It is about much more than just coordinating events,’ William Stevens of Tech Tour pointed out in his welcome speech: ‘It is about creating a coalition working together to bring solutions to market. This includes the Bio-based Industries Consortium, Circular Valley, Bayer, the Ministry of Economy, Innovation, Digitalisation and Energy in North Rhine-Westphalia, ZAZ Ventures and ShapingBio. Stevens emphasises the value of such partnerships in fostering meaningful innovation.
Opportunities and challenges
Dirk Carrez, Executive Director of the Bio-based Industries Consortium (BIC), addressed the challenges facing bio-based industries in Europe. He shed light on several new studies on the bottlenecks, obstacles and gaps that make financing bio-based projects difficult, such as capital intensity, technological and market risks, and limited access to finance in the scale-up and pre-commercial phases. There is a clear need for more public and private funding, as well as targeted instruments such as partnerships and specific support for SMEs and startups.
Key bottlenecks are the slow and complex approval processes in Europe, often leading companies to migrate to the US, and a lack of incentives or regulatory pressure for bio-based products. In addition, uncertainty about the availability of sustainable biomass plays a role. In practice, however, only about 25% of all available biowaste is actually used.
New instruments
Carrez outlined some possible solutions: ‘We need to make public funding more accessible for scale-up in existing pilot plants. We need new, good instruments. For example, the voucher system is useful, but sometimes more money is needed than a small voucher offers, especially for startups and SMEs.’
Financing the construction of an initial factory, for example, is capital-intensive and risky, but it is indispensable to show proof of concept, to convince investors that processes work. This is even more true for building a first production plant or ‘flagship.’ The high risks deter investors.
Incentives from governments could change this. Consider including renewable carbon as a criterion in European regulations. European regulations could also stimulate demand for bio-based products, so that companies scaling up actually have the opportunity to introduce them. Carrez: ‘Addressing all these challenges requires improvements in financing, regulation and biomass utilisation, as well as better coordination between industry, regions and governments.’
In a panel session, a number of stakeholders, including startups, investors and larger companies, were then given the chance to highlight the challenges and opportunities within the bio-based industry.
Isaac Berzin of VAXA Technologies stressed the importance of value creation: ‘We cannot compete with China on cost, so we need to create value, such as our carbon-negative ingredients. It may well be that a natural pigment is 10 times more expensive than a chemical pigment, but if you include the carbon footprint of the chemical pigment in the equation, the situation changes. That makes it attractive to larger companies. Purchase agreements are furthermore crucial: ‘A purchase agreement means acceptance by the big players.’
Rhiannon Rhees of PlantSea pointed out the difficulty of capital investment: ‘Pilot projects with reputable customers have helped us, but we are still working on off-take agreements. That’s all we can do to get closer to our milestones.’
Roger Ottenheym of Mevaldi thinks the field is still too much about pioneering. ‘We like to compare ourselves to Silicon Valley, but it doesn’t feel like business yet. It’s more like the software industry in the 1980s, when everyone worked from garage boxes. The step from lab to large-scale production is difficult.’ Successful examples, i.e. the Googles or Microsofts of the bio-based industries, are lacking. ‘We need some good success stories to attract more investment,’ he says.
Lengthy timelines
Wouter Van de Putte of Capricorn Partners highlighted the issue from the investors’ angle. He emphasised the lengthy timelines: ‘Ten years to go from lab to commercial scale is already optimistic, it rather takes 15 years. That doesn’t always fit the venture capital model.’ To accelerate, he advises startups to adapt as much as possible to already existing value chains and technologies: ‘Minimise disruption and make sure you fit within the existing infrastructure.’
Ines Kolmsee of Matterwave Ventures sees certification requirements in particular as a major obstacle, especially when it comes to using waste in products. ‘Extracting biochar from wastewater, for example, is often not allowed, despite safe techniques for doing so, such as pyrolysis. Decision-makers need to be better informed about the potential of biowaste. However, startups often do not have the means to influence regulations. Regulators should therefore support change more actively themselves.’
