Can a bioeconomy take root in Europe?

From the forested coast of southern Finland to the hills of central Germany and the mountain valleys of Slovakia and France, activity is stirring on the European continent. Shovels are breaking ground, and craftspeople are at work building large chemical plants. While the products these plants make will look familiar, the raw materials won’t. Bioproduction, powered by microbes and biomass, is being harnessed to meet the challenge of reindustrializing Europe.

For this enterprise to get off the ground, the first requirement is a desire for sustainably produced molecules. In Europe, that demand appears to be present.

“The customer base is in Europe,” says Wayne Ashton, senior vice president of home and personal care at International Flavors & Fragrances (IFF), a maker of ingredients for consumer products. “It's also important to say that the European customers are probably a little bit more advanced in wanting sustainability.”

In March, the company announced a 50-50 joint venture with Kemira to use IFF fermentation technology to turn sugars into biopolymers at IFF’s facility in Kotka, Finland, which currently produces fructose and xylitol. The polymers, which can be derivatized, can replace acrylics and acrylates in products such as paper, detergents, and nonwoven fabrics.

The venture, called Alpha Bio, will build a plant costing about $145 million. It is expected to open in 2027 with the capacity to convert up to 44,000 metric tons of plant sugars into the new polymers. Ashton says the decision to partner with Kemira was based on the compatibility of the polymers with Kemira’s existing products for the paper industry and water treatment. Technical considerations aside, Ashton says Europe is the right place for investment in bioproduction because the demand for sustainability is there.

Legislation governing microplastics and European Union initiatives like the European Green Deal set sustainability targets. While regulation in some cases may be 10–15 years away, companies want to be ready.

It’s not just expected regulation that supports biobased manufacturing in Europe. “Some of the major [consumer packaged goods companies] are very clearly setting aggressive, ambitious sustainability goals and wanting to make sure they achieve them,” Ashton says. And when it comes to the home and personal care business, many of the large players, including Henkel, L’Oréal, and Unilever, are European.

“Some of the most preeminent companies looking at sustainability are based” in the region, Ashton says. “And with the regulations and the customers driving things, it just makes sense to be there.”

Indeed, Europe as a continent has ingredients for growing a bioeconomy that other regions don't. Unlike the US, which under President Donald J. Trump seems to be embracing fossil fuels, Europe, at least for now, remains committed to combating climate change. This commitment has millions of euros attached to it and, combined with the expertise of scientists in Europe in turning biomass into molecules, could allow the region to succeed at building a true bioeconomy.

Standing in the way, though, is burdensome regulations, including on emissions and biomass use, and a lack of fast-moving start-ups that can exploit Europe's research and technology advantage. While technology, desire, and opportunity appear present in Europe, biomanufacturers also need to find funding to scale up production and keep their costs competitive with their highly efficient petroleum-based competitors.

Biomass fuels sustainability in Europe

Although Europe doesn’t boast as robust a sugar and bioethanol processing industry as the US does, the data show that it does have the raw materials—both food and nonfood—to make biomaterials. A 2025 study commissioned by the Bio-based Industries Consortium and the Renewable Carbon Initiative found that Europe has the potential to use biomass to cover 20% of overall carbon demand for the chemical and derived-material sector by 2050.

European agricultural companies are getting involved with bioproduction firms to find ways to use all available streams.

In May, for example, Südzucker, Europe’s number 1 supplier of sugar products, renewed a raw material partnership with the biotech company Afyren. Under the agreement, Südzucker supplies nonfood agricultural by-products as feedstocks for fermentation-based conversion to a family of seven carboxylic acids—chemicals such as butyric acid and valeric acid—at Afyren’s facility in Carling Saint-Avold, France.

To get carboxylic acid production started, Afyren received funding from the European Union’s Horizon 2020 research initiative—which provided roughly $90 billion between 2014 and 2020 to European research and innovation—and the Circular Bio-based Europe Joint Undertaking. Afyren also partnered with the public investment bank Bpifrance on the project. The plant will produce 16,000 metric tons (t) per year of biobased acids when it operates at full capacity.

Separately, CropEnergies, a large ethanol producer that is part of the Südzucker group of companies, is opening a facility in 2026 in Elsteraue, Germany, to produce ethyl acetate from its biomass-derived ethanol. When it opens, the plant will produce 50,000 t of the solvent per year while also generating hydrogen as a coproduct.

Sustainability costs money, usually

Sustainable solutions do come at a cost. “Normally, biotech processes are not cheaper than processes from petroleum,” says Andreas Heyl, innovation manager for Sprind, Germany’s federal agency for breakthrough innovation, and an independent consultant.

