistry and biorefining areas and the bioeconomy development is also strongly related to the health sector and bio-based pharmaceuticals (Bio-based Industries Consortium, 2020). Finland focuses on wood processing, specifically the pulp and paper industry. Latvia and Finland increasingly emphasize the blue bioeconomy in their strategies. The Latvian bioeconomy strategy lists exploring untapped marine bioresources such as sea grass, mussels, and algae as a priority (German Bioeconomy Council, 2018) The Finnish government is pursuing a pro-active policy for promoting sustainable fish aquaculture (Schultz-Zehden et al, 2021). Some countries have developed specific research and innovation strategies with a priority on bioeconomy-related areas, such as bio-based industries, bioenergy, biosciences, or agriculture/forestry/marine innovations. In these strategies, interdisciplinary cooperation between university, research institutes and business play an important role. Key research topics include new technologies on water treatment (Finland), new bioeconomy value chains (Denmark), environmental (Lithuania) & marine biotechnology (Denmark) (German Bioeconomy Council, 2015). Even though bioeconomy strategies significantly differ among the countries of BSR, the following aspects are common: the increase of competitiveness, value-added, export, employment rate and sustainable production of biomass. Table 20 National bioeconomy policies in the Baltic Sea Region Country Perspective Bioeconomy Strategies (year of publication) Strategy Goals Priority Areas of the Strategy Target Sectors Policy Interventions Denmark Green Economy Growth Plan for Water, Bio and Environmental Solutions (2013), Growth Plan for Food (2013) Economic growth, Job creation, Competitiveness, Ressource efficiency, Grand societal changes Agriculture, Fishery, Testing of high-value products Promoting innovation, Commercialisation [Titel] Page 134 of 353 Estonia Holistic Bioeconomy Development Ministry of Regional Affairs and Agriculture of Estonia (2023) Wealth creation, Sustainable production, Exploit untapped resources, Reduce dependency on non-renewable resources, Promote R&D in biotechnology Forestry (wood), Agriculture, Food, Fisheries, Biochemicals and plastics, Enzymes, Biofuels Promoting innovation Infrastructure Finland Holistic Bioeconomy Development Finnish Bioeconomy Strategy (2022) Economic growth, Job creation, Competitiveness, Wealth creation Forestry (wood), Agriculture, Food production, Chemical, energy industries, Bioenergy Promoting innovation, Infrastructure, Commercialisation, Policy framework conditions Latvia Holistic Bioeconomy Development Latvian Bioeconomy Strategy 2030 (2017) Economic growth, Socially responsible and sustainable development Agriculture (food), Forestry (wood), Fisheries (aquaculture), Chemicals Promoting innovation, Demand-side instruments, Infrastructure, Commercialisation Lithuania High-Tech National Industrial Biotechnology Development Programme 2007-2010 (2006) Economic growth, Competitiveness, Grand societal challenges Industrial enzyme production, Biotechnology, Agriculture (food production) Promoting innovation, Infrastructure, Commercialisation Sweden Research & Innovation Swedish Research and Innovation Strategy for a Bio-based Economy Economic growth, Grand societal challenges, Sustainable society Bio-based industries, Forestry (wood), Agriculture, Promoting innovation, Infrastructure, Commercialisation, [Titel] Page 135 of 353 (2012), Swedish strategy for circular economy (2020) Biofuels for transportation Demand-side instruments Source: Various national strategies. 4.1.4.1 National bioeconomy strategies The Latvian bioeconomy strategy and the Estonian circular bioeconomy roadmap set vision for the national bioeconomy but do not provide an action plan. In 2022, Latvia published its first action plan on research and innovation within S3 that goes along with the bioeconomy strategy. A key aim guiding the update of Finland’s Bioeconomy Strategy has been the preparation of a systematic, comprehensive, and exhaustive action plan for developing the bioeconomy’s value added. The upcoming Swedish bioeconomy strategy will include an action plan. One of the known key actions will be the continued research and innovation. The national bioeconomy strategies have been shaped by the EU bioeconomy policy. Finland, Latvia, and Estonia have included the five EU Bioeconomy Strategy objectives in their national bioeconomy strategies (European Commission, 2018). EU bioeconomy strategy objectives • Ensuring food and nutrition security • Managing natural resources sustainably • Reducing dependence on non-renewable, unsustainable resources • Mitigating and adapting to climate change • Strengthening European competitiveness and creating jobs In fact, the Finnish strategy is even more ambitious and goes beyond the goals of the EU Bieconomy Strategy (expert interview). Reference to Green Deal particularly circularity can be seen in the national documents (FI, EE, LV), as a key aspect in the sense of them stating not to waste natural resources but to use and recycle them efficiently. In addition, the Finnish and Latvian Bioeconomy Strategies strive to make their country into a low-carbon and resource-efficient society, which aligns with the Paris Agreement as well as with the SDGs. (The idea is there, but with less debt and regulating.) Moreover, the development of LIBRA is based on insights from the guidelines of the EU Strategy for the Baltic Sea Region policy area “Bioeconomy - [Titel] Page 136 of 353 agriculture, forestry and fisheries”, (LIBRA, 2017; Ministry of Regional Affairs and Agriculture of Estonia, 2023; Finnish Government, 2022). The Finnish, Latvian and Estonian national documents aim to develop and promote horizontal and vertical cooperation at different stages and levels of the value chain. They encourage cooperation between research and business life as well as participation of actors in international networks and promote cross-sector cooperation. Finnish and Estonian national documents also encourage companies in different sectors to engage in regional cooperation to develop a business ecosystem based on side and waste streams. Additionally, the Finnish strategy promotes cooperation between nature tourism and other nature entrepreneurs as well as between educational institutions and business life. The Finnish, Latvian and Estonian national documents support investments in piloting, piloting and demonstration infrastructures and bio-processing facilities, and investments in the development of already existing facilities. Further, they aim to educate bioeconomy sector experts, producing new knowledge and knowledge transfer to prepare enough specialists with the necessary skills. Further, an effort is made in vocational education and training and its planning to anticipate the increasing competence needs of different sectors. Furthermore, Estonian circular bioeconomy roadmap aims to create and use of ‘hands-on’ circular bioeconomy teaching materials in kindergartens and general education schools (LIBRA, 2017; Ministry of Regional Affairs and Agriculture of Estonia, 2023; Finnish Government, 2022). They aim to strengthen research and development and innovation competences, the development, deployment, and acceptance of new technologies in society. Beyond that, the national strategies use different instruments to further promote bioeconomy. For instance, Finland offers business advisory services for SMEs and provide better communication on available funding opportunities. Latvia promotes forest owners’ certification, offers tax incentives for bio-based companies, increases the real estate tax on agricultural land not used for production and using the revenues for the development of the industry. Estonia applies IT solutions, including artificial intelligence, to use circular bioeconomy data and develop products and services, create digital collaboration platforms, optimise processes, and increase efficiency. Policy governance responsibility Whereas in Estonia, Latvia, Lithuania, and Denmark the Ministries of Agriculture are responsible for the bioeconomy policy development, in Finland and Sweden the Ministry of Economic Affairs and Employment and Ministry of Enterprise and Innovation, [Titel] Page 137 of 353 respectively, are responsible for it. This differences in responsible ministries may influence the bioeconomy policy of a country as such. According to an expert interviewed, a national bioeconomy strategy developed by a ministry of agriculture may focus too much on primary production and too little on higher levels of the value chain and not foster intersectoral collaboration adequately. By contrary, a strategy developed by a ministry of economy and innovation is in expert’s opinion more appropriate, because the ministry aims to foster and innovate bioeconomy across the whole value chain. All BSR countries horizontally coordinate their bioeconomy strategy development. Usually, they have an advisory board composed of representatives of the ministries involved. For instance, the Latvian advisory board consists of representatives of the Ministry of Agriculture, Ministry of Economics, and Ministry of Science and Education. Additionally, some have advisory boards at universities that consult ministries, provide necessary information, and make analyses, and conduct applied research. Moreover, Finland, Denmark and Sweden have national bioeconomy panels (in Sweden it is an expert group) that consist of representatives of different sectors, administration, research, industries, non-governmental organisations, and other stakeholders. The panel’s aim is to facilitate a continuous dialogue between public authorities, research institutions, business and civil society and actively participate in the bioeconomy policy process. Estonia is considering establishing a comparable bioeconomy advisory entity. Policy instruments As described above, the Baltic Sea Region, encompassing the countries of Denmark, Sweden, Finland, Estonia, Latvia and Lithuania is characterized by a high wood biomass supply with forest-based economies in Estonia, Latvia, Finland, and Sweden on the one hand, and blue bioeconomic activities as all of the countries have access to the sea. These economic landscape is also reflected in several policy instruments of the region. The most significant ones are listed in the Table 21. For instance, in the Scandinavian Sweden and Finland, several forest-based policy instruments can be identified. As has been observed in the other Macro-regions, also in the Baltic Sea Region, supply side policy instruments persist with support for public research and grants for industrial R&D as the most implemented instruments. Several funding activities shape the bioeconomy landscape in the countries. These policy instruments are not directly dedicated to the bioeconomy though, but deal with aspects, which are important for bioeconomy development in the region. The Innovation Fund Denmark, for instance [Titel] Page 144 of 353 4.1.4.3 Macro-regional bioeconomy strategies EU strategy for Baltic Sea region The Baltic Sea region has a long tradition of cooperation. There are more than 40 transnational organisations and networks in BSR. Some examples are: • The Nordic Council of Ministers • Council of the Baltic Sea States • The Union of the Baltic Cities • Helsinki Commission • Baltic Sea States Sub-Regional Cooperation • Baltic Sea Commission of the CPMR • SUBMARINER Network for Blue Growth Based on that tradition, in 2009 the EU Member States in the region decided to start a new type of transnational cooperation. The EU strategy for Baltic Sea region (EUSBSR) - the first macro-regional strategy in Europe - provides a unique platform for cooperation and coordination between eight EU Member States (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, and Sweden (EUSBSR, 2021). The EUSBSR is accompanied by an action plan, a document to be regularly revised as necessary. The updated strategy from 2018, recognises the need for increased involvement of EU’s Member States, actions to develop a circular economy, and better monitoring of progress of the bioeconomy. Prioritized policy areas include security of energy supply, promotion of the bio-economy, and improved nutrient recycling. The Policy Area Bioeconomy coordinates national bioeconomy policies, promotes the usage of bio-based business solutions, fosters the development of biological resources and new technologies and reaches out to new stakeholders. The Policy Area Bioeconomy covers sustainable use of biomass, agriculture, forestry, fisheries, aquaculture and rural development and it takes the entire value chain into account. The Policy Area Bioeconomy is aligned with EU regional - and international strategic frameworks such as the EU Bioeconomy strategy for sustainable Europe (EUSBSR, 2021). It also swiftly mentions the climate objectives of the Paris Agreement. EUSBSR does not have specifically allocated financial resources. Thus, funding for operations under the Strategy is intended to come from existing financial instruments. In the period 2021-2027, the Interreg Baltic Sea region transnational programme continues to support the implementation of the strategy, especially with regards to its governance. However, the limited programme budget cannot cover all the needs of [Titel] Page 145 of 353 the EUSBSR. Therefore, it must mobilise and use EU ‘mainstream’ national and regional programmes, cooperation programmes and other EU funding sources (EUSBSR, 2021). According to an expert from the Nordic Council of Ministers, cooperation works better between regional actors as regions are closer to local industries (e.g. through local clusters), they have specific tools to work with, and have key resources to work with industries. Also, knowledge can be transferred more easily on a regional than national level. One of the biggest gaps of the EUSBSR strategy is that food is not as prominent as it should be. The reason for this is that food policy has a lot of overlap with other areas like health, environment, tourism, and security. At the same time, focusing too much on food would have excluded forestry, which is more relevant in the BSR. Further, some areas of the policy framework are still underdeveloped or restricted. For instance, industries find it difficult to get approvals for producing certain products made from algae or for mixing insects into other food products (expert interview). Moreover, there are also challenges related to the governance structure. Whereas bioeconomy covers all areas where biological resources are used, the strategic and guiding body “steering group” consists of representatives from ministries who cover only one area. It turned out it would be more efficient to divide administration into three areas based on production: (1) protein produced by agriculture and maritime sectors (2) fibre and material made by utilization of bioproducts (3) energy produced by forestry (expert interview). BSR bioeconomy programme Besides the EUSBSR there is also the BSR bioeconomy programme, which was initiated by the Nordic Council of Ministers and presented in the same year as the revision of the EU bioeconomy strategy in 2018. The compatibility between economy and environment is the main aspect of the BSR bioeconomy strategy which is based on four main pillars: 1. competitive bio-based industries, 2. inclusive economic development, 3. sustainable resource management, and 4. resilient and diverse ecosystems. BSR bioeconomy programme is not binding and has no action plan. The document is more a vision than a holistic program. Considering individual BSR countries, the strategy has been adopted in national bioeconomy strategies (Germany, Finland, Latvia) or integrated into other policy documents (Sweden, Poland, and Denmark). Only Lithuania and Estonia have not adopted this strategy yet (Nordic Council of Ministers, 2015). [Titel] Page 146 of 353 The BSR-Bioeconomy strategy is not pursued under one joint budget. Activities related to providing oversight, management and facilitation of BSR-Bioeconomy cooperation are funded by the Nordic Council of Ministers, with contributions from the European Union. Implementation of more specific and specialised project activities need support from other partners (e.g. Nordic institutions; the EU Horizon 2020 programme; the EU Baltic Sea Region programmes) (Nordic Council of Ministers, 2015). 4.2 Policy process and policy coordination in Denmark The Baltic Sea Region bioeconomy is developing rapidly, and it is vital that the BSR’s national and regional policies follow and support this development. A detailed analysis of the policy process and policy coordination for the bioeconomy in Denmark is shown below. 