Prefer to Listen? Press Play Below
For your convenience, this blogpost is also available as an audio version. Simply click the play button to listen (Duration: 9 minutes 50 seconds)
Author: Damianos Michailidis | Project Manager at Rainno
Mitigating the negative impacts of climate change is becoming more and more crucial. Societies are indeed moving, albeit slowly, towards a bio-based economy where fossil-based resources like plastics are replaced by bio-based ones, but why is this important? Let’s say that you buy takeaway and you see that it comes in a container made from bio-materials instead of plastics. This means that it will actually melt and dissolve without needing 500 years to do so. Your next logical thought could very well be “why not just replace all plastics with bio-based ones?”.
Bio-based products require a steady supply of biomass, at reasonable costs, and with low environmental impacts in order to work. If they don’t, bio-based supply chains cannot function properly and products will probably not be broadly accepted by society1 . Achieving all three of these factors isn’t always easy, since bio-based products can have very sophisticated and complex value chains and logistics that are often invisible to consumers. To illustrate this, Figure 1 below presents a simplified value chain diagram with the several levels that create the bio-based packaging value chain from our example, starting from the raw materials (e.g. corn, sawdust, algae and many more) and ending in the final product.
The bio-based value chain explained:
Bio-based products are wholly or partly derived from materials of biological origin, such as plants, animals, enzymes, and microorganisms, including bacteria, fungi and yeast. Bio-based refers to the origin of the raw material, not just the finished product. If you want to learn a bit more about bio-based products, you can read our previous article on this subject here.
Value chains are a set of interconnected activities that lead to new products and services by adding value to raw materials. In the bio-economy, a bio-based value chain consists of 6 main stages2 :
- Biomass sourcing: Includes biomass procurement through farmers and farmers associations that produce bio-waste, and local waste management companies in charge of waste storage and treatment. Stakeholders benefit from the value chain by valorising their crop or other waste streams that are usually burned and/or disposed of in landfills, and can be harmful for the environment.
- Pre-processing: Here the biomass is transported to laboratories for the pre-treatment and processing (cleaned, crushed, fermented or refined into usable materials) in order to be able to be used as an input in the manufacturing process. This often happens close to the source, sometimes in rural bio-refineries and other small pre-treatment units.
- Conversion/Manufacturing: Here the intermediate inputs created in the previous step are transformed into usable materials or finished goods through the power of bio-chemistry, material science and various other processing technologies. During the manufacturing process companies should implement validation and quality control methods that guarantee adherence to national and international standards.
- Distribution & Logistics: Bio-materials and products are transported inside and outside regional and national borders, to wholesalers and retailers. This step consists of all the necessary logistic activities such as packaging and transportation.
- Retail & Consumption: The final product is labelled, sold, and used by consumers.
- End-of-Life (EoL): Here consumer awareness is key for maintaining the cyclical nature of bio-products. The consumer needs to be informed of the various disposal options and choose the correct one depending on the material. EoL disposing options for bio-based products include mechanical recycling, chemical recycling, biodegradation, and composting. Some specific bio-materials and disposal options might also allow for the new bio-waste to re-enter the value cycle as it can be seen in Figure 2:
So, why don’t we replace the fossil-based products with bio-based ones?
That seems obvious, right? But of course it is not that simple. Bio-products can significantly contribute towards a more sustainable and circular paradigm but they have some key limiting factors, ranging from biomass availability, to transport costs and traceability issues. The most serious ones are:
- Seasonality of biomass supply: The supply of biomass is highly dependent on agricultural cycles and forest management practices. This seasonality can impact bio-energy production, waste management and overall biomass supply chains. This can inhibit large-scale production of bio-product throughout the year and present a key bottleneck in the replacement of fossil-based materials with bio-based ones. For example, even with a very low overall share of bio-based chemicals and plastics, the EU already relies on imports of biomass, having most of its vegetable oil coming from outside EU borders.
- Transport emissions VS local sourcing: Transport emissions are a big part of the overall emissions of any value chain. Local sourcing has the potential to significantly minimise the distance of materials traveled, and thus decreasing emissions from fuel-intensive transportation methods like long-haul trucking and shipping. Of course, locally sourced doesn’t automatically mean more sustainable, since this depends on the production methods employed by local suppliers. Additionally, there is again the limitation of seasonality and availability of resources in each region.