Bioproduction must quickly convert biomass to carbon sources, in the same way that plant matter from eons ago became coal and oil. Mimicking that process in fermenters is not easy. Furthermore, as is the case for the polymers produced at Alpha Bio, customers may need to pay for extra formulation steps to integrate the sustainable molecules into their own production facilities.

Given the decades of optimization of petroleum-based counterparts and fluctuating prices of agricultural feedstocks, even drop-in molecules like the carboxylic acids produced by Afyren or the green ethyl acetate produced by CropEnergies, which are identical to petroleum-based versions, may cost more.

To compete, bioproducts need to perform better, or consumers need to be willing to pay more for them. Executives at biomaterial companies say many consumers will.

“Europe is the region in the world which is now, in terms of consumers, the most advanced in understanding, knowledge, and expectation of sustainability,” says Caroline Petigny, chief sustainability officer at Afyren.

Heyl, though, is not so sure. “Consumers ask but don't pay. That's my perception,” he says. “You always have wealthy people that will buy a pot of facial cream for €100; you will have small quantities of very nicely produced ingredients. But is that getting into a mass phenomenon? That's a question.”

Inflation and political change are also looming factors, and European polling is shifting right, toward parties with less concern for climate change and sustainability policies.

Because of these headwinds, Heyl argues that biomaterial producers should focus on a narrower range of products. “The closer you get to consumers, the more you could charge,” he says. He points to things like medicines for people and their animals or personal care items applied directly to a person's body. According to Heyl, consumers may be willing to pay more for such products, making them a potential area of growth for biomanufacturing.

“The more commodity products you target, the more difficult it will be,” Heyl says.

Indeed, companies in Europe have a poor track record of producing large-volume biobased chemicals. Observers point to Clariant’s cellulosic ethanol plant in Romania, which cost more than $250 million to build, and a facility by a joint venture between DSM and Roquette in Italy to produce succinic acid from biomass—both of which struggled to turn a profit and were shut down. Last year, Corbion announced it would close a lactic acid plant in Spain in favor of a facility it is building in Thailand.

And many companies that started out pursuing high-volume commodities like biofuels eventually shifted to more specialized markets. In 2008, when oil prices crashed, several biomaterial firms attempted a switch from fuels to higher-value molecules for pharmaceuticals, cosmetics, or food.

Some companies see an opportunity for biobased products somewhere between commodities and low-volume specialties. For example, Evonik Industries’ new plant in Slovakia produces more than 10,000 t per year of rhamnolipids, a new class of surfactant, by fermenting locally sourced dextrose from corn, or sucrose from sugarcane.

In Bitterfeld, Germany, Verbio plans to produce up to 60,000 t per year of specialty chemicals made from rapeseed oil methyl ester, commonly known as biodiesel, in a plant set to open in 2026. The firm will use olefin metathesis to turn the methyl ester into 1-decene and methyl 9-decenoate for applications such as lubricants, detergents, and polymers.

Ralf Duessel, head of sustainability at Evonik, argues that bioproduction can compete in complex molecules. “Bioproduction has the potential to outperform traditional chemical synthesis, especially for complex molecules such as enantioselective compounds, complex carbohydrates, and intricate peptides,” he says.

While some firms focus on complex molecules rather than commodities, not everyone believes that commodities based on renewable raw materials are unattainable.

Hendrik Waegeman is head of business operations at Bio Base Europe Pilot Plant in Belgium, which calls itself the world’s largest open-access pilot and demonstration facility for bioproduction scaling and research. Waegeman says he doesn’t believe that bioproduction is inherently unable to compete with traditional commodity chemical manufacturing.

Waegeman acknowledges that starting with specialties and growing to higher-volume products is a sound strategy, but he contends that Europe can build up bioproduction that competes in all markets because of its advantages in infrastructure, research, and technology.

Translating R&D in Europe

Europe has long had a biotechnology strategy. Over time, that work led to the Strategy on Bioeconomy, which the European Union adopted in 2012. Combined with excellent research universities, this long-term focus built a foundation of biotech research and knowledge. The challenge now is translation, Waegeman says.

“We have great universities,” he says. “We have great incubators who can help, who foster entrepreneurship.” This base, along with demonstration facilities like Bio Base Europe, can power the research and scaling required, Waegeman says.

Heyl agrees. “The biggest advantage and underutilized advantage for Europe is the amount of [intellectual property] and how that is generated,” he says. A 2021 report on European biotech by McKinsey found that Europe has a clear lead over China and the US when it comes to the quality and quantity of its biotech science. The report also cited competitiveness in the number of patents coming out of Europe.

