By Jen Vanderhoven, CEO, BBIA
By Jen Vanderhoven, CEO of the BBIA and the BioRevolution Coalition
Look at the label on a moisturiser, the tray your lunch came in, the bag of food in your dog’s bowl or the dashboard of your car. Somewhere in each of them is a chemical or material that most likely started life as oil or gas. We rarely think about it, because fossil carbon has been the default ingredient of modern manufacturing for the best part of a century.
Using plants, algae or even microorganisms, UK biotech companies are now producing many of those same building blocks from renewable carbon instead. In beauty and cleaning products, Holiferm uses fermentation to make biosurfactants that can replace petrochemical ingredients, while Clean Food Group produces an oil from yeast as an alternative to palm oil. Shellworks makes packaging from materials produced by microbes, and Futamura, produces compostable cellulose films for food packaging. Each of these businesses has a base in the UK, but government policy is making it hard for them, and others like them, to grow here.
A prize worth competing for
The UK’s bioeconomy is already Europe’s fourth-largest by value added, generating around £325 billion and supporting 6.4 million jobs. Bio-based chemicals and materials are one of its fastest-moving parts. With the right policy support, they could generate upwards of £200 billion in annual revenue for UK plc by 2050, create 4,500 new skilled jobs every year and save more than five million tonnes of CO2 annually.
Biomanufacturing tends to locate close to its feedstocks and to existing chemical and agricultural sites, so many of those jobs would be created in regions that have lost industrial employment over recent decades.
There is also a huge security case. The energy shocks of recent years exposed how much of our economy depends on fossil resources priced and supplied elsewhere. That dependence reaches well beyond heating and fuel, into the feedstocks behind the chemicals and materials British manufacturers buy every day. Domestic biological feedstocks, processed in domestic facilities, would make those supply chains far more resilient.
Other countries have seen the same opportunity. The US, China and several EU member states are putting serious money and political attention behind biomanufacturing. If the UK continues to make it slower and more expensive to build a bio-based business here, investors and founders will take those businesses wherever conditions are better.
Where the system works against innovation
Today, bio-based products can take up to 45% longer to reach market than their fossil equivalents, and cost more than twice as much to approve. For a start-up watching its runway, or a scale-up trying to persuade investors to back a first commercial plant, that difference can decide whether the company survives.
The causes are frustratingly largely structural. Regulatory, tax and procurement frameworks were built over decades around fossil-derived products. A novel bio-based ingredient often has to pass through approval processes that were never designed with it in mind, with fewer established pathways and less familiarity on the part of regulators than the incumbent it hopes to replace.
Carbon accounting then adds another layer. When a bio-based material is assessed using methodologies and assumptions developed for fossil products, the benefit of using renewable carbon can disappear from the calculation. A buyer comparing two options on paper may see little difference, or even a disadvantage, where a fair like-for-like assessment would show something quite different. Tax policy can send similar signals. Where the system rewards some forms of carbon reduction but overlooks renewable carbon, businesses hear one message in ministerial speeches and another on their balance sheets.
Responsibility for the bioeconomy is also split across several government departments. Agriculture, industry, science, energy and environment each hold a piece of the picture. For a company trying to resolve a regulatory question or plan a major investment, it is often unclear who owns the issue or who can make a decision. The combined effect is to add delay and expense at the point when a young business is least able to absorb them.
The scale-up gap
The UK is very good at research. Public funding for biotechnology research and development is significant, and our universities and research institutes rank among the best in the world. The problems tend to arise when companies try to take their technology beyond the laboratory.
The UK does have strong facilities for the early stages of scale-up. Organisations such as CPI in Teesside and IBioIC in Scotland give companies access to pilot equipment and expertise that would be too costly for a young business to build alone, but these facilities can only take a company so far. Moving from a pilot to a first commercial facility is the most capital-intensive and risky step any manufacturing business takes. Investors want proof that a process works at scale and that customers will buy the output. Customers want proof of supply and consistent performance before they switch. Each side waits for the other, and the company in the middle runs short of time and money.
When that gap stays open, promising UK companies license their technology abroad, relocate production or sell to overseas buyers. Britain keeps the original research, while the manufacturing, and the economic value that comes with it, moves abroad.
What our petition asks for
The BioRevolution Coalition brings together businesses, investors and organisations from across the bioeconomy. Through our parliamentary petition, we are calling for five practical changes.
First, a minister with clear responsibility for the bioeconomy. A single point of ownership in government would give businesses a route in, improve coordination between departments and provide the long-term direction that investors look for.
Second, a review of tax and policy frameworks to remove barriers that disadvantage bio-based products compared with fossil-derived alternatives. That includes making sure renewable carbon is recognised where policy currently rewards other approaches to decarbonisation.
Third, carbon accounting that properly recognises renewable carbon and allows consistent, like-for-like comparisons between bio-based and fossil-based materials. Buyers and policymakers should be able to compare products on how they actually perform.
Fourth, public procurement that helps create early markets. The public sector, including the NHS, buys enormous volumes of packaging, cleaning products, consumables and materials. Specifying credible bio-based options where they meet requirements would give UK companies the demand signal they need to raise capital and build capacity.
Finally, targeted support for first-of-a-kind commercial facilities. Building a pilot plant is one thing. Financing the first full-scale plant is far harder, and it is where many UK technologies stall. Co-investment, loan guarantees or other de-risking mechanisms could unlock private capital that is currently sitting on the sidelines. Celtic Renewables, which built its first commercial biorefinery at Grangemouth to turn whisky residues into bio-based chemicals, shows what UK companies can achieve once that capital is in place.
A level playing field
Bio-based products should meet the same safety and environmental requirements as any other product, and each should be judged on its actual performance and life-cycle impact. The Coalition’s proposals leave those standards in place. Bio-based, biodegradable and compostable describe different properties, and clear, accurate claims matter for the credibility of the whole sector.
At the moment, rules written for an older industrial model add delay and cost that have little to do with whether a new product is safe or sustainable. Removing those inconsistencies would allow good technologies to compete fairly on their merits.
A decision for this Parliament
For sustainability leaders, bio-based chemicals and materials offer a credible route to cutting scope 3 emissions and reducing exposure to volatile fossil markets. For the UK more broadly, a stronger bio-based manufacturing sector would bring investment into regions that need it and make the country less dependent on imported fossil resources.
The countries that build the first generation of large-scale biomanufacturing facilities are likely to set the standards others follow and attract the investment that comes with them. The UK has the scientific base and the entrepreneurial talent to be among them, provided it moves soon. That is why we are asking anyone who wants to see these industries grow in Britain to sign and share the petition, and why we are asking the Government to act on it. If it does, more of the bio-based products we use every day could be developed and manufactured in the UK.
About the author
Jen Vanderhoven is CEO at BBIA.