4.2.1 Characterization of horizontal coordination between different ministries/departments The policy process for bioeconomy has origins in various ministries in Denmark. Bioeconomy seems to be considered as a system in Denmark, and expands across agriculture, forestry, and fishery sectors with many aspects of climate, environment, and nature conservation as well as research and innovation support at administrative and policy levels and is rather difficult to extract as such from various ministries and bodies. Furthermore, the public handling of organic waste fractions (food waste, sewage treatment, and Garden/Park waste should be considered part of the bioeconomy. Finally, the ‘fermentation industry’ using microorganisms to produce medicine and ingredients could also be viewed as part of the bioeconomy (interview with Food & Bio Cluster Denmark). The central ministries involved in the policy process of bioeconomy solutions are: • Ministry of Food, Agriculture and Fisheries of Denmark which is responsible for administrative and research tasks in farming, fisheries, and food production. • Ministry of Environmental of Denmark which is responsible for administrative and research in environmental protection. • The Ministry of Industry, Business, and Financial Affairs seeks to improve the conditions for business in Denmark. The Ministry conducts thorough economic analyses and suggests policy initiatives in areas imperative to economic growth. • The Ministry of Higher Education and Science has responsibility for research policy, innovation, and higher education. Universities, colleges of applied [Titel] Page 147 of 353 sciences, business academies, research parks, sector research institutes, research centres, and Danish institutes abroad belong, among others, to the ministry. • The Ministry of Climate, Energy and Utilities is responsible for national climate policy and international cooperation on climate change, as well as energy issues, meteorology and national geological surveys in Denmark and Greenland. The Ministry of Food, Agriculture, and Fisheries of Denmark has been most active in the policy process of bioeconomy and is the initiator of the National Bioeconomy Panel (NBP). The NBP works within the framework of political objectives at the national, European, and international levels. Examples include Agreement on the green transition in agriculture, Green Deal, Fit for 55, Strategy for PtX, and carbon capture and storage. It is the Minister for Food, Agriculture, and Fisheries who decides on which theme the NBP must prepare recommendations to the government. The minister makes the decision after dialogue and reconciliation of expectations with the chairman of the panel and the inter-ministerial steering group. The NBP sets up a thematic business group that corresponds to the theme being addressed. The company group can consist of 5-10 companies. The business group is appointed by the panel’s chairman. The business group’s role is to inspire and challenge the panel during the work on a theme. The cross-ministerial steering group consists of a representative from the Ministry of Food, Agriculture and Fisheries, The Ministry of the Environment, The Ministry of Industry, Business, and Financial Affairs, the Ministry of Higher Education and Science and Ministry of Climate, Energy and Utilities. The Ministry of Food, Agriculture and Fisheries is chairman of the group. The steering group meets as at least once a year and is responsible for the government’s feedback on the panel’s recommendations. The NBP is served by a cross-ministerial secretariat under the leadership of the Ministry of Food, Agriculture and Fisheries with the participation of employees from the Ministry of Food, Agriculture and Fisheries, the Ministry of the Environment, The Ministry of Industry, Business, and Financial Affairs, the Ministry of Higher Education and Science and the Ministry of Climate, Energy and Utilities The NBP recommendation as the number 1 priority is to draw up a national bioeconomy strategy for Denmark, which sets clear political goals and creates a framework for [Titel] Page 148 of 353 cooperation with other countries that must ensure Denmark plays a central role in the global circular bioeconomy (NBP, 2022). The Danish Chamber of Commerce has long called for a bioeconomy strategy that will be able to create a long-term and good framework for public and private investments. The policy-making process in Denmark has until now focused on green transition in the agriculture and fishery sector and there is a need for a broader approach for example biosolutions, and sustainable materials for textiles and packaging. It is expected that the Ministry of Industry, Business, and Financial Affairs will take the lead in developing the bioeconomy area in the future. They work to strengthen the Danish position within green technologies, and this is done by • Strengthen the framework to produce green technologies in Denmark. • Investment in bioeconomy via regional funds. Focus areas include lighthouse projects (e.g., Biosolutions Zealand) and thematic calls (e.g., circular economy 2023 – approximately EUR 27 million (DKK 200 million)) • Strengthen the conditions for Danish SMEs and the ability of companies and entrepreneurs to develop, adapt, and innovate. [Titel] Page 149 of 353 4.2.2 Role of stakeholder involvement in bioeconomy policy making Denmark is a democratic country with long traditions of inviting stakeholders around the table to listen to good arguments, learn from, and negotiate needs and wishes in policy making. In 2019, the government set up 13 climate partnerships, which were to come up with proposals for initiatives that can contribute to the government’s climate objective of a 70% reduction in the emission of greenhouse gases in 2030 compared 2019. In the partnership for the food and agriculture sector, Jais Valeur, Group CEO at Danish Crown, was the chairman with the Danish Agriculture & Food Council (an interest organization representing farmers, food firms and the agroindustry) as secretariat for the partnership. The partnership, which represented agriculture, aquaculture, forestry, process industry and consumption, discussed and selected several concrete initiatives divided into the categories of agriculture, aquaculture, forestry, food processing and consumers. The recommendations from the partnership for the foodand agriculture sector formed the background for the agreement ‘Green transformation of the Danish agriculture’ (2021). In this agreement has the government, together with a broad majority of the parties in the Danish Parliament agreed on that the Danish agriculture must reduce the emission of greenhouse gases by 55-65% by 2030, the emission of nitrogen must be reduced by 10,800 tonnes in 2027 and that massive investments must be made in green technologies, which shall contribute to the green transformation of agriculture. As part of the agreement on the green transformation of Danish Agriculture of 4 October 2021 (the agricultural agreement), the NBP was relaunched by the Ministry of Food, Agriculture, and Fisheries of Denmark. The members of the NBP (around 20) were appointed by the Ministry of Food, Agriculture, and Fisheries of Denmark and come from: • Knowledge institutions (Roskilde University, Aalborg University, Aarhus University, University of Copenhagen, Technical University of Denmark, Danish Technological Institute), • Trade organizations (Confederation of Danish Industry, Danish Chamber of Commerce, Danish Forest Association, National Ecological Association, Green Power Denmark, 3F-United Federation of Workers in Denmark), • Industry representatives (Arla Food Ingredients, Topsoe), • Consulting companies (LLa-Bio-Economy), • National cluster organisations (Food & Bio Cluster Denmark), [Titel] Page 150 of 353 • NGOs (3F, Denmark’s Nature Conservation Association). The mandate was to assess whether Denmark could achieve a 7.4 million CO2 reduction in 2030 by • Increasing the national protein production. • Developing new biomaterials. • Implementing recommendations described in the Agricultural Agreement. The recommendations that were submitted to the Minister of Food, Agriculture, and Fisheries in September 2022 were a proposal for a concrete development of the seven principles on which the Agricultural Agreement is based: • Agriculture must be developed and not dismantled. • Agriculture must be adjusted to be more climate and environmentally friendly while economically sustainable. • Agriculture’s development of greenhouse gases must be reduced as much as possible, considering the continued sustainable development of the industry, the competitiveness of Danish agriculture, healthy public finances, employment, cohesion, and social balance. • Discharge of nutrients must be reduced to improve the aquatic environment. • Agricultural production must take place with consideration for nature and biodiversity. • Agriculture must ensure sustainable framework conditions and retention of jobs in all parts of the country. • Agriculture must continue to create jobs and contribute to producing good, healthy, climateand environmentally friendly and safe food and thereby maintain its decisive position in Danish exports. To support the work in NBP, scenarios have been drawn up for bioresources for a green transition, to which Aarhus University, the University of Southern Denmark, and Copenhagen University have contributed. The scenarios form the basis for the recommendations on prioritizing bioresources for the green transition. The feedback from the members of the NBP is that the Ministry of Food, Agriculture, and Fisheries listens to recommendations. As an example, based on recommendations from NBP, GUDP has invested over EUR 3 million (DKK 25 million) in demo and test facilities. [Titel] Page 151 of 353 In 2023, NBP was given a new task by the Minister of Food, Agriculture, and Fisheries to assess how to make better use of biorefining and cascade utilization including the need for new supply chains. 4.2.3 Dealing with goal conflicts Denmark is only a small part of the global bioeconomy, but in the lead when it comes to the intensity of agricultural land use and production. Of the total Danish land area of 4.3 million hectares (ha), there are currently 2.6 million ha. agricultural land (60.5%). Of these, some 80% are used to produce fodder for livestock. At the same time, Denmark has formed comparatively ambitious policies for a translation to renewable energy, including bioenergy, which are all policies that can increase pressure on land use and crop production systems. Several conflicts exist and new conflicts may arise with the increased focus on the bioeconomy transition in Denmark as • Release of agricultural land for both climate measures and pure nature and biodiversity purposes • Lack of carbon from biomass to ensure the transition from fossil fuels to bioenergy. To address the conflicts of interest inherent in the release of agricultural land, the government has taken the initiative to establish a partnership with agriculture, the food sector, nature organizations, consumer organizations, and municipalities. They aim to come up with a proposal for an overall vision plan for agriculture and address the goals for land use for agriculture, nature, renewable energy, etc. Recommendations are expected to be available at the end of 2024. The government also plans to establish an inter-ministerial collaboration to ensure better spatial planning (committee on spatial planning). In the first instance, the government awaits the recommendations from the partnership on a vision plan for agriculture and then takes a position on the committee for holistic planning for land use in the open country. Another approach being debated is the reduction of the need to produce as much fodder in Danish agriculture – which is a political issue. Around 80% of the agricultural land is used for fodder production (pigs and cattle). An implication is that animal production will decrease and more focus could be dedicated to plant food. This transition could be a policy instrument to reach climatic goals but will dramatically change the jobs and the food processing industry. [Titel] Page 152 of 353 In addition to the biogenic carbon capture and utilization, direct capon capture and storage are needed to balance the Danish Carbon utilization by 2050. Competition is not only concerning land use. It is expected competition concerning the utilization of biogenic carbon resources /biomasses for construction/building materials, plastic, packaging, energy, etc. This leads to the need that biorefining/cascading of the biomass is a key issue towards optimal bioresource utilization. High-value products should be extracted first, materials, food, and fodder next and the bulk low-value side-streams end up being used for energy and fertilizer use for the next production cycle. 4.3 Applied R&D and Technology Transfer in Denmark Higher R&D funding throughout the value chain in the Baltic Sea Region will speed up progress toward the BSR’s bioeconomy. This can be done within the Nordic/Baltic Sea Region where the NordForsk and Nordic Innovation play a particular role. 4.3.1 Policy Instruments for Applied R&D and Tech transfer According to expert interviews, Denmark benefits from one of the world’s best systems for funding opportunities. There are public options for TRL 4 – 7 activities within the bioeconomy, but there is currently no special scheme. Table 23 shows an overview of relevant public subsidy schemes for TRL 4-7 level in applied R&D. Table 23 Overview of relevant public subsidy schemes for TRL 4-7 level in applied R&D Actor/Ministry Name of policy instrument Relation to bioeconomy Focus area/technology Instrument Ministry of Food, Agriculture and Fisheries GUDP – Green Development and Demonstration Program High Danish food sector. Invests in sustainability and growth between industry and research i) Grants for applied R&D ii) Grants for networking activities [Titel] Page 153 of 353 Ministry of Food, Agriculture and Fisheries EHFAF – the European Maritime, Fisheries and Aquaculture Fund Medium Green transition in the fishery and aquaculture sector Grants for applied R&D Ministry of Environment - Danish Environmental Protection Agency MUDP – the Environmental Technology Development and Demonstration Program Medium Development and application of new environmental and resourceefficient solutions. Boost and strengthen cooperation between companies, knowledgebased institutions, and partners in EU. i) Subsidy scheme. Funding for the development, testing, and demonstration of new technologies. ii) Innovation partnership. iii) International environmental cooperation Ministry of Environment/Danish Energy Agency EUDP – Energy Technology Development and Demonstration Program Medium Demonstration of new energy technologies i) Funds work by enterprises and universities on the demonstration of energy technologies ii) GreenLabs DK [Titel] Page 256 of 353 mindset of policymakers, industries, and farmers who have been accustomed to conventional methods and may be resistant to change. Another significant challenge is the lack of skilled workforce and knowledge transfer. The bioeconomy requires expertise in fields such as biotechnology, bioinformatics and artificial intelligence, synthetic biology, agriculture, chemistry, and engineering. However, the CEE countries face a brain drain of skilled professionals, resulting in a shortage of qualified personnel needed to drive the bioeconomy forward. Moreover, knowledge transfer from advanced bioeconomy countries to the CEE macro-region is limited, making it harder for local institutions and industries to develop the necessary skills and know-how. Lastly, there may be regulatory and political challenges that hinder the development of a bioeconomy. This includes unclear or inconsistent policies, regulations, the lack of dedicated bioeconomy strategies, missing action plans in nearly all countries of the macro-region. Overall, countries also face complex and unclearly structured publicly funded programmes and incentives related to bio-based industries can create uncertainty for investors and entrepreneurs. Harmonizing regulations and creating a favourable policy environment that promotes and incentivizes bio-based industries can help overcome this challenge. The missing monitoring system to indicate the benefit of bioeconomy, which illustrates that the bioeconomy is not a priority in the countries of the region, is one of another key obstacles. Within the ShapingBio project and others, there is an effort to capture several partial indicators, but the complete picture is missing. A macro-regional Bioeconomy Observatory is missing. [Titel] Page 257 of 353 6 Macro-Region Western 6.1 State of Play of the Bioeconomy in the Western Macro-Region The western macro-region is composed of seven countries: Austria, Belgium, Germany, France, Ireland, Luxembourg and the Netherlands, see Figure 75. Figure 75. Countries of Western macro-region. Source: mapchart.ne (2023). The countries of the western macro-region represent 29.36% of the total land area of the EU-27. France is the largest country in the EU and Luxembourg is placed in the last position compared to the rest of the countries. Regarding the number of inhabitants, the western macro-region accounts for 43.68% of the total population of the EU-27. Germany and France are ranked at the top. However, Luxembourg and Belgium, are [Titel] Page 258 of 353 placed in the last positions in terms of the number of inhabitants. Details about Area and inhabitants with regards to the share are found in Table 36. Table 36 Area and inhabitants of western Macro-region Country Area (sq. km) Share of EU-27 Inhabitants (2022) Share of EU-27 Austria 82,519 2.01% 8,978,929 2.01% Belgium 30,452 0.74% 11,617,623 2.61% Germany 353,296 8.61% 83,237,124 18.63% France 633,886 15.44% 67,871,925 15.19% Luxembourg 2,586 0.06% 645,397 0.14% Ireland 68,655 1.67% 5,060,004 1.13% Netherlands 34,188 0.83% 17,590,672 3.94% Total MR 1,205,582 29.36% 195,001,674 43.68% Total EU-27 4,103,987 100% 446,735,291 100% Source: Eurostat Western Euope is the region with the strongest economy in EU. High GDP and low inflation rates are the main characteristics. Additionally the National Depth is relativelly low (even very low in some countries e.g. Natherlands, ireland). The GDP growith is low and this is due to the already high reached levels but also due to the geopolitical dynamics dominatng Europe in general. Surprisigngly