The circular bioeconomy is an emerging model for more sustainable industrial development. It combines two key sustainability concepts. First, it involves using more renewable and bio-based resources for value-added products, like food, energy, chemicals and materials, by utilizing organic waste streams from forestry and agriculture, while biodegradable products are returned to the environment and thereby re-enter the nutrient cycle.
Second, it keeps those sustainable materials and products in use longer through sharing, reusing, remanufacturing and recycling – instead of throwing them away after a single use.
A third important part of a circular bioeconomy is that of cascading the use of biomass resources. The main objective of cascading is to increase resource efficiency by capturing the value embodied in materials while reducing demand for fresh primary materials. This concept can be successfully applied to cascading the use of paper, other wood products, natural fibres for textiles and many more.
Direct burning of rainforest resources, as we have seen in Brazil over the last few weeks, is the antithesis of cascading use: it destroys not only important natural habitats but is extremely inefficient and wasteful from an economic point of view.
Given its abundance and diversity in biological resources – accounting for about 20 per cent of all living species on the planet – Brazil has an extraordinary potential to be a world leader in the circular bioeconomy. This model offers a unique opportunity for Brazil’s sustainable development pathway and for the re-industrialization of the Latin American country.
A transition to a circular bioeconomy could foster a supportive innovation environment and development of new high-value products, such as biopharmaceuticals and medicines, to provide better healthcare, food supplements for improved nutritional outcomes, biochemicals, paper and pulp, cosmetics as well as other bioproducts. Brazil’s competitiveness in the bio-industries could then be strengthened by linking different industrial sectors such as food and biotechnology.
However, in order for Brazil to benefit from the rich genetic resources of the Amazon, it will need policies to preserve the rainforest’s biodiversity in order to ensure functioning ecosystems to enable utilizing the rainforest’s natural resources in a sustainable way.
Paradoxically, a large portion of Brazil’s production, particularly that originating from agribusiness activities, comes from non-native species such as cows or soybeans. But the transition to a circular bioeconomy will help reduce the economic reliance on inefficient and destructive agricultural sectors, such as livestock, large-scale plantations and other forest substitution sectors, which are in part responsible for causing the current crisis.
There are signs that the circular bioeconomy is becoming a viable economic alternative for Brazil to replace the large earnings that it receives from soy and livestock commodity exports. The economic potential of advanced bioeconomy sectors for Brazil has been estimated to be adding $160 billion to the country’s GDP over the next 20 years – with Brazilian biorefineries expected to attract investments of $400 billion.
There is also an indication that international markets are beginning to change: increasingly countries and consumers will not want to buy products that have resulted from deforestation. In the wake of the current crisis, a number of large global brands have either suspended Brazilian commodity purchases or are reviewing their value chains to mitigate future risks.
International funds are also beginning to divest from ‘Big Meat’ as the risks caused by intensive livestock production are becoming serious concerns for investors.
To achieve the potential of a circular bioeconomy strategically, Brazil needs to develop a deliberative approach, which currently is missing. There are several policy frameworks relating to the various sectors of the circular bioeconomy, including the national policy for biotechnology ‘Politica de Biotecnologia’ from 2007, which supports the comprehensive development of biosciences.
More recently, it was included as a strategic issue in the National Strategy on Science, Technology and Innovation from 2016-19 which aims to generate innovative products and services based on the country’s natural resources and ecosystem services.
Even more recently in June 2019, a congressional committee was established with the aim to streamline Brazil’s biotechology laws which could advance innovation and build an institutional framework for a circular bioeconomy as well.
A circular bioeconomy would not only include new biotechnology sectors but also develop native non-timber forest products (NTFP) such as oils, seeds or medicinal plants which would benefit forest communities and indigenous people.
NTFP have traditionally played a key role in human well-being through their contribution to livelihoods and they are experiencing increasing importance in the diversification of the formal and informal forest-based bioeconomies across the globe. Studies show that the NTFP market in the Amazon has strong economic potential but it requires investment in regional infrastructure for production, training and marketing support.
Developing the circular bioeconomy also offers opportunities to develop greener trading relationships with jurisdictions interested in leading the transition to sustainability. In this context, Europe and Brazil’s other trading partners have a role to play in closing down the markets for products that have come from deforestation which would in turn reduce Europe’s impact on forests.
There are ongoing initiatives between the EU and Brazil on the bioeconomy which have a lot of potential for further expansion. Furthermore, several sectors will also be important elements of the EU-Mercosur trade agreement that is currently being reviewed.
The EU and Brazilian government should therefore continue to work together, in the short-term, to overcome the crisis in the Amazon, and in the mid- to long-term, to advance circular bioeconomy solutions, develop mutually beneficial trade relations and, most importantly, cooperate to implement the commitments of the trade agreement to tackle deforestation.
Further cooperation should also include joint research and development programmes in order to broaden the knowledge base and improving biosafety regulations while undertaking programmes that incentivize the benefit-sharing of genetic resources and the preservation of the world’s critical ecosystems.
On the international level, closer cooperation is necessary to ensure that the transition to a circular bioeconomy in the forest sector delivers real environmental benefits of which there are robust standards and indicators to assess this. International cooperation can help to leverage investment in research and development and stimulate innovation in high value-added sectors.
However, a sustainable bioeconomy in Brazil will depend on the conservation of its biological resources and maintaining biodiversity assets of the Amazon rainforest, which are not only important for the global climate, but also to ensure a sustainable and resilient economy for Brazil.
Patrick Schröder, Senior Research Fellow, Energy, Environment and Resources.