- Fragmented markets for bio-based materials: Bio-based materials market is a relatively nascent market and thus characterised by a large degree of fragmentation. This inhibits scalability, the creation of economies of scales and the formation of highly-efficient supply chains. As the market matures, the many bio-based start-ups and value chain actors, will benefit more strongly from the EU Single Market through simplification and coordination, ensuring greater cohesion and efficiency.
- Traceability and lack of transparency in sourcing and production methods: Essentially, what this means is that we should be able to exactly identify the origin and production methods used in the manufacturing of a bio-product. This is crucial because the actual sustainability of bio-based products depends on a wide range of conditions along their life cycle, from the biomass production and industrial conversion, up to the end-of-life. These conditions can offset the potential sustainable benefits that bio-based products offer when replacing their fossil counterparts, and lead to “greenwashing”.
Making value chains smarter: How digital innovation can help?
Despite the aforementioned challenges the bio-based economy keeps growing with a steady pace. Bio-products still represent a miniscule part of most product categories compared to the fossil-based ones but new technological and digital innovations have the potential to greatly enhance their share.
For example, imagine that you are able to track a raw material from the specific farm it was grown, to the manufacturing unit it was processed, all the way up to the shelf where the product containing it was bought. New tools like IoT sensors, AI and blockchain can make this possible, offering to producers and consumers the tools to optimise their supply chains and choose the alternatives that are actually environmentally friendly.
These technologies can assist in monitoring supply disruptions in real time ensuring timely troubleshooting and smoother operations, reduce waste and inefficiencies and accurately measure and report emissions and other environmental impacts.
Why This Matters: The Broader Picture
Bio-based value chains can be very complex and are dependent on many different factors that create serious limitations and bottlenecks for growth. But, if properly planned and set up, these value chains present a special chance to move towards a more resilient, sustainable, and circular economic model. Overall, building sustainable supply chains is essential for climate goals, economic stability, and consumer trust.
In the ARGONAUT project we are currently developing an AI-powered tool that calculates the environmental and climate impact of bio-based products across their entire lifecycle to empower small and medium-sized producers to make more sustainable decisions. We also publish informative articles like this one to better inform people about bio-products and technology. If you want to be kept in the loop of what we are developing and publishing you can subscribe to our Newsletter.
You can also learn more about the project and the innovative JASON AI-powered tool that we are developing here.
Footnotes
[1] Nunes, L. J. R., Causer, T. P., and Ciolkosz, D. (2020). Biomass for Energy: A Review on Supply Chain Management Models. Renew. Sustain. Energy Rev. 120, 109658. doi:10.1016/j.rser.2019.109658
[2] Verga, Pietro & Magureanu, Natalia & Mihaiescu, Tania & Plesa, Anca & Vajda, Boglarka & Tihamer, Sebestyen & Pop, Sorin & Ghișe, Ciprian & Ghișe, Carmen & Pop, Ana. (2020). D.4.3.1 – State of the Art / Innovation Landscape Report.
[3] Lokesh, K., Ladu, L., & Summerton, L. (2018). Bridging the Gaps for a ‘Circular’ Bioeconomy: Selection Criteria, Bio-Based Value Chain and Stakeholder Mapping. Sustainability, 10(6), 1695. https://doi.org/10.3390/su10061695
FREQUENTLY ASKED QUESTIONS | What People Often Ask
- What are the main drivers for the development of bio-based value chains?
The two most important drivers are the potential for feedstock diversification (moving away from fossil resources) and the ability to introduce new functionalities in products.
Find out more about development of the development of bio-based value chains
- What is the value chain of a product?
The Value Chain is a model, originally proposed by Michael Porter, that describes the full range of activities required to bring a product or service from conception through the different phases of production, delivery to final consumers, and final disposal/recycling.
Find out more about the value chain of a product
- What are examples of bio-based products?
Bio-based products are wholly or partly derived from renewable biological resources (biomass), such as plants, algae, animals, or various types of organic waste, and are generally an alternative to petroleum-derived products. Examples include:
Find out more about the bio-based products