the unemplyment rate is relativelly high and growing but that also be due to external and societal factors (e.g. emigration). Table 37:Economic situation in the Western Macro-region [Titel] Page 259 of 353 GDP (b€) GDP Growth (%) Inflation Rate (%) Unemploy ment Rate (%) Balance of Trade (m€) National Depth (% of GDP) Austria 516 -0.6 1.9 5.5 609 81.6 Belgium 623 1.2 3.2 5.5 -375 108.0 France 3031 1.2 1.3 7.6 -7666 112.1 Germany 4456 -0.3 2.2 3.5 14 61.9 Ireland 546 2.9 1.0 4.1 9865 42.8 Luxembo urg 86 1.2 0.8 5.9 0 26.8 Netherla nds 1118 1.7 4.1 3.7 13003 43.2 Source: Eurostat 6.1.1 Production and industrial use of biomass In the following chapter the primary production supply and the demand for the use of biomass, as well as the biomass flows are illustrated. Primary Production In the primary sector, which encompasses agriculture, fishing, and forestry, agriculture stands as the predominant force in the economies of the nations within the western macro-region. As per the 2020 data provided by the Food and Agriculture Organization (FAO), the countries of Western Europe boast a collective arable land area spanning 6896.7 sq. km (FAO, 2020). Nonetheless, as depicted in Figure 76, which shows the amount of agricultural land, there has been a gradual decline in recent years in the area of cultivable land. The decline results from suboptimal agricultural practices damaging soil fertility, compounded by rising population and resource demands. [Titel] Page 260 of 353 Figure 76. Arable land (hectares) in Western Europe (2020). Source: Food and Agriculture Organization (FAO). Figure 77 and Figure 78 pertain to Biomass Production within Primary Production Systems, encompassing agriculture, fishery, and forestry. The total biomass supply sourced from agriculture, forestry and fishery is around 512 245 tonnes of dry matter within Western Europe (see further details in Figure 81). Within the Western macroregion, the agriculture sector takes the lead in contributing to the majority of biomass production. Presently, a Western macro-region country, Austria, is placing a significant emphasis on wood-based bioeconomy, due to its strong reliance on the forestry sector within its economy. As a result, it is anticipated, that the proportion of biomass production derived from wood sources will experience growth in the forthcoming years. [Titel] Page 261 of 353 Figure 77. Biomass Production from Primary Production Systems in Western Europe (last Available data). Source: Datam JRC, European Commission. Figure 78. Biomass Production from Primary Production Systems in Western Europe (2016) Source: Datam JRC, European Commission. [Titel] Page 262 of 353 Use of Biomass In the western macro-region, during 2017, a total of 340,000 tonnes of biomass (dry matter) from agricultural and woody sources were consumed for the production of energy, materials, and food. This data represents 28.82% of the total biomass consumption in the EU-27, see Figure 79 and Figure 80. Clearly, the highest demand among the countries in the western MR coincides with those that have a larger area and a higher population. In these countries, biomass is primarily used for food and feed production (68%), but there is also significant use for energy production (14%) and biomaterials (16%). As can be seen from Figure 80 Austria differs from the average with much lower percentage (40%) on food and feed production and much higher amount for biofuels over 40% and a slightly higher percentage for biomaterials (19%). Figure 79. Total biomass consumption by countries in Western Europe (2017). Source: Datam JRC, European Commission. [Titel] Page 263 of 353 Figure 80. Biomass consumption for product categories in countries in Western Europe (2017). Source: Datam JRC, European Commission. Biomass Flows Figure 81 provides a total overview of the latest biomass flow data in Western Europe. 29 As mentioned earlier, the biomass supply originates from the agriculture, forestry, and fisheries sectors and undergoes conversion into various products related to food and feed, bioenergy, and biomaterials. For the biomass consumption a high amount of agricultural biomass is lost or its usage is unknown in terms of its consumption. This amount even exceeds the net import values of about 17%, making the Western macroregion a net importer of biomass. 29 Slight deviations tot he figurs above possible, due to partly different reference years and additional attribution steps of data [Titel] Page 264 of 353 Figure 81. Biomass Flows in Western Europe (2023). Source: Own compilation based on data from Datam JRC, European Commission. 6.1.2 Industrial deployment of bioeconomy and economic relevance 6.1.2.1 Industrial deployment Open-Access Pilot Plants Regarding open-access pilot and demo facilities, the Pilots4U network database shows a comparably high availability of those facilities compared to the other MR. All larger MR countries have at least a few facilities. [Titel] Page 265 of 353 Figure 82. Distribution of number of open access pilotplants in Western Europe (2023). Source: Pilots4U network. Biorefineries The bio-based industry within the EU is undergoing rapid development, with a notable concentration of biorefineries when compared to other regions across the continent. In the western macro-region alone, there are 1,157 facilities, constituting approximately 49% of the total 2,362 biorefineries within the EU-27, as is illustrated in Figure 83. When categorizing bio-based industry facilities based on the source of their feedstock, those primarily utilizing raw materials from the primary sector, specifically forestry and agriculture, exhibit a notable predominance. Conversely, the proportion of feedstock sourced from marine origins is considerably lower, as can be seen in Figure 84. Which is not surprising, since there is only a low share of biomass from marine sources (as could be seen in Figure 77, Figure 78, Figure 81). Again for Austria it differs, as already explained above and it does fit to their abundance of wood. [Titel] Page 272 of 353 Figure 92. Value Added per bioeconomy sector in Western Europe (2008-2020). Source: Datam JRC, European Commission. 6.1.3 Actors 6.1.3.1 Academia, Research and Development In the Western macro-region, a robust and diverse network of research and development (R&D) institutions plays an active role in advancing research and innovation in the field of bioeconomy. These institutions encompass universities, academies, public research institutes, and departmental research organizations, each contributing significantly to the progress in this vital domain. Leading applied research, universities and research institute have defined specialities related to the regional biomass of the countries and are often related to the ministers of agriculture, energy and environment. The good position of this macro-region in the bioeconomy field is also strongly linked to its life sciences roots that powerfully fuelled the academic knowledge on fundamental research like synthetic biology and thus empowered the applied research. Due to this approach, the bioeconomy related research in the Western Region is engaging with a high technological approach. Notably, several German institutions stand out prominently within this collaborative effort, forming a strong ecosystem dedicated to bioeconomy-focused R&D. Esteemed applied science organizations such as the Helmholtz Centre for Environmental Research (UFZ) and the Research Centre Jülich (FZJ) are noteworthy contributors. Furthermore, the Fraunhofer Gesellschaft, with divisions like Fraunhofer IGB, Fraunhofer CBP, Fraunhofer LTZ CBS, and Fraunhofer IFF, holds a central role driving the strategic bioeconomy research. Universities such as the Research Centre for Bioeconomy [Titel] Page 273 of 353 (University Hohenheim) and the Chair for Production and Resource Economy (Technical University Munich) actively enrich the research landscape. Belgium also makes significant contributions to bioeconomy research, with institutions including Instituut voor Biotechnologie) actively engaged in this dynamic field. Leading universities such as Ghent University, KU Leuven, University of Antwerp, Vrije Universiteit Brussel, and Hasselt University further enhance the nation’s bioeconomy endeavours. Austria’s bioeconomy research landscape is characterized by non-university research institutions, including Österreichische Forschungsförderungsgesellschaft (FFG), Institut für Industrielle Ökologie, and Österreichische Akademie der Wissenschaften (ÖAW). Initiatives like BIOS Science Austria and Christian-Doppler-Labore are fully dedicated to bioeconomy research, while the Bundesforschungszentrum für Wald plays a pivotal role in advancing knowledge relevant to the bioeconomy. France boasts a diverse array of institutions with a strong focus on the bioeconomy, including INRAe (National Institute for Agricultural Research), CNRS (National Centre for Scientific Research), and CEA (Alternative Energies and Atomic Energy Commission) that diligently foster research and innovation within the bioeconomy sector. In the Netherlands Key academic institutions like Wageningen University & Research, TU Delft, and the Energy Research Centre of the Netherlands (ECN-TNO) play pivotal roles in advancing bioeconomy research. Luxembourg’s bioeconomy research efforts are primarily led by institutions such as the Luxembourg Institute of Science and Technology (LIST) and Environmental Research and Innovation (ERIN). The University of Luxembourg also actively contributes to studies related to the bioeconomy. Ireland’s bioeconomy research is spearheaded by applied science organizations such as BIOrbic which is the national bioeconomy research centre, Teagasc (Agriculture and Food Development Authority), and the Marine Institute. Universities like UCD and Munster Technological University are integral players in this endeavour. Additionally, various technological platforms, including the Dairy Processing Technology Centre (DPTC), Irish Manufacturing Research (IMR), Food for Health Ireland (FHI), Meat Technology Ireland (MTI), and VistaMilk, substantially enhance bioeconomy research and innovation in the country. Collectively, these institutions, despite their varying structures and areas of focus, drive bioeconomy-related R&D in the Western macro-region, making significant contributions to the advancement of sustainable and innovative solutions within this [Titel] Page 274 of 353 crucial field. In the Western macro-region, the bioeconomy-relevant R&D landscape encompasses a diverse array of institutions in terms of number, types, and sizes. Showcase: France can be mentioned as a particular showcase featuring a substantial presence of R&D institutions specializing in bioeconomy-related research. While specific quantitative data regarding the precise number and dimensions of these institutions is not available, the qualitative context underscores the vibrancy of bioeconomy research within France. Furthermore, in a comparative analysis with R&D institutions across the entire European Union (EU), France’s contributions to bioeconomy research emerge as highly significant. Notably, in 2018, French publications accounted for 2.8% of the global bioeconomy research output. This figure, although showing a gradual decline since 2005, underscores France’s active participation in the bioeconomy research sphere. When contextualized within the broader EU framework, France’s position in bioeconomy research remains noteworthy. Its 2.8% share of global publications demonstrates its competitiveness and substantive involvement in the EU’s bioeconomy research landscape. Furthermore, France’s commitment to international collaboration is evident, with approximately 55% of its bioeconomy research publications co-authored with researchers from other nations. This international engagement serves to amplify France’s standing and influence within the global bioeconomy research community, emphasizing its dedication to advancing this pivotal field on a broader, international scale. Within the Western macro-region, research and development initiatives in the bioeconomy domain manifest sector-specific characteristics and emphases, corroborating the observations delineated in the state of play and industry chapters. This regional scrutiny underscores how diverse countries in the Western macro-region underscore distinctive sectors and facets within the broader ambit of the bioeconomy domain. For instance, Austria places substantial emphasis on its wood industry, with noteworthy initiatives like the Austrian Wood Initiative assuming a pivotal role in addressing climate protection and decarbonisation. Simultaneously, agriculture and forestry constitute integral constituents of Austria’s bioeconomy landscape. R&D entities, including Joanneum Research Forschungsgesellschaft and the Austrian Institute of Technology, ardently engage in bioeconomy-focused research pertaining to these specific sectors. Furthermore, the Forum Holzbau convenes international wood bioeconomy forums, spotlighting themes like individual layer fabrication, sustainable packaging, and biochemicals. These sector-specific foci align with [Titel] Page 275 of 353 Austria’s dedicated endeavours to advance bioeconomy endeavours, notably in the context of its well-established wood and forestry sectors. In Belgium, the panorama of bioeconomy R&D activities mirrors precise emphases within various sectors, encompassing sustainable agriculture, bio-based materials, circular economy, renewable energy, plant biotechnology, microbial biotechnology, marine resources, forestry, and food. Distinct research institutions in Belgium specialize in these sectors, collectively enriching the comprehensive tapestry of bioeconomy research. These sector-specific priorities underscore Belgium’s holistic approach to addressing multifarious facets within the bioeconomy spectrum. Contrarily, Germany channels its focus toward applied research within the bioeconomy, emblematic of a pragmatic, industry-oriented approach. This orientation is congruent with Germany’s reputation for its robust commitment to innovation and technological advancement. Similarly, in Ireland, the emphasis is on applied research with an emphasis on agriculture and food production, chemicals and biotechnologies as well as bio-based materials. France, conversely, delineates sector-specific characteristics within its bioeconomy R&D landscape. This is notably discernible in its emphasis on agriculture and food production, wherein agriculture serves as a prominent wellspring of biomass. Furthermore, research activities are prominently centred around biochemistry and industrial biotechnologies, spanning domains such as green chemistry and pharmacology. The accentuation on bio-based materials and extraction reaffirms France’s sector-specific proclivities. France’s strategic alliances between research stakeholders and industry counterparts encompass both fundamental and applied research, underscored by its steadfast commitment to advancing bioeconomy pursuits within these specified sectors. In the Netherlands, the research landscape is primarily focused on biomass valorisation, energy and waste reduction reflecting the country’s policy priorities. Lastly, Ireland’s bioeconomy R&D efforts encompass a heterogeneous array of sectors, encompassing agriculture and food production, chemicals, biotechnologies, and biobased materials. This multifaceted approach aligns with Ireland’s comprehensive strategy for bioeconomy development, addressing diverse sectors to foster sustainability and innovation. In summation, the bioeconomy R&D landscape in the Western macro-region delineates sector-specific attributes and focal points that resonate with the meticulous findings articulated in the state of play and industry chapters. Each constituent country within the region adapts its bioeconomy initiatives to align with its [Titel] Page 276 of 353 distinctive strengths and priorities, collectively contributing to the broader progression of bioeconomy endeavours. Collectively, the Western macro-region demonstrates a rich tapestry of bioeconomy knowledge centres, research competencies, and specialized academic programmes, each contributing to the advancement and promotion of bioeconomy-related endeavours while aligning with their unique strengths and priorities. As a matter of fact, bioeconomy is a broad topic involving broad cross-specialities and creating a full encompassing bioeconomy degree would be unrealistic to have value for all applied fields. Specialization in their own country strength is then prioritized, bioeconomy is on top of each sector branch (agronomy, energy, industry, marine etc.). Take for example Austria. Austria has taken proactive steps with the establishment of the “Initiative Bioeconomy Austria”, which actively nurtures and advances bioeconomy-related initiatives. Moreover, Austria’s FH Campus Vienna offers specialized academic programmes. Notable among them are “Verpackungstechnologie” (Packaging Technology) at the undergraduate level and “Packaging Technology and Sustainability” at the graduate level. Across the border in Belgium, “Bio.be” serves as a prominent bioeconomy knowledge hub, facilitating collaboration among companies, research institutions, and stakeholders within the life sciences and biotechnology sectors. However, Belgium does not focus on one speciality and provides masters’ degrees in bioengineering, with specializations available in Molecular Biotechnology, Environmental Technology, and Food Technology. Germany, another regional player, distinguishes itself with several universities offering specialized