Author: Roel Delahaye, Vivian Tunn
Monitoring the biobased economy from a macro-economic perspective

5. Conclusions and recommendations

5.1 Conclusions

The Material Flow Monitor (MFM) can be extended to a Bio Flow Monitor (BFM) by using dry matter and bio-based shares of products. The BFM contains data from which meso and macro level bio-based indicators can be derived. Macro-level indicators are useful to establish a baseline, but not for short term monitoring (every one to two years) as developments in the bio-based economy are likely to be so small that they cannot be distinguished from uncertainties resulting from the method used. Meso-level indicators (at product or sector level) need to be tested for plausibility before they can be used with confidence. Lastly, the methods, scope and definitions used for some of the indicators, especially cascading, warrant further exploration and validation by stakeholders before an indicator can be derived that is suitable for monitoring.

The BFM represents two sets of supply and use tables, one for abiotic products and one for biotic products. The supply table contains data om imports, domestic production for each economic activity and extraction (arable crops). The use table contains data on consumption by sectors and households, and exports. The BFM contains data for around 130 economic sectors and 400 products. Some flows, especially bio-based flows, were small and plausibility was hard to check.

Based on the BFM data, indicators related to the bio-based economy were investigated. These indicators were related to production, substitution, cascading, dependency and economy.

Bio-based production, estimated in both monetary and physical terms, accounted for around 5 percent of total production. Consulted stakeholders did not feel this relatively small share was a point for discussion. This aggregated indicator is expected to show valid developments only over a longer period of time if a transition to a bio-based economy really takes hold. In theory, the BFM can be used to monitor specific product groups that have a high potential for a bio-based transition. However, reconciliation with other research or experts is necessary to check the robustness of the data. Regular update bio-based shares, preferable specific for Dutch production processes, are needed in order to confidently monitor developments in time.

At a macro-level the substitution indicator, which is based on inputs is similar to the production indicator, which is based on outputs. The substitution indicator provides additional insight when focused on relevant industries and products in which fossil and other non-bio resources are substituted by bio-based alternatives. The data in the BFM do not provide this kind of detailed information, and therefore no substitution indicator was derived.

The cascading indictor, compiled on both a monetary and a physical basis, shows the use of biomass for ascending levels of value applications. We used the value pyramid proposed by Bos et al (2014) but, depending on your goal, other ways of estimate cascading are open for discussion. In physical terms biomass use is largest in the lowest half of the pyramid, in monetary terms most biomass use takes place in the middle section of the pyramid. At the moment the cascading indicator is not sufficiently refined to be used for monitoring. Decisions need first to be taken on the assignment of some of the products to the pyramid categories. Also some products like energy carriers and flowers are not yet accounted for.

Dependency of biomass can be monitored with the BFM. In order to do this it is important to decide whether biomass should be recorded as dry or wet matter.

The economic indicators, value added and employment, showed a similar outcome to the production indicator: the bio-based economy makes up only a small part of the total economy. For the economic indicators, the bio-economy was even smaller, around 1 percent, as non-physical service activities were also taken into account. A clear-cut decision on which sectors should be considered as part of the bio-based economy is needed to make this indicator more robust. In the stakeholder seminar, policymakers expressed a particular interest in these economic indicators at an industry level.

5.2 Recommendations

  • Develop the BFM in order to make this methodology more suitable for monitoring purposes.:
    –Decide on scope and definitions of the bio- and bio-based economy. For example: which sectors are part of the bio-based economy? How should production be assigned to cascading pyramid levels?
    – If available, detailed research data could be used to improve both data on 1) bio-based flows 2) conversion factors for dry matter and 3) bio-based content of products.
    –Replace the assumption that the share of bio-based production reflects the share of value added and/or employment by collecting data on bio-based production.
    –Add data on bio-energy production and flower/plant production.
  • The composition (e.g. fiber, nutrients) and origin (e.g. animal or plant) of biomass determines how it can be used and the role it can play in a circular economy. It would be interesting to investigate whether data on composition are available and, if so, whether they can be linked with the products used in the BFM.
  • Investigate to what extent the biomass used is sustainably produced. There might be information on some biomass products that are labelled as sustainable products; otherwise the country of origin might give an indication. For example, wood from Indonesia is more likely to be tropical hard wood than wood from Sweden.
  • In order to make a better comparison between the abiotic and the biotic economy, all products could be expressed in terms of their carbon content. Adding figures on carbon sequestration and carbon emission in nature could give a complete picture of carbon within and between the economy and the environment. These data can be used to support policy on a low-carbon economy.