Bigger not always better
Rob Beekers of Cargill represents the large industries and notes that many of the aforementioned studies on constraints for investors identify the lack of policy frameworks and the small scale of bio-based production as bottlenecks. He agrees, but notes that bigger is not always better. ‘Our largest European starch refinery, with a capacity of 2,000 tonnes of grain per day, is four times smaller than our largest plant in the US, but is very viable as long as raw material and energy costs are comparable. An even larger plant would lead to challenges in sourcing raw materials and selling products.’
Beekers further urges investors not to consider the use of primary sugars or vegetable oils as a risk factor, as this is an artificial barrier put up by policymakers that discourages innovation. ‘While I believe in using waste and residues as renewable feedstocks, we cannot make progress without also looking at primary sugars, starches or vegetable oils.’
He advises startups to focus not only on technology, but also on the challenges on both the upstream and downstream side. ‘Make sure you have strong partners. Companies like ours should not only invest, but also use their other capabilities to support startups. It’s about more than capital alone.’
André Convents of Procter & Gamble warns against the optimistic notion that consumers are willing to pay even a single cent more for a product made from renewable materials that looks and performs exactly the same as an unsustainable product. Even with incentives, it is difficult to build a long-term business case with such drop-ins. ‘That’s why we are trying to find bio-solutions that deliver new functionalities, new benefits and new solutions, so that consumers do agree to pay more for them. Only if that succeeds will we create added value, which can then be distributed along the value chain, making the business case viable from an investment perspective.’
Pitches
Some 35 entrepreneurs took advantage of the Tech Tour Bio Based Industries Programme to present their companies and products in front of several panels of investors. From all the pitches, the experts selected eight winners: aerogel-it, Arda Biomaterials, Blue Ocean Closures, Mevaldi b.v., Origin by Ocean, Qorium B.V., Relement and SenseUP GmbH.
Bio-based superinsulation
Once developed for space travel, aerogels can now make a significant contribution to making construction more sustainable and to the energy transition. ‘Green super materials’, Marc Fricke, CEO and co-founder of aerogel-it calls them. The German company developed innovative bio-based insulation materials from lignin, among others, with pores at the nanometre scale. As a result, they have a large internal surface area and consist largely of air, which explains their light weight and high thermal insulation value. They are used for various applications, from super insulation of industrial pipelines or the outer shell of buildings to high-tech equipment and the batteries of electric cars. Aerogel-it is currently fully self-funded and is looking to attract investors to expand into new markets.
From beer to leather
UK-based Arda Biomaterials converts waste streams from the beer and whiskey industries into new biopolymers. Brett Coffen, CEO and co-founder of Arda presented New Grain during the Tech Tour: ‘We are making a plastic-free, plant-based leather substitute that does not require slaughtering cows.’’ The company uses supramolecular chemistry to replicate animal proteins, such as collagen, using grain proteins left over from the beer brewing process. By developing a completely ‘vegan leather’, Arda is helping to reduce people’s dependence on animals.
Leather from the bioreactor
Netherlands-based Qorium is also targeting the leather market, but takes a different approach, cultivating collagen from biopsies of bovine fibroblast cells. The company has developed a scalable process for producing collagen sheets in bioreactors and is now aiming to build a production facility that will reach a capacity of 600,000m2 of cow leather per year. According to CEO Michael Newton, culturing leather involves a ‘relatively simple molecular process’, a spin-off from the work of Maastricht-based cultured meat professor Mark Post. ‘The result can be processed directly in existing tanneries. With this, we offer a viable alternative to traditional leather production. We retain the quality, consistency and profitability of real leather, without the ethical and environmental issues that come with it.’ In addition to high-value applications such as bags and car seats, Qorium is now also exploring innovations such as incorporating Kevlar to make leather wear-resistant.