degree programmes in bioeconomy. Noteworthy institutions include the University of Hohenheim, Technical University Munich, University Greifswald, and University Göttingen. These institutions provide comprehensive bachelor’s and master’s programmes covering Bioeconomy, Forest System Management, and Forestry Bioeconomy. Turning our attention to France, the nation promotes bioeconomy development by encouraging research institutions like INRAE to focus on this field. INRAE, for instance, has established a thematic research area dedicated to the bioeconomy, conducting interdisciplinary research endeavours and identifying eleven key challenges. Link to these segmentations, specific bioeconomy-focused degree programmes exist in different ways, combining dedicated & specialized school in bioengineering across the country and universities with regional specialities link to near-available biomass and their own research activities. [Titel] Page 277 of 353 Netherlands, multiple universities and research institutions such as TU Delft and Wageningen University have dedicated centres that foster investments in the bioeconomy. Moreover, Wageningen University is planning to initiate a new MSc programme on circular bioeconomy. Ireland, within the region, stands out for its substantial strides in bioeconomy education and research. Initiatives like BioBEC Bio-based Industries, and BiOrbic, Ireland’s national bioeconomy research centre, play pivotal roles in education and the sustainable development of a circular bioeconomy. Notably, Ireland offers a Master of Science programme in Circular Bioeconomy with Bio-based Business, a collaborative effort involving institutions such as IT Tralee, UCD, and Teagasc. The Western macro-region exhibits a degree of homogeneity in its collective commitment to research and development within the bioeconomy domain. Common characteristics shared across the region include a shared emphasis on advancing bioeconomy-related R&D, promoting interdisciplinary research approaches, and fostering international collaboration. These shared traits underscore the region’s dedication to harnessing biological resources and sustainable practices for economic and environmental gain. However, there are notable differences among countries within the Western macroregion in the context of bioeconomy R&D. These distinctions primarily revolve around sectoral priorities, degree of specialization, research funding, policy frameworks, and international partnerships. Firstly, countries within the region exhibit varying sectoral priorities within the bioeconomy. For instance, Austria places significant emphasis on its wood industry, while Belgium focuses on sustainable agriculture and biotechnology. These sectoral disparities align with each country’s unique economic structures and strengths. Secondly, research funding levels and sources differ significantly between countries. While some nations may allocate substantial public and private funding to support bioeconomy research, others may have more limited resources available for such endeavours. Furthermore, the regulatory and policy frameworks related to the bioeconomy can vary widely between countries, influencing the direction and pace of bioeconomy R&D and implementation. Lastly, while international collaboration is a shared characteristic across the Western macro-region, the extent and nature of these partnerships can differ. Some countries may have more extensive global collaborations, while others may primarily engage with neighbouring nations. [Titel] Page 278 of 353 In conclusion, the Western macro-region demonstrates a certain level of homogeneity in its overarching commitment to bioeconomy R&D, interdisciplinary research approaches, and international collaboration. Nevertheless, significant differences exist among countries regarding sectoral priorities, specialization levels, research funding, policy frameworks, and international partnerships. These distinctions arise from each nation’s distinct economic, environmental, and research landscape, highlighting the region’s diversity in bioeconomy R&D pursuits. 6.1.3.2 Industry Across the Western macro-region, a dynamic and diverse bioeconomy landscape thrives, characterized by a multitude of companies actively participating in bioeconomy-related activities. These companies encompass a wide range of types, sizes, and sectors, collectively illustrating the region’s comprehensive engagement in the bioeconomic domain. It is notable, that the large companies taking part in the bioeconomy are nondedicated, the majority do keep their conventional business line and are either transitioning or building a side department to enter the bioeconomy area. At the opposite, SME and start-ups are mainly dedicated to bioeconomy. Austria, for instance, features a mix of both dedicated bioeconomy companies and non-dedicated entities. Notable participants such as “Sappi Papier Holding GmbH” and “Bioraffinerie in Utzenaich” are deeply involved in bioeconomy-related endeavours. Additionally, organizations like “Wirtschaftskammer Österreich” and “Cleantech Cluster Umwelttechnik und Energietechnologie” make meaningful contributions to the bioeconomy despite their broader interests. These companies vary in size, with small and medium-sized enterprises (SMEs) like “Ecover” coexisting alongside larger entities like the “Lenzing Group”. Austria’s bioeconomy sectors span recycling, plastics, wood, and biotechnology, with a notable presence in the biotech and pharmaceutical sector. Similarly, Belgium hosts a diverse range of bioeconomy companies, including SMEs like “Ecover”, “B4Plastic”, and “EcoSynth”, specializing in eco-friendly products and chemicals. Larger corporations such as “Solvay” and “Galactic” play pivotal roles, particularly within the chemical sector. These companies operate across various sectors, encompassing bio-based cleaning products, chemicals, energy, and ecoplastic products. Germany’s bioeconomy landscape is characterized by a multitude of dedicated biotech companies and multinational corporations actively engaged in bioeconomy- [Titel] Page 279 of 353 related activities. Notably, French multinationals also contribute significantly to Germany’s bioeconomy ecosystem. Irish companies of varying sizes, including both major industrial players and SMEs, collectively drive the country’s bioeconomic endeavours. Key industry leaders such as “Glanbia”, “Nuritas” and “BioMarine Ingredients” are prominent within this sector. Luxembourg’s bioeconomy efforts include companies specializing in biomass combustion, gasification, waste management, digestible processing, and the production of natural construction materials. These companies, which differ in size, demonstrate a collaborative coexistence, with smaller entities like “Sosil Concept” complementing larger counterparts with broader market reach. The Netherlands, on the other hand, hosts a diverse array of bioeconomy companies involved in sectors such as chemicals, coatings, lactic acid production, biofuels, and bio-based products. Companies of varying sizes, including major corporations like “DSM” and “AkzoNobel”, as well as innovative players like “Avantium”, actively contribute to the country’s bioeconomic activities. In the bioeconomy landscape of the Western macro-region, specialization within specific sectors is apparent, and the coverage of various stages of the bioeconomic value chain varies across countries. Austria stands out for its specialization in the wood sector, with initiatives like the “Austrian Wood Initiative” and the presence of the “Bioraffinerie in Utzenaich” underscoring its strengths in this domain. Simultaneously, Austria maintains a comprehensive approach to the bioeconomy by actively engaging in primary production activities, including agriculture, forestry, and water management. In contrast, Belgium presents a well-rounded bioeconomy landscape, showcasing strengths across multiple sectors. These encompass biotechnology, biopharmaceuticals, agri-food, agriculture, renewable energy, bioenergy, chemicals, bio-based materials, and agricultural biotechnology. Belgium’s diverse bioeconomic portfolio implies a broad coverage of various sectors within the bioeconomy, extending across various stages of the bioeconomic value chain. France has cultivated significant expertise in key fields of the bioeconomy, showcasing specialization in areas such as alternative proteins, biochemistry, industrial biotechnologies (green chemistry), pharmacology, bio-carburants, bio-energies, and bio-sourced molecules and materials. This specialization underscores France’s proficiency in specific segments of the bioeconomy value chain, spanning from research and development to production and application. [Titel] Page 280 of 353 Luxembourg places strategic emphasis on certain industry sectors within its bioeconomy landscape, with a particular focus on energy, waste management, biobased construction materials, and polymers. This strategic emphasis reflects Luxembourg’s commitment to addressing specific segments of the bioeconomic value chain, with a strong emphasis on sustainability and resource management. With expertise in agri-food, forestry, chemicals and bio-based materials segments of bioeconomy, collaborations between research institutes and industry In Ireland are in line with the country’s strategic focus. In Netherlands, there is more emphasis on biomass valorisation, reducing waste and energy. In the Western macro-region certainly there exist prominent and dedicated industry and business associations, along with influential clusters, that are deeply committed to advancing the bioeconomy. These organizations play pivotal roles in shaping the bioeconomic landscape and fostering its growth and development. There is a certain homogeneity of the cluster approach and good practices in the western region, where the support is mainly sectoral and speciality based and tend to be more regional than country wide. Nonetheless, some initiatives from clusters are set in place to gain a broader scope and wider geographical impact. Austria, for instance, features noteworthy associations, including the “Association of the Austrian Wood Industry” and the “Association of Austrian Paper Industry”, both specializing in the wood and paper sectors, respectively. Moreover, the “Österreichische Industriellenvereinigung” and the “Fachverband der Chemischen Industrie (FCIO)” are instrumental in championing the bioeconomic agenda. Austria also hosts vital organizations like the “Österreichischer Biomasse-Verband” and the “Kompostund Biogasverband” with dedicated focus on biomass and biogas initiatives. Belgium showcases a comprehensive array of influential bioeconomy associations and clusters, including “CATALISTI”, “Flanders’ Food”, “The Blue Cluster”, “TWEED Cluster” among others. These entities span a diverse range of sectors within the bioeconomy, facilitating collaborative efforts and driving innovation. Additionally, “ValBiom” and “GreenWin” significantly contribute to Belgium’s bioeconomic landscape. France stands out with its “Bioeconomy4Change (B4C / ex-IAR)” cluster, which is the sole competitiveness cluster entirely dedicated to the bioeconomy. This cluster assumes a central role in shaping the bioeconomic landscape in France, specializing in key segments of the sector, from research and development to production and application. [Titel] Page 281 of 353 In Ireland, a number of clusters exist such as Irish Bioeconomy Foundation, which works on fostering the transformation of natural resources to competitive, high-value products and Circular BioEconomy Cluster, which promote, that is composed of diverse stakeholders working on fostering bio-based value chains and unlocking business opportunities. In the Netherlands, clusters such as Biotech Campus and The Centre of Expertise Biobased Economy are active within bioeconomy applied research. Germany hosts associations such as “BIO Germany”, “OVID Association”, “Association of Chemical Industry (VCI)”, and the “German Industry Association Biotechnology (DIB)” all actively engaged in bioeconomy-related endeavours. These associations foster innovation, collaboration, and knowledge exchange within the bioeconomic domain. Luxembourg underscores its commitment to the bioeconomy through innovation clusters managed by Luxinnovation, including the “Luxembourg EcoInnovation Cluster”, “Luxembourg Wood Cluster”, and “Luxembourg Materials & Manufacturing Cluster”. These clusters, alongside associations like the “Biogasvereenegung a.s.b.l.” and “Neobuild”, contribute significantly to Luxembourg’s bioeconomic landscape, emphasizing sustainability and resource management. These influential industry and business associations, together with dedicated clusters, collectively serve as catalysts for innovation, research, and collaboration, thereby advancing the bioeconomy throughout the Western macro-region. In the Western macro-region, there is a collective commitment to diversify bioeconomy sectors, including biotechnology, renewable energy, sustainable agriculture, and bio-based materials. This reflects a mutual understanding of the bioeconomy’s potential to address both environmental, economic and societal challenges. Collaboration in bioeconomy research and development is widespread, with universities, research institutions, and businesses frequently partnering to advance bioeconomic innovations. This collaborative ethos is a pervasive trait within the Western macro-region. Many countries in the region receive government support and funding for bioeconomy-related initiatives. Governments acknowledge the pivotal role of the bioeconomy in driving economic growth, fostering sustainability, and generating employment opportunities. Consequently, there is a degree of alignment in policy frameworks aimed at promoting bioeconomic activities. Nevertheless, noticeable distinctions also emerge. Each country tends to exhibit specialization in specific facets of the bioeconomy. For example, Austria specializes in the wood and paper sectors, while Belgium excels in multiple sectors, including biotechnology, [Titel] Page 288 of 353 far, only a key points for a national biomass strategy has been published. Also in the other countries, bioeconomy strategy development and implementation is shared between different ministries. In France, for example, bioeconomy policy is not only shaped by education and research and the food and agriculture policy domain, but also economy and finance, territorial cohesion and the ministry for ecological and inclusive transition share responsibilities in the bioeconomy development in France. The strategy of France 33 focusses mainly on the non-food part of the bioeconomy and does not cover circular economy, as food, nutrition and circularity is already subject of other related strategies. Similar responsibilities can be observed in other countries and indicates that an increasing need of horizontal policy coordination between the different ministries is required. In some countries, such as Ireland and Germany, (partly) coordination mechanisms have been already established. In Germany, the interministrial working group (IMAG) that was established in 2013, is responsible for the information exchange (including cross-cutting themes) and coordination of the members of the group (Deutscher Bundestag, 2019), facilitating horizontal coordination between the affected ministries. In the last decade, several ministries of the German government became members of the group, including the ministries for the Environment, for development policy or for economic affairs. In addition, the German Bioeconomy Advisory Council, which consist of different bioeconomy experts and representatives, has the role to advise the federal government for the development of the bioeconomy and give regular recommendations on the policy process 34 . In the last publication, the advisor council claimed, for example, that bioeconomy policy should be horizontally more aligned between the responsible ministries (German Bioeconomy Council, 2023a). Vertically, also working groups between the federal and its state governments exist, coordinating bioeconomy activities between both territorial levels. An interesting case is Ireland, where, among the department of Agriculture, Food and Marine, and the department of Communication, Climate Action and Environment, even the Department of the Prime Minister is responsible for the bioeconomy policy in Ireland. Similar to the German case, also a Bioeconomy Implementation Group (BIG) has been established, which is jointly chaired by the Departments of the Environment Climate and Communications (DECC) and Agriculture, Food and Marine (DAFM) (Government of Ireland, 2023a). The implementation group has the task to give recommendations for the development of the bioeconomy in Ireland and to improve 33 https://agriculture.gouv.fr/la-bioeconomie-nouvelle-vision-du-vivant 34 https://www.biooekonomierat.de/biooekonomierat/auftrag-und-ziele.php [Titel] Page 289 of 353 coherence among all relevant sectors as it has defined by the national policy statement. In Austria on the other hand, no specific advisory council or interministrial group exist. Although also the Netherlands has not any interministrial working group that is coordinating the activities of the responsible ministries, in 2009 the interdepartmental programme Bio-based Economy (IPBBE) was launched, which aims to promote cooperation between civil society parties and actors from businesses, research and technology 35 Responsible for bioeconomy activities in the Netherlands is mainly the ministry for economic affairs that has the supervision of regulations in the area of feeds and seeds and is in charge for the guidelines for industrial research and development as well as innovation. Other ministries which have competences and jurisdictions are the ministry for the environment, the ministry for education, culture and science and the health ministry that is coordination decision-making in areas, such as Agroand medical biotechnology. 