The continent is producing a lot of knowledge, Heyl says, “but we are not good at translating it into new companies.”

For Heyl, tapping into this potential will be the role of start-ups and small and medium enterprises, known as SMEs. “Big companies are so busy at the moment reacting to all the global changes that nobody has time for stuff that is not in the core, that doesn’t have payback times of 5 to 10 years,” he says.

To unlock start-up potential, European companies need to attract more private capital, Waegeman says. “You have great programs to take those initial steps, but then when you really need the capital to scale, that's not available enough in Europe.” To attract that investment, European companies must sell themselves better.

“We're less salespeople compared to Americans,” he says. US firms, in his view, are more comfortable moving to market while optimizing the technology in parallel. European firms take a cautious, serial approach. “If I compare what we have in Europe just purely technology-wise, it's very strong, but it's not as hyped as in the US.”

While Europe doesn’t have a reputation for dynamic start-ups, it is known for stable and consistent public investment. State-funded initiatives like the Circular Bio-based Europe Joint Undertaking and the Clean Industrial Deal encourage investment and growth in this sector.

Evonik’s Duessel says government can do more. “We see a significant opportunity for the European Commission to further accelerate the bioeconomy through targeted funding initiatives,” he says. “While Europe already has a strong position in early-stage research funding, increased support in later stages of the development chain, particularly in scaling up to demonstration plants, could make a real impact."

A European approach to reindustrialization

Still, another European stereotype looms large: burdensome regulation and bureaucracy. Waegeman describes several impediments for small businesses seeking access to the millions of euros available in EU funding. They mostly stem from rigid top-down approaches.

Large sums, such as those available from Horizon Europe, the EU’s main research funding program, require a consortium, Waegeman says. “You have to build up that consortium; you have to fit a call. So it’s basically a top-down decision what the topic will be and what you will have to do.”

He says top-down thinking coupled with long application processes for EU-wide grants hurts small businesses. “There's an opportunity, but you have to wait maybe 1½ or 2 years before you can get started. As a result, the opportunity is basically lost.”

Bottom-up approaches allow smaller companies with an idea to directly compete for funding. Waegeman sees some progress here as grants from regional bodies and from the European Innovation Council get funding to businesses quicker and with fewer strings attached than EU-wide grants. But these grants are insufficient to support the larger bioeconomy.

Regulation also poses problems. “Regulation should be supportive, not a burden,” Waegeman says. Regulators who work with companies to ensure products are safe benefit the public and help companies avoid catastrophic failures.

According to Afyren’s Petigny, environmental regulators often write rules without consideration for biomaterial producers. “Although a specific standard exists, biobased products are not always well recognized and defined at the European level,” she says. “It's impossible to differentiate a biobased product from a petrobased product on labels, for example.” And many regulations are written for traditional production methods, putting bioproducers at a disadvantage.

In fact, Europe has a long history of strong regulation, says Fritz Georg von Graevenitz, CropEnergies’ CEO. “The entire continent was always very much attached to state power,” he says.

For von Graevenitz, European state power can be an advantage because it provides clear targets and funding for sustainability and climate goals, which can favor firms like his. For example, companies looking for indirect ways to reduce carbon emissions can do so by purchasing ethyl acetate from CropEnergies because, according to EU rules, customers can claim emission reductions up- or downstream of a supply line.

The problem he sees is that European regulation overly restricts how these environmental targets are met. “There's a complete mismatch between the goals we want to achieve and the path we are allowed to take,” he says, pointing to crop production caps and narrow definitions for products like green hydrogen as examples.

Like the US, Europe wants to reindustrialize, and expanding the bioeconomy is a uniquely European solution to that challenge. It addresses the continent’s commitment to sustainability, security concerns, and job creation.

“The bioeconomy is, by essence, a regional value chain,” Petigny says. “We need to be self-confident in Europe and keep the strategy of investing in our industry so we can make sure we have the important value chains in our country and not depend on others.”

European self-confidence is rising in response to global challenges, von Graevenitz says. “I'm bullish on the bioeconomy starting in Europe, but at the end of the day, also everywhere,” he says.

Securing investment, restructuring regulation, and translating world-class research are just some of the challenges when it comes to investing in the European bioeconomy, von Graevenitz says. “Yes, it’s the right time. But also, there's no time to lose.”

Bradley van Paridon is a freelance writer covering chemistry, science, and technology and is based in Belgium.