Opportunities and Challenges in the EU.
If you have ever wondered how the ancient Greeks and Romans built their catapults without rubber, the answer lies in ingenious use of natural materials. They relied on what we would now call a circular bioeconomy, making the most of every available resource.
Rubber was not known in the ancient Mediterranean world; it was introduced to Europe much later, after Spanish explorers encountered it in what is now Mexico in the 16th century. It was not until the 19th century that rubber became widely useful for industrial applications, following Charles Goodyear’s discovery of vulcanization.
So how did ancient armies create elastic power for their siege engines? They used sinews and tendons from cattle and other animals, whether brought with the army or captured locally to feed troops during a siege. Because these tissues are rich in collagen and elastin, they could be twisted into cords and ropes that acted like springs and elastic bands.
In those days, very little organic material went to waste.
Legislation
Bioeconomy refers to the use of biomass. Biomass is defined as non-fossilized organic matter—that is, material that can be renewed over a relatively short period of time, such as days, seasons, or years. In other words, it includes all living flora and fauna, as well as their associated residues and by-products.
The use of biomass as an alternative energy source gained renewed attention in the 1980s in the USA and was later incorporated into European policy through the European Commission’s Renewable Energy Directive (RED I) (2009/28/EC), adopted in 2009. RED I is no longer in force, as it was replaced to better align with the more ambitious climate targets for 2030 and 2050, and was eventually repealed in June 2021.
In 2018, the European Commission introduced RED II (2018/2001/EU), which established a target of 32% renewable energy by 2030. This directive entered into force in July 2021, following a provisional agreement between the European Parliament and EU member states. As part of the “Fit for 55” legislative package, RED III and its revision RED IV (2023/2413/EU) was adopted in November 2023, raising the binding target to at least 42.5% renewable energy, with an ambition to reach 45%.
Specific targets were also established for key energy-consuming sectors, including transport, industry, and buildings, particularly in relation to heating and cooling. In addition, the range of renewable energy sources was expanded beyond biomass to include wind, solar, hydropower, geothermal, and ocean energy.
At the same time, biomass use has been refined to reduce competition between food and fuel production, with greater emphasis on residues and waste streams such as straw, manure, algae, sewage sludge, and other organic waste. However, wood and wood-based products remain the dominant biomass source. The cascading use principle is increasingly emphasized, meaning that wood should first be used for products and only later for energy generation. Even so, woody biomass still accounts for about 70% of biomass used for energy, including primary wood from logging residues and secondary wood products such as sawdust and black liquor from paper mills.
Biomass use
In the context of achieving the EU-27’s Green Deal net-zero targets by 2050 and given the current political reality of energy supply security, burning biomass may appear to be a quick fix, but it is neither a long-term solution nor a meaningful end goal. In fact, it represents a thoughtless waste of valuable matter. Burning carbon-containing matter releases carbon dioxide (CO2), other greenhouse gases (GHGs), and fine particulates. Although trees and plants are renewable and absorb CO2 during growth, the long-term balance (the payback period) does not amount to net zero but to an actual increase. Trees and other plants generally take longer to grow than the rate at which they are consumed. Burning organic matter generates more GHG emissions than fossil fuels such as natural gas for the same amount of useful energy. In addition, intensive biomass harvesting can cause biodiversity loss through habitat destruction and the degradation of complex ecosystems, reducing the capacity of forests and other ecosystems to act as carbon sinks.
More importantly, much of the organic matter that is currently wasted or burned contains valuable functional and structural molecules that can help transform today’s fossil-fuel-based socio-economic system. Biomass is a short-term carbon source that, when combined with greenhouse gas (GHG) capture and utilization—such as CO₂ and methane (CH₄)—can enable net GHG removal while replacing fossil carbon in fuels, chemicals, and materials. This requires a fundamentally different approach to biomass and biomass “waste”. Rather than treating the latter as a disposal problem, it should be seen as a source of non-valorized chemical and material feedstock, especially since fossil fuels for energy can increasingly be replaced by electrification and hydrogen.
The contribution of a biomass-based bioeconomy beyond energy, food, and feed lies primarily in its role as a source of chemicals and materials. Modern societies cannot function without the chemicals and materials that are currently supplied by fossil-fuel-based feedstock and biomass can provide for both commodity and high-value applications.
Forestry and agriculture are traditionally the sectors that provide the feedstock for the bioeconomy to work. For 2022, in the EU-27, it was estimated that the total sources of biomass domestically produced and imported amounts to about 1’000 million tonnes of dry matter per year (tdm/y). About half is produced from the agricultural sector with 80% destined for feed and 20% for food. The remainder is roughly 27% of forestry matter of which 45% is incinerated and 55% is used as material, and 23% biowaste from agriculture, industry and households. The latter represents about 80 to 90 million tonnes of wasted food and 140 to 150 million tonnes of wood waste. An additional 200 million tdm/y comes mainly from wood processing by-products and recycled paper and wood (~75%) and recycled biowaste making the yearly biomass supply 1’200 million tdm/y.
For 2024, according to Eurostat, approximately 224 million tonnes of chemicals, including polymers, were produced in the EU-27. Only about 2–3% of this output is biobased, mainly bioethanol, which suggests a substantial untapped potential for biowaste-based chemicals and materials across multiple industrial sectors.