36 Table 39 Strategies and Action Plans of the Western Macro-region Country Bioeconomy Strategy/ Action Plan Responsible Ministries Austria National Bioeconomy Strategy/ Action Plan - Ministry for Education, Science, and Research (BMBWF) - Ministry for Sustainability and Tourism (BMNT) - Ministry for Transport, Innovation, and Technology (BMVIT) Belgium Only regional strategy (Flemish Bioeconomy Strategy) Departments of ministry for R&I, Agriculture, Energy France National Bioeconomy Strategy Action Plan - Ministry of Economy and Finance - Ministry of Higher Education, Scientific Research and Innovation 35 https://www.nsob.nl/denktank/overzicht-van-publicaties/multi-level-strategy-keysucces). 36 https://biooekonomie.de/themen/laenderdossiers-weltweit/niederlande [Titel] Page 290 of 353 - Ministry of Territorial Cohesion - Ministry for Ecological and Inclusive Transition Germany National Bioeconomy Strategy - Federal Ministry for Education and Research (BMBF) - Federal Ministry for Food and Agriculture (BMEL) Ireland National Bioeconomy Policy Statement Action plan (published October 2023) - Department of the Taoiseach (Prime Minister) - Department of Agriculture, Food & Marine - Department of Communications, Climate Action &Environment Luxembour g No national bioeconomy strategy No existing bioeconomy action plan Netherland s The Position of the Bioeconomy in the Netherlands - Ministry for Economic Affairs and Climate Policy Source: Own compilation. All policy strategies in the Western Macro-Region share the objectives of decarbonizing the economy, creating competitiveness or promoting a sustainable societal transformation and are in line with the defined objectives of the European Bioeconomy Strategy that has been published in 2018. Considering the coverage of the four topics that will be analysed (policy & governance, applied R&D and Technology Transfer, Cross-sectoral Collaboration, Financing) it is important to note, that these four topics differ in their extent that they are targeted in the different strategies. In Ireland for example, reinforced policy co-ordination and stakeholder engagement or sectoral coherence are especially mentioned as key pillar of the policy statement. Similar, in Germany policy alignment is addressed in the context of policy coherence, as the strategy claims for closer integration of policies and strategies. [Titel] Page 291 of 353 Contrarily, in Austria policy alignment is less communicated throughout the strategy. Only little references to the European Bioeconomy Strategy and Agenda 2030 are made. In almost every country several references to applied R&D and Technology Transfer are made in that sense that all countries promote research and innovation through increased funding in the public and the private sector or aim to further promote the cooperation of applied research organizations with companies. France can be seen as a case in point as the PIA funding programme is focusing on promoting cutting-edge technology with a total budget of EUR 52 billion. In the remaining countries of the macro-region, the bioeconomy is rather less developed as in the aforementioned cases. In the smaller countries Belgium or Luxembourg, a strategy has not yet developed. For instance, Belgium consists of three independent regions, Flanders, Wallonia and Brussels. From these regions, only Flanders has presented a bioeconomy strategy, the so-called“Bioeconomy in Flanders” so far (The Interdepartmental Working Group for the Bioeconomy, 2013). Key objectives of the strategy are the development of solutions for major societal challenges, such as climate change, the development of a sustainable economy or required structural changes in order to achieve a transition towards a post-fossil economic system (Department of Economy, 2020). In addition, the regional government of Flanders has also implemented other measures, such as the New Industry Policy in 2011, or the Flemish Materials Program in 2012, which partly addresses bioeconomy relevant initiatives. Key focal points of the Flemish strategy are its contribution to green growth, job creation or the development of the circular economy. As defined as a long-term goal, Flanders wants to become the most competitive bioeconomy region in Europe by 2030 (Department of Economy, 2020). On the other side, the two other regions have not developed specific strategic documents on bioeconomy development. Similar to Belgium, also Luxembourg has not yet developed a national bioeconomy strategy, although some actions plans of Luxembourg relate to the bioeconomy. In 2010, for example, the government published its National Action Plan on Renewable Energy, a sectoral document that is referring to biomass as one of the top performers for electricity in the future. Also the smart specialization strategy from 2017 or the strategy on the national wood cluster mentioned bioeconomy as important (Haarich et al., 2022). Regarding existing gaps it is important to highlight that only Austria, France and Ireland developed a bioeconomy action plan from the countries who has published already dedicated bioeconomy strategies. Whereas in Germany, no bioeconomy action plan exists, Austria already developed one and Ireland has been published its action plan [Titel] Page 292 of 353 during the Irish Bioeconomy Weeks 37 . Ireland’s action plan highlights the ambition to become a global leader for the bioeconomy, harnessing its natural resources and competitive advantage. The action plan is grounded on seven key pillars, addressing not only different sectors, such as agriculture, food, forestry or marine, but also circular economic deployment, research & development or claims to further improve policy integration (Bioeconomy Action Plan Consultation and Discussion Document, 2022). Additionally, the action plan highlights the ambition to increase coherent communication and outreach of the Irish bioeconomy and aims to develop a national bioeconomy strategy in the future (Government of Ireland Department of Environment, 2022). In addition, in its first report to the Bioeconomy Implementation Group, the Bioeconomy Forum stated that the regulatory system needs to be better understood and regulatory approaches to be better streamlined and harmonized 38 . Similarly, also Germany currently elaborates an action plan, submitting concrete measures for translating the objectives of the German bioeconomy strategy. The German Bioeconomy advisory council that has been assigned for supporting the process stated in its latest recommendations for actions (German Bioeconomy Council, 2023) that still Germany would lack overarching coherent bioeconomy policy at national level. The action plan of Austria aims to translate the objectives of the Austrian National Bioeconomy Strategy in concrete measures. Core of the action plan are, hence, 11 thematic areas, which are further subdivided into diverse field of actions: The thematic areas comprises topics, such as Science and Research, sustainable consumption, agriculture or forestry. For instance, the action plan aims to support sustainable and continuing timber provision through methods of forestry area planning. For each of these different measures of the thematic areas, different ministries are in the lead or are contributors. With its action plan, Austria covers multiple sectors of the bioeconomy and is broadening the application of the bioeconomy. The Action plan of France is slightly different to Austria’s as its scope is limited to the development of nonfood outlets for biomass. Bio-waste has been excluded since other sectoral policies are already dedicated to waste streams. Regional Strategies In addition to national bioeconomy strategies which have been adopted, several countries of the Western macro-region have published regional strategies. The Table 37 https://www.gov.ie/en/press-release/595e3-ministers-mcconalogue-and-ryan-publishfirst-national-bioeconomy-action-plan/ 38 https://www.gov.ie/en/publication/046ce-stakeholder-coordination-consultative-groups [Titel] Page 293 of 353 40 below shows the number of regional bioeconomy strategies in the Western-Macroregion with respect to the extent these strategies focus on the bioeconomy. Belgium and Germany are representative cases as they have the highest share of fully dedicated regional bioeconomy strategies (Haarich et al., 2022). In countries like Austria, Ireland and the Netherlands fully dedicated regional strategies do not exist, although strategies with minimum bioeconomy relations have been adopted. Regional strategies in Germany have been developed in six federal states have adopted bioeconomy strategies in their territorial jurisdiction with partly different objectives and focal points. In France, likewise, three main regional strategies exist (1) Grand Est (2) Hauts de France (3) Ile-de France. All of the three strategies share objectives, such as to develop efficient and sustainable production of regional resources or to intensify innovation and market access. In order to coordinating the different regional activities better, all three regions signed in 2018 a “biopact”, establishing more cooperation by experimenting with new public policies, encouraging innovation and strengthening interregional collaboration. Although all three strategies share common objectives, action plans and adopted measures are adapted to each of the specific characteristics of the region. Ireland, on the hand, has not yet developed any regional strategies due to the relatively centralized government administration, although it seems likely that a strategy in the southern region of Ireland might be developed in the future (Haarich et al. 2022). Regional strategies in Germany have been developed in six federal states have adopted bioeconomy strategies in their territorial jurisdiction with partly different objectives and focal points. In France, likewise, three main regional strategies exist (1) Grand Est (2) Hauts de France (3) Ilede France. All of the three strategies share objectives, such as to develop efficient and sustainable production of regional resources or to intensify innovation and market access. In order to coordinating the different regional activities better, all three regions signed in 2018 a “biopact”, establishing more cooperation by experimenting with new public policies, encouraging innovation and strengthening interregional collaboration. Although all three strategies share common objectives, action plans and adopted measures are adapted to each of the specific characteristics of the region. Ireland, on the hand, has not yet developed any regional strategies due to the relatively centralized government administration, although it seems likely that a strategy in the southern region of Ireland might be developed in the future. [Titel] Page 294 of 353 Table 40 Number of regional bioeconomy strategies in the Western Macro Region Country Fully dedicated Strong focus Minimum Content Total number Austria 0 1 7 8 Belgium (Flanders) 1 1 1 3 Germany 7 2 4 13 Ireland 0 0 7 7 Netherlands 1 1 4 6 France 3 13 2 13 Luxenbourg 0 0 0 0 Source: Own table based on Haarich et al. (2022). In addition to the regional strategies that have been described, there are also aspirations to establish joint cross-border bioeconomy strategies. One example is the Trilateral strategy for the chemical industry between Netherlands, Flanders and North Rhine-Westphalia. In 2017, the ministry of economics, innovation, digitalization and Energy of NRW, the department of economy, science & innovation of the Flemish region and the Netherlands Ministry for Economic Affairs signed the strategy to become the world’s engine for the transition towards a sustainable and competitive chemical industry cluster (Ministry of Economic Affairs, 2017). On a horizontal level, the strategy highlights the implementation of a trilateral High-Level Group (HLG) that is supported by an Inter-Ministrial Steering Group (IMSG) and thematic working groups for mobilizing the bioeconomy community in respect to the priority objectives (Ministry of Economic Affairs, 2017). For instance, the trilateral high-level group is designed to organize joint meetings of representatives from industry, science and governmental ministries. The IMSG, on the other side, consist of three involved ministries from the three regions and are coordinating strategy implementation and support the HLG. Another cross-border strategy that can be mentioned here, is the EU bioeconomy strategy for the Danube region, where some regions of Germany and Austria are [Titel] Page 295 of 353 involved. The macro-regional strategy was jointly developed by the European Commission and several countries (nine member states). Policy Instruments The Western Macro-region, incorporating Germany, Austria, Belgium, the Netherlands, Luxembourg and Ireland differ on the question, what the bioeconomy mean for them. Whereas some countries have a broad conception of the bioeconomy, others only are focused on specific sectors and still have not much developed their bioeconomies. As the bioeconomy is still a new paradigm in Europe, most of the policy instruments are located on supply-side measures and use national funding programmes to boost different sectors. In Germany, for instance, the federal ministry for education and research (BMBF) have established numerous finding programmes, which focus on different sectors or domains. In the table below, national funding programmes are listed with their respective association to the responsible ministries. As the table indicates, most of the funding activities are associated to the federal ministry of education and research (BMBF) Among those funding programmes, which have a clear focus on technical innovation in the bioeconomy, the funding programme bioeconomy as social change is unique in the German research landscape as it funds socio-economic research in the bioeconomy with a focus on social science research. The ministry for economic affairs and climate protection has only a few funding programmes, from which Industrial Bioeconomy is the only dedicated instrument in the bioeconomy. Although the federal ministry for food and agriculture had the co-lead in the development of the national bioeconomy strategy, the ministry offers only one funding programme, which specializes in renewable raw materials and aims to develop the bioeconomy in Germany further. Important to highlight is also that Germany perceives the bioeconomy as a broad concept that incorporates all relevant sectors of the economy. That is the reason why only less funding activities are specialized on specific sectors, but have a broad scope on the innovations they are funding. Table 41 National funding programmes in Germany Funding Programme Ministry Duration Bioeconomy as social change BMBF Permanent Bioeconomy International BMBF [Titel] Page 296 of 353 Model Region of bioeconomy for digitalization of plant-based value chains BMBF New generation research for the bioeconomy BMBF Strategy Process - Next generation of biotechnological production processes BMBF Permanent Ideas Competition - new products for the bioeconomy BMBF Permanent Future technologies for the industrial bioeconomy BMBF Planned Innovation areas for the bioeconomy BMBF 2016-2017 Industrial Bioeconomy BMWK Permanent High-Tech Founder Fund IV BMWK Central Innovation Programme middle class (ZIM) BMWK EXIST Funding scholarship BMWK Renewable Raw Materials BMEL Permanent Source: Own compilation. A different approach can be observed in Austria, where the bioeconomy is mainly focused on the food and timber sector. As highlighted in the Austrian bioeconomy strategy, Austria wants to position itself as technology leader for e.g. pulp and fibre products as well as saw and wood products. Austria has developed a national network programme, Bioeconomy Austria, which aims to develop a network of different actor groups and a unique bioeconomy cluster in Austria. Other related policy instrument that have been implemented in Austria, have their focal points on artificial technology (AI for Green) or Climate Change (Frontrunner, Öko-Scheck). Also in Austria, most of these policy instruments are rooted in supply-side policy tools, whereas demand-side policies seem to play no significant role in Austria. Ireland provide policy instruments, which are located in the funding domain. National funding programmes, as the Bioeconomy demonstration fund, the Circular Venture Programme or the BioConnect Innovation Centre are at the heart of supporting innovative companies and entrepreneurs with a key focus in the bieoconomy [Titel] Page 297 of 353 including biotechnological innovations. France on the other side, has established different demand-side policy instruments. For instance, France signed several laws, which are not dedicated to the bioeconomy, but are related to bioeconomic development: Law n 2016-138 against Food Waste for example aims to prevent food waste. For instance, if a grocer possesses a sailing area, larger than 400 m2, he is obliged to donate his food waste. Another regulatory measure that has been implemented in France is the Energy Transition for Green Growth Act (LTCEV) from 2015, which establishes a comprehensive list of targets and measures for low-carbon economic development. Although not directly dedicated to the bioeconomy, it outlines also bioeconomic related measures. For instance, the act wants to establish renewable energy (e.g. biomass) in more homes and wants to recycle 60% of waste by 2025. Also in Belgium, demand-side policies exist. For instance, with the prohibition of the use of certain biomass feedstocks for bioenergy, the Belgium government aims to ensure that the use of energy is regulated throughout the hierarchy of biomass feedstocks. In conclusion, it can be highlighted that in the Western Macro-Region dominate supply-side measures, such as grants for Industrial R&D and support for public research, whereas demand side polices only play a minor role in the region. The larger countries have specific bioeconomy policy instruments, while the others countries in this region cover bioeconomy in more cross-cutting measures. In general, the number of relevant policy instruments is in countries higher that have already developed national bioeconomy strategies or action plans. Furthermore, in France and Belgium also some demand-side policy instruments could be identified as described above. These policies are mainly laws and regulations of certain climate change policies, which are only related to the bioeconomy, but may play a role 6.2 Policy process and policy coordination in selected MR countries The following subchapter deals with policy processes and types of policy coordination mechanism in selected MR countries: Germany, France, Ireland and Belgium. The question how political authorities coordinate their bioeconomy activities is highly relevant, as usually not only one ministry is in charge for bioeconomy policy, but several ministries of different domains share responsibility. [Titel] Page 304 of 353 bring in their positions and interests. For instance, in Germany, stakeholders were not only included in the development of the bioeconomy strategy, but they have also the possibility to shape the political discourse through relevant events, such as the annually Biotechnology days or expert discussion, in which the public is not included. A highlighting example is the Alternative Bioeconomy Summit, which aims to consider the bioeconomy in the light of planetary boundaries. More than 100 experts took part if the online event, including the State Secretary of the Federal Ministry of Food and Agriculture, the National Bioeconomy Advisory Council (Daniela Thrän) and several civil society organizations. 