Minister Olli Rehn: How to implement the transition to the bioeconomy – A Nordic perspective

Ministry of Economic Affairs and Employment 14.9.2016 13.18

Seminar, Global Challenge and Pohjola-Norden Helsinki, 14 September 2016

Dear participants,

It gives me a great pleasure to participate this event which gathers together experts, representatives of business community and politicians from Sweden and Finland as well as from the Nordic Council of Ministers and the European Commission.

Global challenges related to declining natural resources and climate change challenges us to develop an economy that is based on renewable natural resources – the bioeconomy.

The bioeconomy is not a new industry; it is a combination of several primary production and refining sectors and end product markets. Typical features of the bioeconomy include the sustainable use of renewable, bio-based natural resources, environmentally friendly clean technologies and efficient recycling of materials. It is justified to refer to the transition from a fossil economy to a bioeconomy as the next wave of the global economy.

Transitioning to a biobased economy means replacing fossil material with biomass. We can use what is growing in our fields and forests and also in seas, lakes and through aquaculture.

A bioeconomy will generate smarter growth, providing new opportunities to supplement traditional products with new products and services to develop our countries’ competitiveness.

The Nordic countries have the natural conditions, the industrial infrastructure and the skills for a successful transition to the bioeconomy. Beyond the inherent potential for forestry, agriculture, fisheries and aquaculture, a bioeconomy will also give rise to beneficial opportunities for other sectors and industries to reduce their dependence on fossil fuels.

Since taking office, the Finnish government has taken several initiatives to develop our respective countries as leaders within the bioeconomy, including within the framework of the EU Strategy for the Baltic Sea Region. These initiatives aim to strengthen the long-term policy ground rules that will steer us away from dependence on fossil fuels and help advance successful industries that can create sustainable jobs. In concrete terms, this involves the following.

Increasing the use of wood can help us significantly reduce the climate impact of the construction process. The production of wooden buildings requires less energy and generates fewer carbon dioxide emissions over the course of their life cycle than other buildings.

Industry is the foundation for jobs and economic growth. A majority of the new business will grow alongside the existing businesses of forest, chemical and food industries, agriculture, construction sector and energy production. Green basic industries will secure both long-term competitiveness and new jobs. This demands long-term and forward-looking industrial and energy policy.

Increasing the pace of development for new biobased products has great potential. Many new products have already been created to replace oil-based products. Some are in the initial phases, while others are ready to be scaled up. We want to assist technologically mature initiatives to take the steps needed for scaling up and commercialisation.

Collaboration of forest and agricultural sectors with other sectors provides new concepts and products. As an example, biomasses originating in forests are now being used in textile fibres, medicines, chemicals, functional foods, plastics, cosmetics, smart packaging and bio-oils. The energy and material-efficient use of biomass can be further promoted in new concepts such as biorefineries, which produce high-value products, power, heat, and liquid and solid fuels with high overall efficiency.

To mitigate climate change wood biomass should be used resource efficiently where high emission intensive non-renewable products and energy sources are substituted or where carbon can be stored. Long lasting wood products act as carbon storages, and their production should be increased.

The sustainable use of biomass for energy purposes, too, is an essential part of a versatile and resource-efficient utilisation of biomass that will help advance the bioeconomy. Bioenergy plays a vital role in achieving EU targets for renewable energy and reduced greenhouse gas emissions. Consequently, it is vital that sustainably produced bioenergy is also seen as carbon-neutral in the future and as a way to reduce the use of fossil raw materials.

It is not difficult to find critical views on bioenergy nowadays. The main critics seem to be targeted against the role of forest bioenergy in addressing climate change. In addition to the climate impacts, other reasons for concern that are expressed are for example competition of bioenergy use with material use, efficiency of bioenergy production, impacts on biodiversity and sustainability of forest management.

These critics paint a gloomy picture of forest bioenergy. It is presented as a subsidized, wasteful use of biomass resources that is harmful for the climate and environment, prevents other more valuable uses of biomass and presents an obstacle for advancing renewable energy forms that are not based on burning.

When reading these kinds of views, one can easily draw a conclusion that bioenergy is a problem. Our view is that this conclusion is not correct. We don’t claim that bioenergy is unproblematic - it has, as also other forms of energy, problems that need to be addressed. We argue, however, that current discussion focuses too much on problems related to some forms of forest bioenergy and too little on the benefits and new opportunities created by bioeconomy.

Sweden and Finland are forerunners in EU as regards the share of renewable energy. As Sweden and Finland are most forested countries in EU, it is natural that significant part of the renewable energy in both countries comes from forest bioenergy. In Finland and Sweden forest bioenergy is seen in a very different way than the gloomy picture painted above. 

The main users of primary wood in Sweden and Finland are pulp, sawmill and wood product industries. The growing stock in forests is increasing despite the increased harvesting of stemwood for forest industry. Forests are managed to produce a sustainable flow of biomass, while at the same time maintaining and increasing carbon stocks.

Forest bioenergy is produced mainly by using by-products and residues of the forest industry, such as black liquor, bark and sawdust and logging residues such as branches and tops, stumps and small-diameter trees. Wood fuels are converted to energy with high energy efficiency in CHP plants or heating plants.

Advanced biofuels have an important role to play in decarbonizing the transport sector together with other solutions.  In Finland and Sweden (what about DK, NO) the use of advanced, sustainable biofuels in transport sector is the best option to move away from the use of fossil fuels and to reduce greenhouse gas emissions.

Bioenergy use of wood resources is regarded by some bioenergy critics less valuable use than material use. One can ask why refining wood for biofuels and often also for other valuable products should have lower value than other products from chemical industry aimed at substituting fossil resources?

Ladies and gentlemen,

The forests of Europe can and must play an increasingly important role in the EU’s competitiveness and climate and energy policies. Sustainably produced and efficiently used forest biomass for heating, electricity and transport can contribute to addressing climate change by substituting fossil fuels.

Nordic countries are endowed with excellent conditions to become world-leading bioeconomies. Long-term policy ground rules will strengthen our competitiveness and create more jobs, while combating climate change in the long run. Nordic countries will pioneer the bioeconomy, leading the way and inspiring countries in the EU and around the globe.

Thank you!