Why does the bioeconomy need circularity?

Replacing petrochemicals with biobased materials can cut the environmental impacts of industry. However, circularity is just as important as renewable materials when it comes to building sustainability into supply chains. Here we explain why.

What’s the difference between circular and biobased?

A biobased material or chemical is made from raw materials that are products of biological growth: wood, algae, or the shells of crustaceans are just some examples. These basic raw materials can be turned into a staggering range of more complex substances with different applications.


Biobased materials are often held up as being sustainable alternatives to products made from petroleum or other mined substances, minerals and metals. However, being biobased is sometimes not enough to make it sustainable. Often, what’s missing is circularity.


Many biobased materials can also be circular but the two characteristics are not the same.


Circular products are those made from waste byproducts or by repurposing an older product that has reached the end of its life. All circular manufacturing revolves around turning low value materials destined for disposal into valuable raw materials that can be turned into goods market value.


A circular product is also capable of being reused in new, valuable functions once it has reached the end of its own working life. This is the mark of a fully circular product.


Circular manufacturing can be sustainable for two main reasons. First, circular goods can cut industry demand for new raw materials. Using waste materials already produced by the economy displaces the need for mining and energy that would have otherwise been needed to extract and process virgin materials.


The second advantage of circular materials is that it dramatically cuts the amount of industrial waste that goes to landfill, often the only option for non-circular goods. This practice is damaging ecologically as it poisons the environment, harming human health and biodiversity.

The ideal biobased and circular product

An example of a strongly sustainable biobased material that is also circular would be a compostable packaging material made from agricultural wastes.


The use of agro-waste is an important element in the sustainability of this hypothetical packaging product. It gets rid of the need for petrochemical feedstocks used in conventional plastic bags. Using waste is also better environmentally than using farmed crops grown specifically for the packaging industry since agro-waste needs no additional inputs to grow.


For a even more sustainable product, the circular agro-waste packaging material would also be designed so that when it degrades, it releases plant nutrients contained in its biobased chemistry back into the soil.


We could go a step further to ensuring maximum sustainability. Achieving full circularity often goes beyond the technical and material specifications of the object itself – it also depends on the regulations and cultures that revolve around it.


The hypothetical agro-waste packaging could be collected and transported to farms for composting. This circular collection service would support more resource-efficient agriculture that eases reliance on synthetic fertilisers. If thrown away by consumers at random, the nutrients would not be returned to the earth in a concentrated form that adds to food system productivity and sustainability. This essentially means wasting vast amounts of potential plant feed.

The problem with non-circular biobased

On the other hand, some biobased materials that are not circular can be environmentally damaging. This is despite their renewable nature. Why is this?


First of all, it is true that biobased materials usually mean less greenhouse gas release in manufacturing compared to petrochemical equivalents. This is the case regardless of any other considerations, like whether renewable energy or fossil energy was used to power the process.


However, the benefits of biobased over petrochemicals are less clear if we look beyond the manufacturing stage – just one part of a product’s life cycle.


Let’s look at the end of life. The biobased materials’ benefits over petrochemicals narrows considerably if they cannot also be recycled once they have been used.


The reusability of a product determines its sustainability. If immense amounts of energy and material get poured into farming new crops for biobased goods that are eventually landfilled, the environmental impacts of agriculture buildup. This is because each time we discard a product, replacing it demands more water, pesticides, and fertiliser.


By contrast, if raw materials that make up a single biobased product are re-used over and over again, the initial impacts of sourcing, manufacturing, and transporting it are spread across a much wider range of uses. If the raw materials are waste, it eliminates the environmental costs of cultivating crops altogether, saving us having to extract fresh energy and raw materials to replace products.


The environmental benefits of biobased also narrow if we look beyond the single metric of greenhouse gas release. This is because even renewable and organic matter take up resources to grow, harvest and distribute. Just like any form of intensive agriculture, farming new crops for industrial use takes a toll on land and wildlife.


Non-circular biobased materials can become landfill fodder that is just as toxic as petrochemical items if they are not circular. Despite the differences in feedstock between biobased and petrochemical plastics, most become chemically indistinguishable during the manufacturing process. Most biobased plastics are not built with the environment in mind and are highly toxic as they degrade in the environment.

EU emphasises biobased circularity

The EU has been consistently interested in expanding biobased economies that are circular for reasons of sustainability since its 2015 Closing the Loop: The EU Action Plan for the Circular Economy.


Now, circularity is a principle that the EU applies in every branch of its climate and conservation policy. In the European Green Deal, a sweeping regulation that stretches from industry to agriculture, circularity is one of the main routes that the region is implementing to reach their climate goals.


The EU also takes circularity seriously even where renewable materials are concerned. After all, the bloc’s main bioeconomy funding body is called the Circular Bio-based Europe Joint Undertaking (CBE JU). The CBE JE’s most recent circular biobased initiative has been the SYMBA project. This aims to implement an AI database that generates ideas for how to create regional zero-waste value chains that efficiently combines circularity with renewability.


Circularity is partially about making finite resources go further, something that the EU is now highly sensitive to after the sharp reduction of Russian natural gas. In the post-Ukraine war era, circular industry is also a security strategy, part of making supply chains tighter, more localised, and less vulnerable to disruption by foreign entities.

Keeping biomass in the system

The clearest sign of the EU’s commitment to circularity is that the bloc leans heavily on a rule called the cascading use of biomass.


The rule helps to decide which industries and end uses should be prioritised when it comes to allocating biomass. Biomass must go to the most high value industry possible each time it is used. The cascading use principle was enshrined in law in the Renewable Energy Directive RED, which came into force in 2009.


The purpose of cascading use is twofold: making the most efficient use of finite biomass resources as possible and, second, avoiding burning the biomass for energy for as long as possible and thus keeping it in the system as raw materials for more durable products.


Burning for energy is usually the most low value use for biomass as well as the most inefficient way of using biomass as it means the material gets instantly depleted. Instead, it ends up in more durable goods that have potential for recycling.


The EU is now trying to build the cascade rule into all its regulations going forwards.


Circular Investment is one of the few investors in this space. Their focus is on getting circular raw materials into players in the bioeconomy.


Circular Investment and its investment company Biobased Trading specialise in identifying and certifying circular biobased raw materials, providing other services such as phytosanitary checks that assure the end user of feedstock origin and quality.


The company says they set up specifically to target the growing market for ‘alternative’ raw materials as industries transition away from fossil materials.


Circular Investment is a rare one stop shop in the still-fragmented, intermittent market for circular biobased raw material supply. Their sources include forestry byproducts from hardwood or softwood species, organic byproducts like proteins, sugars, and starches from horticulture and agriculture, as well as non-biobased waste byproducts from the construction industry.


Still, finding enough circular biomass in general is a hard task for companies as supply chains have yet to scale to the level seen in legacy industries like oil. More EU regulation, for example creating market demand for circular biobased goods only, is needed for investors and suppliers in this segment to really get off the ground.