44 The State Secretary highlighted that the conference serves as platform to negotiate important issues of the future bioeconomy and that a broad debate in the society would be needed. However, it is difficult to judge to which extent these various stakeholder group had actually an impact on policy-making. In France, the launch of the “Bioeconomy Trophy” is another noteworthy initiative, aiming at facilitating the dialogue with stakeholders and citizens. Trophies are awarded in bioenergy, bio-sourced materials and plant-based chemistry and involves interministerial coordination every year with presence of the four leading ministries of the French bioeconomy (Barrett et al., 2021). Moreover, the federal ministry for education and research in Germany has a dedicated funding programme (Bioeconomy as social change) that aims to include socialscience perspectives to the bioeconomy. Some projects, which specifically include also critical voices or the participation of different stakeholders groups beyond the bioeconomy community. In the context of the development of a national biomass strategy, the key points’ statement of the involved ministries stated that the strategy process will be accompanied by a stakeholder consultation to include relevant actors, such as Businesses, Science, Civil Society, federal states or the German parliament. These stakeholders provide technical recommendations and will enhance the overall acceptance of the strategy. Another initiative that is worth noting are the organization of Citizens dialogues, which were carried out from the Nature Conservation Union (NABU) and the federal Nature Conservation Agency (BfN). Within this initiative four interactive workshops and an online-dialogue over a couple of weeks were organized, in which the participants could learn about theoretical backgrounds of the bioeconomy or bioeconomy future concepts. In general, the perception of civil society organizations is rather critical regarding the question, if stakeholders are appropriately involved and claim that the ministries should take more efforts in binding joint 44 https://denkhausbremen.de/en/alternative-bioeconomy-summit/ [Titel] Page 305 of 353 decisions of all actors. In France, also various workshops were held with the participation of stakeholders (industry representatives, technical institutes, research establishments) to draw up the national bioeconomy strategy and its action plan. Additionally, the Bioeconomy CTI have also established a regular exchange between the government and other stakeholders. Active engagement of stakeholders were also taking place in Ireland. With the process of developing the national bioeconomy policy statements consultations were regularly held. Furthermore, a key action during the process was laid down in the Action Plan for Rural Development, which suggested to hold a consultative seminar on the bioeconomy with explicit stakeholder engagement of development agencies or the private sector. With the launch of the bioeconomy forum, Ireland has given the mandate to liaise with stakeholders across several industries, relevant semi-state commercial companies, representative bodies and non-governmental and community groups. The bioeconomy forum consist of different representatives, such as environmental NGOs, local authorities, sectors producing biological resources or semi state commercial companies. In regular reports, the bioeconomy forum is mandated to give recommendations for the future development of the Irish bioeconomy. In its first report, the Bioeconomy Forum specified the need for policy to support co-operative interactions among multiple actors (e.g. businesses, scientific communities, social movements etc.). Stakeholder engagement is essential to address local and regional challenges and in identifying of priority product and market opportunities according to the report. Moreover, with the Irish Bioeconomy Network, which is coordinated by the Bioeconomy Implementation and Development Group, a wide range of stakeholder from leading organizations, centres, clusters or programmes are brought together, promoting engagement and raising awareness in the bioeconomy. 45 Although in Belgium also several stakeholder involvement activities are taking place (e.g. working groups, steering committees), engagement with the wider public still lacks elaboration. That is the reason, why in Flanders bioeconomy is still more unknown among the general population. In some countries, it can be also observed that different NGOs play a crucial role in shaping policies or campaigning against bioeconomy policies. In Germany, the Bioeconomy Action Forum is an interesting example, how different NGOs build an alliance to have a common and unified position in the bioeconomy. The Forum is organized by Denkhaus Bremen and its cooperation partner BUND (Friends of the 45 https://www.gov.ie/ga/foilsiuchan/046ce-stakeholder-coordination-consultativegroups/#irish-bioeconomy-network [Titel] Page 306 of 353 Earth). Together with other NGOs (e.g. WWF, Brot für die Welt, FIAN) they debate the future bioeconomy with respect to agriculture, forestry, bioenergy or on conflicts associated to the bioeconomy, such as land grabbing or land use conflicts. However, a structural problem of such alliances remain the limited financial resources buildingup such initiatives would require. In the Netherlands, the plans of the government to implement biomass subsidies led to the creation of new environmental organizations and campaigning against the House of Representatives. At the end, the NGOs were able to discontinue the planned biomass subsidies of the government (Kuhlmann, 2022). The examples show that civil society organizations are able to leverage the government and influence the policy discourse in the public against the interest of the government. What also became evident throughout the interviews was the fact that the interrelations of actors highly depend on the closeness of topics these actors are covering. As Nature Conservation Organization genuinely are closer to the ministry for the environment, the interrelations between these actors are deeper. Not surprisingly the federal ministry for economic affairs and climate protection share more interest with business associations than with environmental NGOs or societal movements. 6.2.3. Dealing with Goal Conflicts At the political level, goal conflicts of the bioeconomy play an increasingly important role and are controversially discussed among political actors. In Germany, the conflict between land use and environmental protection has been a conflict point between actors, as the example of the biomass strategy showed. A proposition for this goal conflict would be to reconsider our diet habits including the way how we keep animal, according to environmental organizations in Germany. Another goal conflict that is discussed at high levels of the BMBF in Germany are the ethical considerations of the breeding technologies. The BMBF strongly supports the application of these breeding technologies, as they deliver suitable solutions for food supply globally. As at the European level genome-editing is regulated with the EU-Gene technology law, it is still unclear whether these technologies will be implemented in the European agriculture. As under this law, such plants have to be formally approved and require obligations to provide proof, it is still unlikely that breeding technologies will be used at a broad scale in Europe. In the case of Germany, also the national bioeconomy advisory council (BÖR) is assigned to launch participatory format with stakeholders, discussing development pathways and practical compromises for overcoming goal conflicts, [Titel] Page 307 of 353 also with respect to the sustainability objectives. 46 Further examples, which have been discussed in the countries of the Western Macro-region are the competition of feedstock and the potential to develop unsustainable value chains. Similar to other EU member states, the transition towards a sustainable bioeconomy in Ireland unfolds with complex trade-offs, for example in relation to issues such as bio-products, market competitiveness, environmental goals, use of bio-resources, and land-use changes. According to the Irish Bioeconomy Forum report 2022, goal conflict in Ireland has been predominantly navigated through policy, frameworks and accreditation systems. Besides the precautionary principle adopted within policy frameworks (no harm to the public or the environment), the Bioeconomy Implementation and Development Group (BIDG) in Ireland (formerly called the Bioeconomy Implementation Group) plays a vital role in navigating policy coherence between the bioeconomy and other sectoral policies. A high level of coherence has already been identified between the strategic policy objectives of Project Ireland 2040 (the Irish National Development Plan) and the national bioeconomy policy statement (Kelleher, Henchion et al. (2019). The BIDG continues to work to reinforce the policy context for a sustainable and circular bioeconomy in Ireland. Another example of how potential conflicts are addressed is provided by the strategy for the agricultural and food sectors to 2030; Food Vision 2030, through a process involving significant stakeholder engagement, identifies a shared vision for the future, along with actions for embedding the agri-food sector in the circular bioeconomy. In addition, there are several standards and accreditations available nationally to alleviate goal conflicts, mainly between primary sectors and the environment such as CRE scheme for compostable waste recycling and Bord Bia’s Origin Green in the agri-food sector. The latter is a national sustainability programme bringing together government, the private sector and full supply chain actors (e.g., farmers, food producers retailers) to achieve sustainability targets and community welfare while ensuring no harm to the environment. Belgium’s bioeconomy aspirations hinge on achieving sustainable economic development, environmental preservation, and societal well-being. However, a pivotal conflict arises concerning land use, particularly in balancing the demands of agriculture, urban development, and bio-based industries. Striking a harmonious equilibrium proves challenging, requiring collaborative dialogue and integrated policies to navigate conflicting interests. Policymakers play a central role in crafting 46 (https://www.bmel.de/DE/themen/landwirtschaft/bioeokonomie-nachwachsenderohstoffe/ueberblick-biooekonomie.html [Titel] Page 308 of 353 strategies that optimize land use, and investments in research and innovation focus on technologies that reconcile economic growth with environmental responsibility. With adaptive governance and public awareness initiatives, Belgium endeavours to forge a resilient and responsible bioeconomy, addressing conflicts and advancing its multifaceted goals. 6.3 Applied R&D and Technology Transfer 6.3.1 Policy Instruments for Applied R&D and Tech transfer in selected MR countries In the Western macro-region, the funding situation for Technology Readiness Levels (TRL) 4-7 in applied research and development is diverse, with a mix of national, European, and collaborative initiatives contributing to the landscape. Specific policy instruments strategically target higher TRL levels, aiming to bridge the gap between research outcomes and practical applications. National initiatives, exemplified by France’s Investments for the Future Programme, allocate substantial resources to projects focused on advancing technologies to TRL 4-7. These programmes reflect a commitment to fostering innovation that is closer to market readiness. At the European level, Horizon Europe plays a pivotal role in supporting projects targeting TRL 4-7. Collaborative efforts and transnational initiatives under Horizon Europe emphasize elevating the readiness levels of technologies, fostering a unified approach to innovation across the Western macroregion. Specific policy funding schemes that enable firms to use multi-purpose facilities, such as open-access pilot plants, are instrumental in advancing technologies through TRL 4-7. A first overview of such kind of facilities is provided through the Pilots4U Initiative. These schemes facilitate access to crucial infrastructure, supporting practical testing and validation of technologies in real-world settings. One implemented funding scheme is the German “Förderprogramm Industrielle Bioökonomie” 47 initiated by the BMWK. The programme aims to increase construction and use of demonstration plants for the industrial bioeconomy and thus the scaling up of innovative bioeconomic processes and procedures, and has as such lighthouse character for other countries and regions. 47 https://www.bmwk.de/Redaktion/DE/Dossier/industrielle-biooekonomie.html [Titel] Page 309 of 353 Activities like matchmaking, exhibitions, and accelerator programmes are relevant at TRL 4-7, providing platforms for knowledge exchange and collaboration. These initiatives foster connections between research institutions, industry players, and potential investors. While there are indications that such activities work well, the effectiveness can vary based on sector-specific dynamics and the level of engagement from key stakeholders. 