BIOTECHNOLOGY
US Report calls for industry and academia to co-ordinate a growing bio-based product market / Governments and investors must co-operate / Bioplastics industry often suffering from underinvestment
Weaning the USA’s economy off petroleum-based products is a tough battle, especially when oil has a distinct price advantage over alternative methods of production, despite industrial biotechnology providing an environmentally-friendly alternative. A recently published report from the Milken Institute (Santa Monica, California / USA; www.milkeninstitute.org), an independent economic think tank whose mission is to improve the lives and economic conditions of people in the US and around the world, examines the challenges facing the industrial biotechnology sector and identifies market- and policy-based responses.
“Turning plants into products: Delivering on the potential of industrial biotechnology” details the results of the institute's “Financial Innovations Lab”, in which stakeholders and experts discussed how the US could facilitate the flow of private capital into the production of bio-based products. It outlines practical, sustainable approaches for creating an economic environment where industrial biotech companies can become established and grow. According to Joel Kurtzman, executive director of the Milken Institute Center for a Sustainable Energy Future, said: “There is much appeal for policymakers to invest in expanding the biotech-derived chemical industry. In the long term, it has environmental advantages and offers an alternative to foreign oil. In the short term, it offers the immediate benefit of rural employment opportunity.”
The report says that making plastics and other consumer goods from bio-based sources can address many environmental and sustainability issues, depending on the specific product and taking into account all the inputs and outputs over the life of the product through a full life-cycle assessment of its environmental impacts. However, the industrial biotechnology industry faces strong competition from petroleum. Petroleum-based products are often cheaper and industrial biotechnology has the disadvantage of being a new industry that is perceived as suffering from underinvestment. The institute adds that this may be due largely to short production runs and limited production capacity for bio-based products.
Petroleum prices do not include negatives such as polluted runoff and protecting the petroleum supply line from overseas. As a result, prices for petroleum-based products underestimate the full market and environmental cost of their use. The US biotechnology industry attributes some of the success of bio-based products to the programme that became “BioPreferred” – initiated in the 2002 Farm Bill, and expanded in the 2008 Farm Bill – see Plasteurope.com of 25.01.2011. The programme encourages federal agencies and contractors to purchase bio-based products and provides a voluntary labelling program to promote bio-based products.
A growing desire by consumers for environmentally preferable products and by manufacturers for new and novel product applications has also spurred industry development, the institute says. The debate continues over whether biomaterials are better for the environment than petroleum-derived products, accounting for energy consumption on the front end of production, the institute says. Opponents argue that, while industrial biotechnology offers the opportunity to eliminate fossil fuels from certain products, petroleum is still essential for operating equipment in an agricultural environment. However, the report says, this argument previously used against biofuels is based on old data and faulty assumptions. In fact, the net energy balance for corn-based biofuels is over 2.3 times more than the energy input, and that return is rising as the industry gains experience and efficiencies of scale.
Overcoming these challenges requires careful coordination between academia and the different stages of the value chain that require R&D and intellectual property resources. The report concludes that overcoming the challenges facing the industry and developing bio-based products will require both the participation and organised cooperation of local, state and federal governments, the investment community, trade organisations and academia. Currently, the complexity of the industry and the significant investment required to commercialise a bio-based product have resulted in low investment participation and large attrition rates, particularly for underfunded biofuels start-up companies.
The “Financial Innovations Lab” was developed and funded by the Milken Institute and the Office of Energy Policy and New Uses of the US Department of Agriculture. It was convened in July 2010 in Washington, DC / USA and brought together leading scientists and technologists, bio-based product manufacturers, banks, institutional investors, venture capitalists, public officials and representatives from think tanks and industry associations. The event identified solutions for encouraging investment and helping the industry grow.
e-Service:
“Turning plants into products: Delivering on the potential of industrial biotechnology” as a PDF document
“Turning plants into products: Delivering on the potential of industrial biotechnology” details the results of the institute's “Financial Innovations Lab”, in which stakeholders and experts discussed how the US could facilitate the flow of private capital into the production of bio-based products. It outlines practical, sustainable approaches for creating an economic environment where industrial biotech companies can become established and grow. According to Joel Kurtzman, executive director of the Milken Institute Center for a Sustainable Energy Future, said: “There is much appeal for policymakers to invest in expanding the biotech-derived chemical industry. In the long term, it has environmental advantages and offers an alternative to foreign oil. In the short term, it offers the immediate benefit of rural employment opportunity.”
The report says that making plastics and other consumer goods from bio-based sources can address many environmental and sustainability issues, depending on the specific product and taking into account all the inputs and outputs over the life of the product through a full life-cycle assessment of its environmental impacts. However, the industrial biotechnology industry faces strong competition from petroleum. Petroleum-based products are often cheaper and industrial biotechnology has the disadvantage of being a new industry that is perceived as suffering from underinvestment. The institute adds that this may be due largely to short production runs and limited production capacity for bio-based products.
Petroleum prices do not include negatives such as polluted runoff and protecting the petroleum supply line from overseas. As a result, prices for petroleum-based products underestimate the full market and environmental cost of their use. The US biotechnology industry attributes some of the success of bio-based products to the programme that became “BioPreferred” – initiated in the 2002 Farm Bill, and expanded in the 2008 Farm Bill – see Plasteurope.com of 25.01.2011. The programme encourages federal agencies and contractors to purchase bio-based products and provides a voluntary labelling program to promote bio-based products.
A growing desire by consumers for environmentally preferable products and by manufacturers for new and novel product applications has also spurred industry development, the institute says. The debate continues over whether biomaterials are better for the environment than petroleum-derived products, accounting for energy consumption on the front end of production, the institute says. Opponents argue that, while industrial biotechnology offers the opportunity to eliminate fossil fuels from certain products, petroleum is still essential for operating equipment in an agricultural environment. However, the report says, this argument previously used against biofuels is based on old data and faulty assumptions. In fact, the net energy balance for corn-based biofuels is over 2.3 times more than the energy input, and that return is rising as the industry gains experience and efficiencies of scale.
Overcoming these challenges requires careful coordination between academia and the different stages of the value chain that require R&D and intellectual property resources. The report concludes that overcoming the challenges facing the industry and developing bio-based products will require both the participation and organised cooperation of local, state and federal governments, the investment community, trade organisations and academia. Currently, the complexity of the industry and the significant investment required to commercialise a bio-based product have resulted in low investment participation and large attrition rates, particularly for underfunded biofuels start-up companies.
The “Financial Innovations Lab” was developed and funded by the Milken Institute and the Office of Energy Policy and New Uses of the US Department of Agriculture. It was convened in July 2010 in Washington, DC / USA and brought together leading scientists and technologists, bio-based product manufacturers, banks, institutional investors, venture capitalists, public officials and representatives from think tanks and industry associations. The event identified solutions for encouraging investment and helping the industry grow.
e-Service:
“Turning plants into products: Delivering on the potential of industrial biotechnology” as a PDF document
31.05.2011 Plasteurope.com [219473-0]
Published on 31.05.2011