For Ricardo Gent, director of the German Association of Biotechnology Industries (DIB), Germany as a place for world-leading industrial biotechnology is “at least equal to the US”.
“Germany takes second place in the world after the US regarding fermentation capacities, meaning industrial biotechnology,” says Gent and points to a number of recent projects in the country (see box).
DIB is the biotechnology arm of Frankfurt-based German chemical producers’ association VCI. It represents the political-economic interests of firms using biotechnological methods.
Biotechnology has an important role to play in Germany
However, it is hard to assess the performance of industrial biotechnology because the chemical industry does not distinguish explicitly between conventional and biotech production, and DIB does not distinguish between industrial biotechnology applications in the chemical industry and the health care sector, he says.
Germany’s industrial biotechnology network ties small and medium-sized (SMEs) and large companies together along the value-added chain.
“The network is based on business-to-business cooperation and federal funding, with a strong focus on public research and SME support,” says Gent. “Broadly diversified industrial giants but also SME biotechnology companies have been restructuring into lean, flexible and focused companies, with lines of business of larger companies operating independently to a large degree.”
Innovation and R&D are key, with the German government’s National Research Strategy BioEconomy 2030 “one of the most comprehensive and coherent of its kind worldwide”.
“The current German government regards industrial biotechnology as a key enabling technology,” he adds.
To drive innovation, Gent calls for tax-loss carry-forwards without limits on timing or amounts – important for start-up industrial biotech firms. He calls for fiscal incentives for R&D and deplores that the new “grand coalition” government between Chancellor Angela Merkel’s Christian Democrats and the Social Democrats formed after last year’s elections could not agree on fiscal incentives to promote research.
DIB says market forces should decide which bio-based chemicals and materials replace fossil-based chemicals and materials. It rejects subsidies or quotas for renewable feedstocks, and is against taxes on fossil-based feedstocks.
“Indiscriminate, politically motivated targets – such as prescribing volumes for the use of renewables as raw materials in production – do not work in a free market, because the customers of the chemical industry do not make their purchasing decisions according to political targets or quotas: they buy products of convincing quality and price,” Gent says.
Subsidies as a tool to promote renewable raw materials cannot overcome shortcomings in R&D, he adds. Instead of new subsidies for the use of renewable materials, Germany should bring about equality of competition between the various types of use of biomass by reducing support for energy and fuels, says Gent.
“If the energy market is more attractive because of related incentives and support, biorefinery concepts will be focused and tuned to energy as the main output, thus neglecting the huge potential of bio-based products and materials,” he warns.
RECENT PROJECTS/DEVELOPMENTS OUTSIDE GERMANY BY GERMAN CHEMICAL FIRMS:
Within the EU, bio-based feedstock production is heavily regulated by the Common Agricultural Policy. Supply is less predictable, and prices can be more volatile than in the oil-reliant economy where supply of crude is adequate and relatively constant, with prices generally driven by supply and demand, he says.
Another challenge is logistics. Non-food biomass has a low energy density, resulting in high logistics and transport costs. “It is possible to produce pyrolysis oils that could be transported comparatively cheaply,” he says.
The big challenge is to use scarce biomass as efficiently as possible - with the use as food and feedstuff being the priority, he says.
DIB sees the food-fuels controversy as an opportunity that, to some extent, facilitates research into non-food feedstock such as straw and waste wood, as well as residual organic matter from large volume processes of the food industry, says Gent.
“Taking into account the growing world population, the demand for raw materials for the chemical industry cannot be met at the expense of producing foodstuffs or feed,” he says.
In the mid-term, DIB expects further cooperation between chemicals and the foodstuff and feed industries where side streams can be used for biochemical products.
Longer term, the group expects integrative processing of nonfood biomass to emerge in the union of energy, biogas, biofuels, chemicals and pharmaceuticals, with industrial biotechnology “right at the centre of this development,” Gent says.
“For further development of the biomass-based chemistry, it is reasonable to create links to existing value chains via suitable interfaces,” he adds.
Thus, ethylene can be attained from ethanol by dehydration, and glycerine generated in the production of first-generation biodiesel could be the basis for products that are today made from propylene, he says.
Germany’s biofuels industry saw no major investments in recent years because of lack of political support. In biodiesel, the number of producing companies has fallen to 25 from 49.
“Germany’s role as a leader in fostering biofuels has been lost,” says Elmar Baumann, general manager of Berlin-based biofuels trade association VDB.
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“German environment minister Barbara Hendricks just recently explained that she believed that biofuels are not saving relevant greenhouse gas (GHG) emissions, and that their share in the total fuel market should not exceed 5%. Although she only just took office, we fear that she will not give us the support we need – neither on the German nor on the European level.”
Baumann calls for mandatory goals for renewable energy and GHG reduction in the transport sector for 2030 to stimulate investments in R&D, investments in new production processes, and to further expand existing plants.
He urges tighter GHG-reduction mandates for the oil industry, which would make biofuels more attractive. “The GHG-reduction potential of biofuels has been massively improved during the last years,” he adds. “What we need most is a binding, lasting legal framework with realistic goals for the use of renewable energies and especially biofuels in the transport sector.”
Baumann points to the food-fuel debate as an “outstanding” factor hindering the development of the biofuels industry in Germany.
“Although the reasons for hunger are corruption, wars, civil wars, bad weather conditions, poverty and other factors, lobby organisations like Oxfam or Friends of the Earth have used biofuels as a tool to raise money,” he says.
The NGOs are focused on Germany, knowing that if Europe’s largest economy turns its back on first-generation biofuels, the impact on EU decision-making will be inevitable, he says.
Unfortunately, politicians seem to have given in to emotional campaigns from NGOs against “the only existing alternative to fossil fuels”, Baumann adds.
Despite heavy headwinds, Germany’s biodiesel industry is the biggest in Europe and remains highly competitive. It produces about 2.6m tonnes/year of biodiesel, with 1.6m tonnes going into export last year, he notes.
BASF sees industrial biotechnology as a key technology for its future, complementing its wide-ranging expertise in chemicals.
“In white, or industrial biotechnology, BASF investigates methods and processes for efficient and resource-conserving manufacture of chemical and biochemical products,” says Carsten Sieden, BASF senior vice president, fine chemicals & biocatalysis research.
BASF uses natural synthesis to make products which cannot be produced competitively through conventional chemical methods and reactions, he says.
“White biotechnology not only offers the opportunity to develop completely new products, but also allows a number of products to be manufactured with less consumption of energy and resources,” says Sieden.