6.3.2 Structures and Challenges for Applied R&D and Tech transfer in selected MR countries In the dynamic landscape of the Western macro-region, several pivotal actors and collaborative initiatives take centre stage in driving applied research and development, as well as facilitating technology transfer. These entities play a vital role in bridging the gap between academic research and practical application, fostering innovation across various sectors. In Germany, innovation hubs and clusters like the Fraunhofer Society or the German Research Center for Artificial Intelligence (DFKI) in the field of digitalization serve as dynamic catalysts for applied R&D. These entities create collaborative ecosystems, uniting researchers, businesses, and government bodies to push the boundaries of technological advancements. The Netherlands showcases strong innovation hubs such as Brainport Eindhoven and Food Valley, specializing in high-tech systems and agri-food innovations, respectively. These hubs function as collaborative environments that stimulate the transfer of technology from research institutions to industry applications. France leverages public-private partnerships (PPPs) within the framework of the Investments for the Future Program (PIA). Initiatives like the Institutes for Energy Transition (ITEs) exemplify collaborative efforts between public institutions and private enterprises, accelerating the development and transfer of innovative technologies. In Belgium, the Belgian Science Policy Office (Belspo) fosters collaboration between the public and private sectors, evident in initiatives like the Space Pole. Such partnerships drive applied R&D, particularly in space-related fields, facilitating the transfer of cutting-edge technologies. Luxembourg has embraced the establishment of Technology Transfer Offices (TTOs) associated with research institutions and universities. These offices actively engage in technology transfer initiatives, acting as intermediaries between researchers and industry partners to bring innovations to practical fruition. Ireland’s Enterprise Ireland plays a pivotal role in the innovation ecosystem by supporting collaboration between academia and industry. Through funding and expertise, Enterprise Ireland facilitates applied R&D projects and technology transfer, driving [Titel] Page 310 of 353 innovation across sectors. Transnational networks and initiatives, such as InterTradeIreland, facilitate cross-border collaboration between Ireland and Northern Ireland. These initiatives promote knowledge exchange, technology transfer, and collaborative R&D projects, particularly in sectors like bioeconomy. Austria’s innovation agency, Austria Wirtschaftsservice (aws), contributes significantly to applied R&D and technology transfer. Collaborating with businesses and research institutions, aws provides funding and support to drive innovation across diverse sectors. Collectively, these actors and initiatives form a vibrant tapestry of collaboration within the Western macro-region. Their efforts not only advance applied R&D but also actively contribute to the seamless transfer of technology from research environments to real-world applications, fostering innovation and economic growth.However, the adequacy of structures and infrastructures for fostering innovations in the bioeconomy is a mixed scenario. While there exist notable innovation hubs, research centres, and technology transfer offices, certain gaps and challenges persist. The existing structures demonstrate strengths, such as cutting-edge research facilities and collaborative initiatives. However, some key elements may be missing, including adequate state-of-the art pilot plants and a broader engagement of small and medium-sized enterprises (SMEs) to effectively scale up and implement bioeconomy innovations. The integration of SMEs is crucial for the practical application and commercialization of bio-based technologies. Efficiency concerns arise in the awareness and preparedness of entities like tech transfer offices and firms regarding the potential of the bioeconomy. There may be instances, where these entities are not sufficiently aware of the opportunities within the bioeconomy, or their workforce may lack specialized training. Additionally, challenges in securing financing at certain stages of innovation development hinder the smooth progression of bioeconomy projects. Major challenges in applied research and technology transfer within the bioeconomy in the Western macro-region encompass the need for improved coordination and awareness among stakeholders. This includes enhancing collaboration between research institutions and industry, ensuring SMEs are active participants in the innovation ecosystem, and addressing gaps in training and financial support for those involved in the bioeconomy value chain. Overcoming these challenges requires a holistic approach that fosters a conducive environment for innovation, encourages collaboration, and addresses the specific needs of bioeconomy initiatives. [Titel] Page 311 of 353 6.4 Cross-sectoral Collaboration Given the intricate and interdisciplinary nature of the bioeconomy, national policies and action plans in the Western region sector have identified policy coordination and cross-sectoral collaboration as critical pillars for realising the bioeconomy’s potential through: • Encouraging the alignment of bioeconomy development across various national strategies • Investing in cutting-edge research and innovation • Initiating and fostering collaborations with multi-stakeholders at the national, regional, and international levels Given that the bioeconomy policy is often driven by ministries of agriculture, forestry, rural development, or economics in multiple countries across the WE region, interministrial and cross-sectoral collaborations is crucial for attaining the full potential of sustainable bioeconomy. 6.4.1 General overview of cross-sectoral collaboration In recent years, a discernible trend has emerged towards increased recognition of the benefits of cross-sectoral collaboration within the Western macro-region. Stakeholders from various industries acknowledge the potential for innovation, enhanced problem-solving, and collective impact through collaborative efforts, particularly in addressing complex challenges requiring expertise from multiple sectors. Governments and industry players actively promote collaborative frameworks, emphasizing the need to break down silos for more effective problemsolving. Initiatives encouraging dialogue and partnerships between traditionally distinct sectors, such as technology, healthcare, and environmental sustainability, are on the rise. Despite positive trends, challenges persist. Regulatory differences and diverse legal frameworks among Western European countries can impede seamless collaboration. Additionally, competitive dynamics within specific sectors may create hesitancy among companies to engage in open collaboration, though there is a growing realization that sharing information can lead to mutual benefits. Comparatively, the Western macro-region’s trends in cross-sectoral collaboration align with global patterns, as many countries recognize the value of breaking down traditional barriers for innovation and sustainable development. Initiatives and programmes at the European Union level further support cross-sectoral collaboration, contributing to a [Titel] Page 312 of 353 broader culture of cooperation. Recent important changes include the emergence of bottom-up activities where stakeholders organize themselves to support crosssectoral collaboration. These grassroots efforts showcase a proactive approach from the ground level, indicating a growing awareness and commitment to overcoming barriers through collective action. Challenges persist at the sectoral, country-specific, and regional levels. For instance, in Germany, there’s hesitancy among companies within competitive industries to engage openly in collaborative innovation. Regulatory differences between Belgium and Luxembourg pose hurdles, while regional disparities in infrastructure development impact collaborative endeavours in Ireland. Resource constraints, both financial and human, pose significant barriers to collaboration. In the Netherlands, insufficient funding for collaborative initiatives and a shortage of skilled professionals in specific fields may impede joint projects. In recent years, a noteworthy development in the Western macro-region has been the emergence of bottom-up activities where stakeholders have proactively organized themselves to support cross-sectoral collaboration. These grassroots initiatives showcase a ground-level commitment to overcoming barriers and fostering collaborative efforts. For instance, in Germany, industry-led consortia have been established to promote cross-sectoral collaboration in areas such as sustainable manufacturing practices and the circular economy. These consortia bring together representatives from diverse sectors, including manufacturing, environmental sciences, and technology, to jointly address shared challenges and explore innovative solutions. Similarly, in Belgium, stakeholders from various industries have formed networks focusing on biobased technologies and sustainable resource management. These initiatives aim to leverage the collective expertise of participants, spanning agriculture, biotechnology, and environmental sciences, to drive advancements in the bioeconomy. In Ireland, bottom-up activities have been observed in the establishment of industry-led forums addressing themes like renewable energy integration and waste reduction. Stakeholders, including businesses, research institutions, and governmental bodies, collaborate within these forums to promote sustainable practices and shared learning. In the context of the Western macro-region, two primary production/raw material resources that play a pivotal role in bio-based material flows are forestry and agriculture. [Titel] Page 313 of 353 Forestry stands out as a crucial sector due to its significant contribution to the production of raw bio-based materials, including wood, timber, and various forest products. In countries like Germany, where approximately one-third of the land is covered by forests, Austria, with about 47% forest coverage, and France, boasting diverse forest ecosystems, forestry is a key player in providing renewable resources. The sustained management and utilization of these forest resources contribute substantially to the region’s bio-based material flows. Agriculture, another fundamental primary production sector, plays a vital role in providing raw bio-based materials for diverse applications such as food, bioenergy, and industrial processes. Countries within the Western macro-region, notably France, Germany, and the Netherlands, have well-developed agricultural sectors. France, one of Europe’s largest agricultural producers, is known for its diverse cultivation, including wine and dairy production. Germany, with a robust agricultural sector contributing to cereals, sugar beets, and livestock farming, and the Netherlands, a major global exporter of agricultural products, collectively form the backbone of bio-based material flows in the region. These primary production sectors, forestry and agriculture, were selected for their substantial and sustained contributions to the production of raw bio-based materials, making them integral components of the Western macroregion’s bioeconomy. 6.4.2 Policies supporting Cross-sectoral Collaboration in selected MR countries In the Western macro-region, a range of policies has been implemented to stimulate cross-sectoral collaboration. These policies, often country-specific, share a common aim of fostering an environment where diverse stakeholders can work collectively to address challenges and drive innovation. In Ireland, cross-sectoral collaboration is being encouraged through multiple instruments including policy and funding schemes. For instance, the food vision 2030 of Ireland entails ‘cross-sector collaboration and investment, nationally and internationally, should be pursued for the development of circular and climate-neutral’. Across the WE region, Several funds and public-private partnerships are also to support collaborations between industry and research such as SFI programme for industry and BioConnect in Ireland and SME Innovation Scheme for Top Sectors (MIT) in the Netherlands. A variety of policy instruments, funding initiatives, and support measures have been deployed to bolster cross-sectoral collaboration. These efforts aim to create an environment conducive to effective collaboration between stakeholders from diverse sectors, promoting innovation and addressing common challenges. One prevalent approach is the [Titel] Page 320 of 353 emerging renewable energy providers, providing financial and insurance backing to nurture their growth. • Ireland distinguishes itself with the “Bioeconomy Demonstration Fund”, a strategic initiative aimed at offering practical examples of bio-based innovation and solutions to policymakers, public and private investors, and local communities. This fund plays an active role in supporting the development and commercialization of bioeconomy-related projects. 6.5.2 Company financing The following part shows the finding of an in depth analysis done about data from the beginning of 2021 until 13 April 2023. All these findings are based on reported data in Dealroom. Figure 93. Type of reported financing rounds in Western macro-region. Source: dealroom.co (2023). The companies in the Western macro-region receive predominantly private funding from investors located both inside and outside their countries. The investors from this region fund companies globally with private investors from France, Germany, Belgium [Titel] Page 321 of 353 and the Netherlands, accounting for 92.47% of the investors located in the region. All countries except Austria are represented in the top 20 investors in Europe by number of deal participation with 2325 funding rounds in total. This means that in Germany, Ireland, Netherlands the average amount for a single deal is higher than in Austria, Belgium, France. There is similarity in the proportions in the investment amount related to the number of investment rounds (Figure 94) for early-stage companies (TRL 1-6) in all countries in the Western Macro-region, the investment amounts for Austria, Belgium and France smaller for relatively big number of financing rounds. One can only speculate at this stage for the reasons, as there are complex reasons like legislative framework, national and regional policies, EU policies transposition (national adaptation), size of market, number of local investors, geographic factors, access to market, even size of average remuneration for highly qualified employees, and so on. This is the subject of analysis in T2.4. Figure 94. Early stage funding rounds and amounts in Western MR. Source: dealroom.co (2023). The total amount raised per country for all investment deals is presented in Figure 95. The region is characterised by big number of investment rounds for all company development stages, with the two biggest deals at the top 5 for the entire Europe in the reported period taken place in Germany. [Titel] Page 322 of 353 Figure 95. Total reported amount raised by country in Western macro-region. Source: dealroom.co (2023). 6.5.3 Impact of Policies for Financing in selected MR countries Within the Western macro-region, various funding initiatives are in place, managed by entities such as Austria Wirtschaftsservice (AWS) and Bpifrance, aiming to support SMEs. The effectiveness of these programmes relies on their adaptability to the diverse needs and dynamics of different industries, ensuring that they meet the specific challenges faced by businesses. Flanders, with a strategic vision to position itself as one of the preeminent bioeconomic regions in Europe by 2030, has implemented robust measures to actualize this goal. The regional government, recognizing the manifold benefits inherent in the bioeconomy, including heightened resource efficiency and job creation, has allocated substantial support through an array of grants and subsidies. Complementing this financial support, Flanders maintains an R&D-friendly tax system, enabling companies to recuperate portions of their investments. With a noteworthy commitment to research and development, constituting 2.89% of Flanders’ GDP, the region stands as a pivotal hub for innovation, poised to foster sustainable economic growth. In tandem, Ireland exhibits a comprehensive framework supporting the development of the circular and bioeconomies. Diverse and well-coordinated research and innovation funds are available, facilitated through various channels including European Union programmes and different governmental bodies such as the Department of Agriculture, Food, and the Marine, the Department of Communication, Climate Action & Environment, and the Department of Business, Enterprise and Innovation. Agencies such as Enterprise Ireland, the Environmental Protection Agency, Science Foundation Ireland, and the Irish Research Council play integral roles in [Titel] Page 323 of 353 channelling financial support. Noteworthy initiatives include Enterprise Ireland’s backing for bioeconomy innovation and piloting facilities, exemplified by the establishment of a facility in Lisheen, Co. Tipperary. Ireland’s commitment to academic research and competitive enterprises is evident through Science Foundation Ireland, with its support for initiatives like the Beacon Bioeconomy Research Centre (now BiOrbic). Additionally, the InterTradeIreland Impact funding programme fosters cross-border collaboration between SMEs in the Republic of Ireland and Northern Ireland, further enriching the bioeconomy landscape. Meanwhile, Germany stands as a stalwart supporter of bioeconomy projects, offering financial backing through grants, loans, and tax incentives. Renowned programmes such as Bioeconomy International and Bioeconomy Innovation Programmes serve as catalysts for the development and commercialization of bio-based innovations. The substantial financial commitment by the Federal Ministry of Education and Research (BMBF) and the Federal Ministry of Food and Agriculture (BMEL), amounting to 3.6 million euros from 2020 to 2024, underscores Germany’s dedication to advancing bioeconomy-relevant projects and measures. Furthermore, Germany leverages funding programmes and initiatives provided by the European Union, reinforcing collaboration, innovation, and market deployment across European countries. SMEs in the macro-region, including those in the Netherlands, have access to grants and subsidies as part of support mechanisms. In Ireland, support for SMEs is provided through entities like Enterprise Ireland, tailoring assistance to the needs of Irish businesses. The success of these programmes depends on their ability to address the specific challenges faced by businesses in the Irish context. Beyond the regional context, it is crucial to evaluate the awareness and accessibility of these programmes. SMEs may not always be fully cognizant of the available programmes, necessitating efforts to enhance awareness through outreach and educational campaigns. Moreover, obstacles to accessing these funds, whether due to complex eligibility criteria or intricate application processes, need to be addressed. Simplifying procedures and providing assistance can alleviate these challenges, ensuring that a broader range of SMEs can access the support they need. Adequacy of funding amounts is another critical consideration. 