Building rural value chains for a fairer bioeconomy

Most of the raw materials used in the bioeconomy come from rural areas. However, in most cases, rural areas do not yet benefit from the full economic advantages of modern bio-based industries.

In the higher-value bioeconomy, cities still account for the lion’s share of capacity, hosting industries such as biotechnology and industrial chemicals, while rural communities are left behind in a sector that ultimately depends on their land and labor for raw material extraction, be it crops or agricultural waste.

To build a fair bioeconomy, we need bio-based supply chains that provide the greatest possible added value to rural communities.

We look at EU projects working to bridge the urban-rural divide in the bioeconomy at different levels – from small to national value chains.

Why are rural areas less likely to benefit from new bio-based industries?

Farmworkers and businesses participate in the bioeconomy primarily as suppliers of biomass, and struggle to capture a larger share of the wealth generated further down the supply chain by service workers and owners of value-added businesses.

This is ironic because rural areas offer ideal locations for new businesses and processing capacities due to their large amount of space and available biomass.

What benefits could rural areas gain from bio-based industries?

Building biomass processing capacity can help farmers and other rural primary producers increase revenues, diversify their incomes and hedge against price fluctuations in certain crops.

Rural areas generally have all the prerequisites to host full bio-based value chains. This could make these regions more self-sufficient, as they are less dependent on external suppliers for essential goods. Where economic decline is a key problem, well-planned bio-based value chains could provide an opportunity to revitalize regions that have suffered from underdevelopment and rural exodus in the past.

Prosperity is more likely to remain in rural areas when bio-based capacities are in local hands – for example, with local private forest owners or local community forests.

Promoting rural innovators

The EU has been criticised in the past for paying too little attention to meaningful rural development in its bioeconomy policy. In response, the EU included in its updated 2018 bioeconomy strategy that it would focus on “deploying inclusive bioeconomies in rural areas”.

Although the problem of low rural bioeconomy deployment is well known, high-value rural bioeconomies remain rare. Most farmers still sell their products exclusively to the food and agricultural market rather than to the chemical or materials sector.

However, the bloc now has some initiatives to promote higher-value bio-based activities in the continent’s rural areas and integrate them into complete value chains.

One of them is Bio-rural Europe. Part research project, part accelerator, it recognises the current limits of bio-based capacity in rural areas and looks for existing bio-based value chains that could be further developed.

Its aim is to assess the state of the rural bioeconomy (currently dominated exclusively by the food and agribusiness industries) to find out how to build bridges between it and the novel, high-value bio-based solutions in the most valuable sectors of the bioeconomy, such as green chemicals and high-performance renewable materials.

The project seeks out rural entrepreneurs with “ingenious bio-based solutions” in the areas of food and agriculture, forestry, water and water systems, bioenergy, bioproducts and biomaterials. Selected candidates will be nominated to participate in the European Bioeconomy Challenge, where they can present their ideas to key stakeholders.

Bio-rural also offers support to potential entrepreneurs and interested regional politicians by publishing their research results online. It offers detailed factsheets on numerous bioeconomy topics and online tutorials on different sectors of the bioeconomy, providing a comprehensive introduction for those new to the sector but interested in using biomass.

A key online resource that Bio-Rural is developing is business plans to guide the design of rural bio-based value chains, which are expected to be available online in 2025.

Strengthening existing regional value chains

The EU project SCALE-UP, a new project to promote community-based bioeconomy, seeks to realise the bioeconomy potential of six rural areas across Europe: Northern Sweden, the French Atlantic Arc, Upper Austria, Strumica and Andalusia. In all these regions, the bioeconomy is today negligible in relation to the vast biomass resources they contain.

The focus of SCALE-UP is to create links between all relevant stakeholders in the bio-based value chain – from biomass producers to civil society and government. The aim is to develop sustainable business models that are acceptable to these different groups and adapted to local problems and capacities.

Scaled rural bioeconomies for consumer supply chains

BioRural and SCALE-UP focus on small businesses and shorter value chains. A third EU rural bioeconomy project, BRILLIAN, funded by the Circular Bio-based Europe Joint Undertaking, supports the development of bio-based value chains at national level.

BRILLIAN is validating ten existing bio-based value chains in Italy, Denmark and Spain with the aim of promoting greater vertical integration of circular, bio-based and value-added operations at the sites surrounding biomass collection points, for example by setting up biomass pre-treatment plants close to the fields where it is grown.

The focus is on building scaled supply chains that provide sufficient quantities of processed biomass to satisfy larger retailers while enabling rural communities to participate more fully in the bioeconomy.

Working closely with the project are downstream companies that require a larger supply of biomass to expand their renewable energy offering or are entering the field of bio-based materials for the first time.

Three ways to prepare potatoes

One bio-based value chain that BRILLIAN is analyzing and redesigning is located in Spain and revolves around the potato. As soon as the potatoes leave the farm gate, they go to Paturpat, a key project partner.

Paturpat is a manufacturer of steamed and processed potato products based in Vitoria, Spain. Paturpat produces vacuum-packed, ready-to-eat products that are sold in supermarkets. The cooperative company was founded in 2016 through the collaboration of an agricultural cooperative, a worker cooperative and a credit cooperative.

Currently, Paturpat generates its revenue from an easily prepared food product with a stable market, but now the company wants to diversify its revenue and make use of the 450 tons of potato waste that the company produces each year.

The company joined the EU project BRILLIAN to develop new ways of processing and marketing waste material by building a bio-based value chain that extracts maximum value from all components of the potato.

A well-designed bio-based value chain will split into multiple branches at several points as raw materials are simultaneously converted into multiple higher-value products intended for different markets.

In the new business model developed by BRILLIAN, a large proportion of Paturpat’s potatoes will continue to end up in stores as food, but the starch byproduct created during steaming and processing will be resold for further processing in the chemical and cosmetics industries.

Starch is the most valuable byproduct of the potato value chain, as the material can be used as a raw material for the chemical and cosmetics industries. The chemical industry can convert potato starch into thermoplastics, and one project participant interested in this form of exploitation is Aitiip, a plastics company specializing in bio-based materials, as well as Tecnotp.

Finally, all residues from the starch production process are converted into animal feed and form the third and final branch of the new BRILLIAN potato value chain.

The development promise of the bioeconomy

Commentators argue that the bioeconomy has the potential to offer a more geographically distributed range of jobs than the fossil economy.

The centralized nature of the oil industry is due to the fact that petroleum deposits are found in isolated, fixed locations. In contrast, biomass and agriculture activities are more evenly distributed, meaning that the bioeconomy would have a more decentralized structure, with many clusters of processing facilities located around many biomass harvesting sites.

The EU already recognises that this decentralised structure is the most desirable model for the development of the bioeconomy, ‘where at least the first transformation of biomass takes place as close as possible to the biomass supply area’.

In practice, the bioeconomy does not automatically distribute its economic benefits evenly. This is confirmed by current spatial patterns, whereby higher-value bio-based processing sites are much more often located in or close to urban areas.

Like all value chains, bio-based value chains need to be consciously designed to ensure that they do not support uneven development patterns that exclude rural communities.

There are still many obstacles to establishing ecosystems of bio-based farms and refineries in rural areas. These include high capital requirements, installation of complex technologies and the need to train specialized workforce to operate them, collaboration with technology providers, distribution channels and the development of optimized short and sustainable logistics chains.

This complexity and high costs are what drives the EU to involve a range of regional stakeholders in its rural bioeconomy projects. Building value chains requires cooperation between farmers, raw material processors, end users and rural decision-makers, with support and advice needed at all levels, from individual operators to entire regions.