On October 7, the USDA released a report, Why Biobased?, written by the Duke University Center for Sustainability & Commerce and the NC State University Poole College of Management. The report takes the pulse of the growing bioeconomy. According to the USDA, “the bioeconomy is characterized by … environmentally-friendly materials and products and economic opportunities for U.S.-based agriculture, chemical, and manufacturing sectors and their value chains.” In the petroleum industry, the maxim has always been: chemicals for value, fuels for volume. Certainly, the same can be applied to the growing bioeconomy, where valuable biobased chemicals can provide significant value to bio-refiners.
The growing role of biobased chemicals to the bioeconomy were addressed in the 2014 Farm Bill. Within the Biorefinery Assistance Program, Section 9003 of the Energy Title, eligible end-products were expanded to include renewable chemicals sourced from biomass feedstocks, as well as facilities and equipment which manufacture products sourced from renewable chemicals. While biobased chemicals represent 1 percent of Farm Bill spending, the benefits of U.S. biobased products manufacturing are enormous. According to the Biotechnology Industry Organization (BIO), the renewable chemical sector was responsible for 40,000 jobs in 2011, or 3 to 4 percent of chemical sales. BIO estimates that the industry will grow to encompass 20 percent of chemical sales by 2025.
The primary federal biobased chemical labeling program is the USDA’s BioPreferred Label, which certifies products for procurement through the federal purchasing process, as well as providing a certification label for biobased consumer products. USDA has certified over 1,940 products through the program, in 97 different categories including construction, janitorial, grounds keeping, personal care, and packaging. With strong federal support, through such programs as the Renewable Fuel Standard (RFS) and the Farm Bill, the USDA estimates that up to 20 percent of petroleum-based plastic and chemicals feedstocks could be replaced with biobased ones. A 20 percent replacement would not only significantly displace carbon-intensive petroleum products -- it could create over 100,000 U.S. jobs. According to Agricultural Secretary Tom Vilsack, “the U.S. biobased economy brings together two of the most important economic engines for rural America: agriculture and manufacturing.”
USDA’s report is a precursor to a larger economic study being conducted by the BioPreferred program regarding the economics of the biobased chemical and products industries and was mandated by the 2014 Farm Bill. Why Biobased? examines the current and potential biobased market. In it, the USDA reports that:
- BIO has estimated that the U.S. bioeconomy is valued at $1.25 trillion.
- In 2015, biobased chemicals are expected to make up 10 percent of the chemical market.
- The biobased marketplace is made up primarily of starch-based plastics, industrial enzymes, and specialty chemicals such as adhesives, surfactants and solvents.
- The biobased economy could provide significant economy opportunity to rural communities. For instance, in a 98-county area in the Mississippi Delta region, a modest land investment in biomass production could create a local biobased industry worth $8 billion, and create 50,000 jobs by 2030.
- Currently, the biopharmaceutical sector is the largest area of the biobased economy. It represents 20 percent of all domestic, private-funded R&D, according to the National Science Foundation.
- While fossil-based plastics are still cheaper, it is expected that commercial-scale production of cellulosic ethanol will significantly reduce the price of enzymes used to produce biobased plastics, such as polylactic acid (PLA).
Not only will a robust biobased industry reduce our reliance on imported petroleum, it has the potential to revolutionize American manufacturing and rural economies. Consumers could enjoy a robust array of sustainably sourced products, made here in the United States, diverting wastes from landfills and supporting a diverse U.S. biobased industry. While the advancements in biobased products is exciting, policy stability is needed going forward to allow the bioeconomy – which includes food, fuels, fiber, feed for animals, fertilizers, and feedstocks for chemicals.
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