This requires a far more efficient and effective use of biomass, including, among other opportunities, upgrading the collection and use of food and feed waste; valorizing food and feed processing side streams; making better use of crop residues by using the entire plant; ensuring the sustainable use of aquatic biomass; upcycling microbial biomass from fermentation processes; valorizing sludges and other urban wastes; and improving the use and re-use of natural fibers. In this context, biomass should also be seen as a carbon sink that helps manage carbon by storing it rather than releasing it into the atmosphere through incineration.
None of this is entirely new: in nature, the many conversion processes associated with life and death have been doing this for millions of years. Natural GHG emissions were kept in check mainly by forests and oceans. Except in the last 200 years humanity decided to develop a global village founded on abundant and cheap fossil fuels. It forgot about the biosphere being a crucial living space and instead turned it into a free-for all “gold rush” opportunity in search for wealth.
Challenges
An operational circular regenerative bioeconomy is therefore one important pathway toward net zero and a sustainable socio-economic future in the EU-27. The bioeconomy aims to balance economic, environmental, and social interests while becoming an integrated part of nature’s own processes. Biomass is a carbon-rich, renewable feedstock that is inherently circular and has an essential role in managing GHG emissions as a carbon sink. Its positive impact on global climate conditions helps ensure a livable future for humanity and all fauna and flora known today.
Yet, despite these anticipated advantages, the socio-economic transition from a fossil-fuel-based world to a biomass-based one requires a profound shift in mindset. First, local feedstock sourcing and production entail moving away from the current centralized system, which depends heavily on global logistics and is vulnerable to geopolitical volatility. Second, the prevailing replacement approach—producing the same products with different resources while continuing to rely on existing infrastructure, value chains, and business models—creates immediate socio-economic barriers that are difficult to overcome.
In the EU-27, many bio-based innovations fail during the transition from laboratory research to commercial production. Demonstrating technical and economic viability, and progressing from pilot plants to full-scale manufacturing, are often critical bottlenecks due to the substantial capital and operating expenditures involved. As a result, the targeted chemicals and materials are frequently less cost-competitive than fossil-fuel-based incumbents. Moreover, limited availability of private risk capital, high taxation, and a general reluctance to take risks further exacerbate these barriers. In addition, most R&D, pilot, and commercial scaling initiatives depend on public funding, which is often associated with lengthy bureaucratic procedures. Inconsistent national legislation, policy incoherence, and diverging priorities complicate cross-border bioeconomy value chains and limit access to sufficiently large markets. Lengthy and complex regulatory approval processes place EU-27 companies at a disadvantage relative to competitors in the USA and China. Start-ups often face limited access to open-source infrastructure for upscaling, as well as a mismatch between current workforce skills and the requirements of advanced biomanufacturing and digitalized bioeconomy processes.
In addition, a NIMBY (“not in my backyard”) mentality, biodiversity debates, and the delicate discussions on how to balance food, feed, energy, and material needs for the approximately 450 million inhabitants of the EU remain open challenges.
Notwithstanding these severe structural challenges facing entrepreneurs, it is encouraging to observe that the bioeconomy is very slowly gaining momentum. While new ways of doing business are still emerging, technologies are advancing, and market niches are being successfully addressed with bio-based chemicals and materials. Commercial upscaling remains however a challenge.
The European Commission finally has recognized that accelerating the growth of the bioeconomy critically depends on decisively addressing the many barriers outlined above. On 16 December 2025, it published a proposal for a regulation—a legislative act binding in all EU Member States—to establish measures that strengthen the biotechnology and biomanufacturing sectors: the European Biotech Act. This proposal builds on the 2018 Regulation on Organic Production and Labelling of Organic Products (Regulation (EU) 2018/848), which entered into force on 1 January 2022. The current proposal focuses mainly on health biotechnology and is expected to address, in a second phase (Q3 2026), the broader biotechnology ecosystem, including industrial and agricultural biotechnology, food and feed applications, and bio-based materials. However, it remains to be seen to what extent, and how quickly, additional EU-27 regulation can shift investments from a fossil-fuel-based economy toward a competitive bioeconomy. More broadly, a major political and socio-economic question remains: how can the EU-27 balance its priorities of strong social protection and income equality with the higher per-capita wealth and growth levels seen in the United States, in order to better stimulate entrepreneurship? All this in a volatile climate of extremism, wars, and existensial challenges of energy and critical material supplies threathening economic survival and a functioning welfare system.
Clearly, to fully exploit the chemicals and materials potential of biomass further research and innovation are needed—not only in science and technology, but also in socio-economic creativity. It is essential to move beyond the “replacement model” and the prevailing mindset of “making it somebody else’s problem,” otherwise known as the take-make-waste practice.
Still, over millions of years, natural processes have generated countless functional and structural building blocks, resulting in remarkable chemicals, materials and structures that shaped functioning ecosystems. There is much for humanity to learn before it can integrate itself sustainably into the biosphere. This will be a topic of Bioeconomy: A Path Towards Sustainability. Part 2: Innovative chemicals and materials.