Ocean-friendly caps
Blue Ocean Closures makes ocean-friendly caps from recycled cellulose fibres. The sustainable screw caps are biodegradable in (ocean)water but just as strong as plastic. The Swedish company has been around for three years and has already launched a number of products, including food packaging with a coating that acts as a recyclable primer. “Thanks to its UV-reactive surface functionality, the primer adheres to almost any organic surface without pre-treatment”, says CEO Lars Sandberg. It allows manufacturers to add barrier layers to packaging without adding glue and replace difficult-to-recycle materials, such as laminated films.
Chemistry from sugars
Using ‘New Age Technology’, Dutch company Mevaldi produces green chemical building blocks from simple sugars. ‘These platform chemicals open up a whole new range of sustainable applications,’ says CEO Roger Ottenheym. ‘Our molecules are 100% bio-based and act as performance enhancers, especially when it comes to elasticity.’ Mevaldi is the first producer that has succeeded in marketing bio-based 3MPD at competitive prices, under the brand name Pentonext. This is a key ingredient in the production of recyclable polyurethanes for coatings, adhesives and textiles, for example.
Valuable ingredients from invasive algae
Origin by Ocean from Finland has developed a patented biorefinery process to transform invasive algae, such as Sargassum, into valuable ingredients. ‘These ingredients replace conventional chemicals, with their high carbon footprint and unsustainable value chains,’ says Director of Communications Noora Westerlund. Although Origin by Ocean is in its pre-commercial phase, they already have customers using their products. ‘So we are already active in the market, but we want to scale up and are looking for partners to support us in this. That way, we can make a measurable impact, both in the industry and in the health of ocean regions.’
Improved performance with bio-aromatics
Aromatics are among the most widely used chemicals today. Usually, they are produced from fossil feedstocks. In coatings and composites, for example, they provide important properties such as hardness and scratch resistance. Unfortunately, aromatics are usually made from fossil feedstocks. The Dutch startup Relement has developed a platform for producing bio-aromatics made from renewable raw materials.
‘They are the only functional bio-based aromatics on the market today,’ says CEO Roger Blokland. ‘They offer a sustainable alternative to aromatics from petrochemicals, but also perform better. As a result, fewer chemicals are needed, making them cost-effective.’ Meanwhile, Relement is working with partners on the market launch, including the multinational chemical company Solvay. The company is still looking for co-investors to set up a commercial production line. ‘We are now targeting a niche market, but one of 14 billion,’ he says.
Selective crop protection
Germany-based SenseUP focuses on developing effective, selective and environmentally friendly pesticides to protect crops. A spin-off of the renowned Institute for Biotechnology at the Forschungszentrum Jülich (https://www.fz-juelich.de/en/ibg/ibg-1), the company aims to use innovation technology to make agriculture more sustainable.
SenseUp’s patented natural evolution platform technology uses microorganisms to produce dsRNA (double-stranded RNA) in an affordable and scalable way. It is used as the active ingredient in SenseUP’s pesticides against various pests harmful to crops, such as Fall Armyworm (Spodoptera frugiperda) and Botrytis fungi. Its specific action minimises the impact on other parts of the ecosystem.
The winners of the pitches were honoured at the end of the Tech Tour Bio Based event, where unfortunately only three entrepreneurs were present.
Next events
There are two Tech Tour events a year in which BIC is involved as co-organiser. The next opportunity is the Tech Tour Circular 2025 Programme, on 23 and 24 April in Ghent (Belgium). This will specifically cover the subsectors alternative food systems and circular agriculture, biofabrication and circular building materials, biorefinery and biomolecules, circular plastics and bio-based polymers, alternative water use and resource recovery. For more information and registration, visit the website.
This article was produced in collaboration with the Bio-based Industries Consortium (BIC).
Image above: Dirk Carrez presented a panel discussion about how to accelerate and facilitate investment to develop the European Bioeconomy.
