Globalization Transformation (Part 1): An Opportunity for the Bioeconomy

Larry Fink, BlackRock CEO, archetype of the swashbuckling capitalism, recently announced the end of the globalization of the past three decades. Quite a coincidence, we just celebrated in April the 50th anniversary of the Meadows Report, “The Limits of Growth”.

Whether climate change happens with unknown magnitude and, sooner or later, wields out dramatic damage to our way of life, or not, it seems other forces, geopolitical or pandemic in nature, do conspire as well against us today. And these forces have unleashed unpleasant and unexpected consequences, on food and energy prices, on critical material supply, fueling an inflation we thought was a thing of the previous century. Besides the immediate misery felt by millions, this crisis is an opportunity to reflect on where uncontrolled globalization has taken us to and what our future could look like if we were to ignore all those warnings.

Whether global trade redirects toward more regional blocs, as WTO fears, whether we succeed with more energy efficiency or frugality, it is clear a sustainable future cannot just be a replica of the globalization excesses of the last decades, but using less of everything cannot be the only approach, a hard sell to most humans, nowadays. A smooth, organized, transition is needed: so, what could be the alternatives to these global supply chains that have made nearly everything cheaper since the 1980s, without causing social upheavals or even bloody revolutions?

Zealots of total electrification imagine the planet to be exclusively fueled by electricity, fully renewable, of course: forgetting, consciously or unconsciously, that we would trade OPEC and concentrated commodity trading of the second half of the 20th century for metals-cartels of the 21st century, neither necessarily more politically friendly, nor more resourceful to feed all demands. As no one wishes to relive a Cold War, total electrification looks a bad deal, in my opinion, but partial electrification could make sense, where electricity sustainability, availability, affordability, technology and end use join forces to make it a sensible, albeit partial, replacement solution. No further comment on hydrogen, following the same hype.

Besides such “holistic” solutions, what are the key differentiators if we wish to reduce globalization and also wish to maintain some of our comfortable way of life, meaning not being obliged to spend massive amounts of money, we may not have anyway, to replace fossil-based equipment like motor cars or home heating?

Supply independence has certainly been ranking high since 2020.

Quality jobs are also looked for by workers that are interested by a meaningful employment.

Preservation of the environment is topping the list of citizens’ worries in many countries.

In building resilience against climate adversity, centralized theories and global scenario building sure are important, but thinking local is the key concept, some call it on-shoring or re-shoring, to be developed along with companion concepts of sustainability, circularity (waste minimizing, repairability), productivity. All of the above point out to the sustainable bioeconomy, which could be a significant driver for nations value addition in the future. Necessarily involving private and local actors, at the heart of local development, provided they are encouraged and supported by the public powers and accepted by their neighbors. Indeed, sustainability is not only about the environment, it must also be social and economic.

In practical terms, one example? Consider the French car market: isn’t the car becoming a luxury product? When 1.5 to 2 million new vehicles are sold every year, more of them electric or hybrid as regulations get tougher, the car market is really about 6 million deals of second-hand, or more, vehicles, obviously running on liquid and, so far, mostly fossil fuels. So, you do not want to ditch your internal combustion engine vehicle for an expensive (not getting cheaper: watch for battery price) electric vehicle, coming along with range and resale value anxiety, but you still wish, nolens volens, your carbon footprint to decrease, as you may not have the luxury to live without a car. An option is to go for ethanol in a flex fuel vehicle or for HVO as full diesel replacement, produced from your local or regional agriculture and forestry. A local win-win situation, neither perfect from the greenhouse gas emissions point of view, nor cheap, although support can be provided, but still practical for quite some time, until the perfect solution is found (no travel at all?).

And just to stay in France: one recent study points out that every new ton of biomass transformed is worth 35 € in terms of new employment, such an externality can help make bio-products more competitive.

Sure, biomass will not fulfill all energy (understood in its largest sense) requirements, but it can possibly grow to one third of future needs, if sustainably developed, without compromising nutrition, the number one priority. Bioenergy and food have not been, are not, and should never be, in competition. In one figure, a respected French agronomist, Marc Dufumier, estimates 200 kg equivalent cereals are needed per year and per inhabitant to properly feed humanity, when production is at 330 today, partially used for meat and milk, but also wasted due to inadequate logistics and not properly distributed to the hungry due to affordability issues. We must never forget that food demand is stable but steadily growing, when supply is subject to much variation, from weather and climate, geopolitical situation, logistical constraints: regulation, like strategic storage, must play a role in biomass management.

Besides, agriculture and forestry are not isolated sectors, cooperation with other industries is historical and can only develop further, in the numerous domains of the bioeconomy, biofuels, biofibers, biomaterials: local ecosystems.

Bioeconomy, the new name of the industry in the 21st century and a source of added value for nations? You can bet on it, but let us not leave it only to the market forces, regulation must help biomass to supply the world with the 4Fs: Food, Feed, Fuel and Fiber.

Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and Innovation Platform (ETIP).