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The Environmental Footprint of the EU Bioeconomy: Sustainability in a Global Context

Jetashree

In recent years, there has been a strong policy push towards a more bio-based economy in the European Union (EU). This is because, in addition to employment generation and green growth, it has the potential to contribute towards climate goals as well as food, natural resource and energy security. Besides its important existing and future role in food, fibre and material provision, the bioeconomy is expected to play a key role in the de-fossilisation of major industries, such as energy, transport, chemicals, plastics, and construction. However, while bio-based feedstocks, materials, and products including food (for simplification hereafter referred to as bio-based products) offer significant promise, their production and consumption also come with environmental risks. Importantly, as the EU increasingly consumes bio-based products sourced from various parts of the world, the question arises: what are the environmental footprints of this growing consumption and how to ensure a sustainable bioeconomy?


Recognizing this challenge, efforts have previously been made to study certain consumption-based environmental impacts of the EU’s bioeconomy—such as greenhouse gas emissions, cropland footprints, and contributions to water scarcity. However, these studies have often been limited in scope, focusing only on specific impacts or particular member states. To address these gaps, this study estimates the production- and consumption-based greenhouse gas (GHG) emissions, water use, and land use associated with the EU’s bioeconomy. By analyzing global supply chain linkages, we examine the impacts of EU bio-based consumption on a worldwide scale. We use environmentally extended multi-regional input-output (EE-MRIO) analysis, a tool that links economic activity with environmental impacts across global supply chains. Exiobase was selected as the global MRIO database for this study owing to its comprehensive sectoral classification (including bio-based sectors), and its emphasis on EU member states. Additionally, we apply monetization factors to quantify the monetary costs of these environmental footprints (particularly GHG emissions). This approach allows us to assess the extent of losses that specific regions or economic sectors might incur if they were to internalize their environmental costs.


Our findings show that, while the production of bio-based products in the EU in 2022 accounted for 585 MtCO2eq of GHG emissions, 193 million ha of land use, and 941 billion m³ of water use, the consumption-based impacts were even higher. Specifically, consumption-related figures reached 762 MtCO2eq, 196 million ha, and 1338 billion m³. This discrepancy highlights the EU's reliance on imports to meet its demand for bio-based products.


Certain member states, such as the Netherlands, Belgium, and Ireland, impose far greater environmental impacts outside the EU than within it. Meanwhile, major producers and consumers like Germany, Spain, France, and Italy have a particularly important role to play in addressing both internal and external impacts. Given the European Union’s emphasis on fostering a sustainable bioeconomy, it becomes clear that more targeted efforts are needed to mitigate impacts that occur beyond EU borders.

 

 

At a sectoral level, primary agricultural products such as milk and cattle are found to be critical direct emitters of GHGs. From a demand perspective, the consumption of processed foods and meat products drives a large share of emissions, as these rely heavily on the major GHG emitters like milk and cattle.

 

As for land use, primary agricultural products such as grains, wheat, cattle, milk, oil seeds, and vegetables, fruits, and nuts, as well as forestry, are the largest direct users of land. Upon considering the full supply chain impacts of land use, processed foods, vegetables, fruits and nuts, wheat and dairy products emerge as the largest consumption-based drivers. A similar pattern is observed for water user use. The report also discusses specific examples at the member-state level, such as Germany’s notable role in both production and consumption-driven impacts.


Recent bio-based applications aimed at de-fossilizing other sectors—such as bio-based textiles, apparels, plastics, chemicals, rubber, furniture, electricity, and fuels like biogas, biogasoline, biodiesel, and other liquid biofuels—account for just 2% of the EU’s total production-based GHG emissions. However, their share of consumption-based emissions in EU’s total is higher, at 13%, with bio-based furniture (6%), textiles (3%), and apparel (3%) being significant contributors. These sectors, however, are not currently associated with high production- or consumption-based land and water use impacts.


To better understand the economic implications, we examined the costs associated with GHG emissions through a cost internalization exercise for the Netherlands. Costs are calculated for the production-based GHG emissions from each bio-based sector in the Netherlands (including emissions from production for meeting both domestic final demand as well as exports). These costs are then compared to sector profits. This analysis underscores the importance of addressing environmental externalities. For instance, we found that profits in the Netherlands’ Agriculture, forestry, and fishing sector would decline by 13% if it were to bear the full costs of its emissions. Even more striking, the Manufacture of food, beverages, and tobacco sector would face a 40% reduction in profits. Phased policies that mandate cost internalization could incentivize companies to develop and implement emission reduction strategies. Meanwhile, consumers may adjust their consumption patterns as internalized costs are reflected in rising prices. Looking ahead, as sectors such as furniture, textiles, chemicals, plastics, and electricity expand their bio-based shares, they too must prepare for the eventual internalization of their environmental costs.


We propose two key strategies to address the environmental impacts of EU's bio-based consumption. First, the EU could incentivize imports of sustainable bio-based feedstocks, materials, and products. This can be facilitated through bilateral partnerships with key exporting countries or through trade agreements prioritizing sustainably sourced bio-based resources. Second, it is critical to expand and strengthen the use of certification schemes and labels (CSLs) for imported biobased products, including the establishment of clear sustainability criteria for bio-based products and implementation of robust certification mechanisms. While challenges such as the costs of adoption and ensuring compliance across global supply chains remain, these pathways can serve to reinforce the EU’s leadership in advancing a sustainable global bioeconomy.


The detailed report (Harmonitor Deliverable 6.2) has been submitted to the Commission and can be downloaded here. Additionally, a scientific article is currently being prepared and a link will be available here once the article is published.

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