6.6 SWOT Analysis of the Western Macro-Region Table 43 SWOT Analysis of the Western region [Titel] Page 324 of 353 Strengths - Strong technical expertise/knowledge and capabilities available for efficient biomass utilization - Innovative approaches uprising for CO2, alternative proteins - Comprehensive Framework: Policy framework encourages sustainable biomass use, bio-based innovations and industry support. - Effective Coordination: governance structure facilitates policy implementation through intersectoral and interministrial working groups - Stakeholder Engagement: Collaboration with stakeholders helps align policies with industry needs. Weakness - Infrastructure gaps: Some industries lack necessary infrastructure for biomass use. - Incentives: Government incentives promote bioeconomy investment, but only at regional level and not cross-country. Low mobility of funding. - Limited land resources: Western region faces land scarcity for woody biomass production (except of Austria). Opportunities - Room for improvement in horizontal coordination within bioeconomy policy and other policy fields, for mobilizing regions - Innovation Potential: very strong R&D capabilities can drive biomass conversion technology development. - International Collaboration: Collaborating with other countries fosters knowledge exchange. - Highly skilled workforce needed Threats - Budget Constraints: Economic challenges may limit government funding for bioeconomy initiatives. - Investment Risks: Uncertainties can deter private investors. - Global Competition: Western region competes with other nations in the global bioeconomy market (new food with Singapore). - Market Volatility: Biomass price fluctuations can affect industry competitiveness. [Titel] Page 325 of 353 - Knowledge Sharing: Facilitating technology transfer accelerates biomass technology adoption. - Diversification: Collaboration between sectors can lead to new biobased products and value chains. - Though regulatory process (on European level) (GMO, Novel Food, Pesticides) [Titel] Page 326 of 353 6.7 Conclusions for the Western Macro-Region 1. The Western macro-region plays a pivotal role in the EU’s bioeconomy landscape: With the exception of Austria, it is specialized in agriculture, with delivering input of food, feed, energy, and biomaterials. 2. With almost half of EU biorefineries, the Western macro-region excels in the industrial deployment of the bioeconomy, especially in chemical and biomethane production. 3. Robust research and development institutions across countries actively contribute to bioeconomy-related research, fostering innovation. 4. A dynamic landscape thrives with diverse companies, where large corporations transition into bioeconomy, and SMEs/start-ups are dedicated to bioeconomic activities. 5. Germany, Ireland, France, and Austria stand out for their leadership in bioeconomy strategy development, demonstrating a commitment to longterm sustainability and innovation. However, strategies, policy development is not uniform across countries, revealing disparities, especially in Luxembourg and Belgium there are less strategic approaches. 6. Each country tailors its bioeconomy initiatives to its distinctive strengths, showcasing Austria’s focus on wood-based bioeconomy, Belgium’s emphasis on sustainable agriculture, and Ireland’s commitment to circular bioeconomy education. 7. Challenges persist in achieving seamless collaboration and policy coherence, emphasizing the complexities of aligning interests and priorities. 8. Stakeholder involvement, including industry associations, NGOs, and collaborative platforms, emerges as a critical element in shaping bioeconomy policies. 9. Ongoing debates and criticism, underscore a lack of consensus in the bioeconomy discourse. Among others, there are concerns about sustainability, governance of biomaterials and novel food products 10. Diverse funding sources for applied research and development, coupled with technology transfer initiatives, underscore the region’s commitment to advancing bioeconomy technologies. However, policy instruments supporting commercialization and demand-side policies are fragmented [Titel] Page 327 of 353 11. Challenges, including awareness, accessibility, and funding adequacy, necessitate a holistic approach with recommendations for enhancing outreach and simplifying application processes for broader SME access to funding support. 12. There is a significant range of activities of policy actors, clusters as well as firms to enhance cross-sectoral collaboration, which is nevertheless an ongoing challenge in this macro-region as well [Titel] Page 328 of 353 7 Comparison of Macro-Regions In this deliverable, the bioeconomy state of play and activities were mapped in four EU macro-regions Western, Southern, Central and Eastern European and Baltic Sea macro-region. The 4 macro-regions have specific profiles which can be distinguished from each other. However, within each single macro-region, there exist also significant differences between the countries, so the macro-regions are not homogeneous on a country level. Each macro-region comprises 6 to 8 of the 27 EU member states (table) 49 and covers approximately one fourth of the EU land area. However, the macro-regions differ from each other in their population density, with the Western MR being the most densely populated macro-region (44% of EU population). The Baltic Sea macro-region is the most sparsely populated one (6% of EU population), having a large land area available for a relatively low number of inhabitants. The Southern and CEE macro-region are close to the EU average regarding area and population. Table 44 Assignment of EU member states to ShapingBio macro-regions MR No of EU countries Countries Area in million sq. km (Share of EU-27) Inhabitants in million (Share of EU-27) Western 7 AT, BE; GER, FR, IRE, LUX, NED 1.21 (29%) 195 (44%) Southern 6 ESP, PT, MT, GRE, CYP 1.03 (25%) 129 (28%) Baltic 6 DK, EE, FI, LV, LT, SWE 1.00 (25%) 28 (6%) CEE 8 BG, CRO, CZ, HUN, POL, RO, SL, SK 0.88 (21%) 100 (22%) 49 There are slight deviations in the assignment of member states to the CEE and BSR macroregions in ShapingBio, compared to other existing assignments: The ShapingBio CEE macroregion differs from the BIOEAST initiative in the way that the CEE MR does not include the Baltic States Estonia, Latvia and Lithuania. In ShapingBio, these Baltic States are assigned to the ShapingBio Baltic Sea macro-region. The ShapingBio Baltic Sea macro-region differs from the Baltic Sea Region in that it does not include Russia (as it is a non-EU member state), and Germany is assigned to the Western macro-region in ShapingBio. [Titel] Page 329 of 353 Source: Own compilation. The Baltic Sea MR also differs from the other three macro-regions with respect to the predominant source of biomass from primary production: While in the Western, Southern and CEE macro-regions, 76 to 85% of biomass is provided by agriculture, in the BSR only 41% is agricultural biomass and 59% comes from forestry. Therefore, forestry, wood products, furniture, construction, paper and fuelwood are economically very important in the BSR bioeconomy, especially in Finland and Sweden (45.8% of total GDP of BSR countries 50 ). The CEE macro-region differs from the Southern and Western MR in the extent of converting their resource of agricultural biomass to value added products domestically: it is lower in the CEE macro-region. 7.1 Policy 7.1.1 Strategies and Governance Bioeconomy is a broad concept which does not only cover many industrial sectors. It also requires transformative change from a linear fossilto a circular bio-based economy and has close interlinkages with other policy fields. This makes development and implementation of holistic, coherent bioeconomy policy challenging, requires complex coordination efforts (typical for “wicked problems”) and close collaboration between many actors. Although bioeconomy has been a policy priority on the EU level for more than a decade, this is not the case in all EU member states. The mapping yielded a broad spectrum of approaches that EU member states pursued towards a national bioeconomy policy: a) Dedicated bioeconomy strategy: with/without action plan, time scale early to late adopters (e.g. Germany, Italy, Finland, Portugal), but in some cases not updated (e.g. the Netherlands, France). b) No dedicated strategy, but dedicated policy initiatives and action plan or roadmap (e.g. Estonia) c) Bioeconomy addressed within other strategies (e.g. Hungary) d) Bioeconomy aspects addressed within other strategies, scattered (e.g. many CEE countries, Greece, Malta) Which approach is chosen in a given member state seems to be country-specific. At least, no clear pattern per macro-region can be observed. However, the Western MR is 50 https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMICS/index.html [Titel] Page 336 of 353 Macro-region Biorefineries51 Bioeconomy value added Bioeconomy employment Western 49% 49% 29% CEE 11% 14% 39% Southern 16% 28% 26% BSR 24% 10% 6% EU 27 100% 100% 100% Source: JRC data, see chapters 2-5 above. The Western MR is of high economic significance in the EU bioeconomy: Half of all EU biorefineries are located in this MR. The MR is characterized by a dynamic industrial landscape with dedicated companies, SMEs and start-ups, as well as large corporations having bioeconomy as part of their portfolio, supported by industrial associations. The MR also has a well-developed cluster structure which, among others, foster cross-sectoral collaboration. Industry and clusters are active in all relevant sectors of the bioeconomy. In line with the well-developed industrial landscape, also half of the EU value added in bioeconomy is generated in the Western MR. The bioeconomy employment share is remarkably low. This is an indication that industry has a focus on knowledge-intensive and feedstock-valorizing activities rather than on labour-intensive activities with low value added. Stakeholders such as industry associations, NGOs, and collaborative platforms, are involved in shaping bioeconomy policies. The contribution of the Southern MR to the EU bioeconomy in terms of value added and employment is consistent with its share of the EU population. The southern macroregion employs policies, financing, R&D programmes, public-private platforms, tax incentives, and European programmes to promote inter-sectoral collaboration in bioeconomy projects. However, the share of open pilot plants and biorefineries is comparably low. This may be an indication that a significant part of value added and 51 Biorefineries comprise a wide range of plants, from innovative, recently built biorefineries in which the newest principles of circular economy are applied, to very traditional, decades-old plants obtaining products from biomass (e.g. some timber, paper, or starch plants). [Titel] Page 337 of 353 employment is due to primary production in agriculture, and that opportunities could lie in higher domestic valorization of agricultural or marine biomass. Although the CEE countries have a high amount and quality of agricultural biomass, they lack smart, value-adding, and sustainable value-chains to valorize this resource domestically. Agriculture is of high importance, especially in Romania and Poland, but in general is characterized by a low level of productivity and a high number of employees. Opportunities for change lie in the still untapped potential of valorizing agricultural residues and by-products in production, processing and consumption, the increase of biorefinery capacities, changing traditional practices and mindsets, and raising the awareness of opportunities for circular technological solutions and business models, both in industry and policy. The BSR bioeconomy is dominated by the forest industry and the products created by the forest as raw materials. Other important sectors are agriculture and food, biotechnology, and bioenergy (from forestry) industries as well as the blue bioeconomy as an emerging field. It also features a solid chemical industry (from forestry). The BSR has a well-developed cluster structure: most industrial sectors have their own cluster representation. The majority relate to biotechnology, energy, food, paper and pulp, and waste. Finland also has many water expertise clusters, ecosystems, and networks. In the Baltic Sea MR, the share of bioeconomy employment is in line with the low share of EU inhabitants. However, the high share of biorefineries and added value is remarkable: The value added per person employed in the bioeconomy sectors in the Baltic Sea MR is almost double the value of the EU-27 average. But it mainly comes from the Scandinavian countries which differ significantly in their structure from the Baltic States, as the former host the majority of biorefineries. The Scandinavian countries (DK, FI, SE) also show strong cross-sectoral collaboration especially related to wood, agriculture, food, and fisheries sectors. Therefore, the bioeconomy sectors in Denmark, Finland and Sweden generate relatively more value added than the bioeconomy sectors in Estonia, Latvia, and Lithuania. In the latter, the added value was generated mainly by the traditional sectors. Most of the raw materials are exported and higher-level processed products are imported. They are lacking smart, value-adding, and sustainable value-chains, and there is a lower level of cross-sectoral collaboration. In the Scandinavian countries, by contrast, the novel bioeconomy sectors generate a significant part of the total added value: most of the biomass supply comes from the forestry sector (woody and lignocellulosic biomass) and is turned into products mainly timber, biomethane, pulp and paper, bio-based chemicals and liquid biofuels. [Titel] Page 338 of 353 In all MR, the lack of a qualified workforce contributes to a slower industrial exploitation of bioeconomy knowledge and technologies, but for different reasons. In the Western MR, other sectors and industries are more attractive to talents than bioeconomy sectors, CEE countries and Baltic States suffer from brain drain of qualified workers who prefer to work abroad, in the Baltic Sea Region the imminent retirement of the aging workforce is a challenge, and in the Southern MR, the mobility of qualified personnel from academia to industry is not high enough. 7.4 Financing of industrial R&D&I activities and investment In many EU member states, publicly funded R&D grants for industry are available. In most cases, these are general R&D grants, not specifically dedicated for bioeconomy. The situation is comparable for equity financing: in each MR, some MS have equity financing instruments available, which also address a broad set of sectors and technologies, not specifically bioeconomy. The Western MR tends to have a higher amount to financing possibilities and support for companies. By contrast, for the Southern, Baltic Sea and CEE macro-regions, the different EU funding sources for bioeconomy are identified as highly important opportunities. The analysis of private financing rounds presents no clear picture regarding funding sources across the EU. In all countries with a significant number of funding rounds, a large variety of funding sources emerges. Moreover, rather in all countries the financing situation in earlier TRL stages and overall is in rather similar relation to each other, meaning countries with high amounts raised in early stage funding rounds are the same that perform best in total reported amounts across all development stages. In the countries of the Western MR, the financing situation appears rather homogenous in relation to the population of the countries. Moreover, there is also high similarity in the proportions in the investment amount related to the number of investment rounds between the countries. Hence, in average the amount raised per investment is rather equal. And in almost all countries of the Western MR, Series B funding plays a higher role measured in percent of total amount raised compared to the other macroregions. The Baltic Sea MR also achieves a high total amount and a large number of investments and clearly outpaces the Southern MR, although it has to be kept in mind that especially in Denmark and partly Estonia this is mostly due to a very few large deals. Moreover, in the Baltic Sea MR public grants are a notable part of the financing rounds in both modest and developed innovation systems in Denmark, Finland, Lithuania and Sweden. [Titel] Page 339 of 353 In the CEE MR the financing situation appears most difficult for all sources including public and national private financing as well as foreign direct investment. All countries in this MR show a limited number of investment rounds and amount raised, with the exception of single financing rounds, e.g. in the Czech Republic. Despite some differences in the amount of funding opportunities, companies face similar challenges across the EU: In principle, there is a range of funding options. However, especially for SMEs there are challenges regarding awareness, accessibility, and funding adequacy as well administrative hurdles. In ShapingBio in deliverable D1.1 a set of hurdles for SME financing have already been identified, but more in-depth analysis is needed to develop differentiated recommendations. [Titel] Page 340 of 353 8 References Chapter 2 Approach: Lassoued, R., Smyth, S. J., Phillips, P. W. B., Hesseln, H. (2018). Regulatory Uncertainty Around New Breeding Techniques. Front Plant Sci. 9:1291. 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