United on the bio-front

1 February 2016

Finland has recently seen the rapid emergence of a boundary-breaking bioeconomy cluster that is bringing together the forest, chemicals and energy industries. Biotechnologies also playan important role in the food and health sectors.

Finland is among the world’s top innovators in new bioeconomy products, says Petri Peltonen, Director General at the Finnish Ministry of Employment and the Economy.

“Bioeconomy, cleantech and digitalisation are all areas where global demand for new solutions will grow in the long run. Thanks to our strong expertise and sustainable domestic raw material base, our national economy can benefit from the future growth of bioeconomy,” Peltonen predicts.

Cross-fertilised portfolios

In order to improve the competitiveness of the Finnish bioeconomy, companies are encouraged to participate in innovative collaboration across industries.

Many new products are currently based on the utilisation of forest industry side streams.The role of the chemicals industry will also grow as the use of bio-based raw materials increases.

“These industries complement each other, and cross-industry collaboration will help companies increase the versatility of their portfolios. We should also adopt and accept new practices to make the most of this collaboration and the expert input provided by different industries,” Peltonen says.

With plans to invest around EUR 3.5 billion in new bioproduct plants and pulp mills within the next few years, the growth of the bioeconomy seems promising.
However, for the industry to take off, a sufficient amount of biomass must be made available for the new plants. The Finnish government aims to increase the use of wood by 15 million cubic metres per year.

“The government is preparing changes to tax legislation to increase the average size of forest estates and to speed up generational change among forest owners. Forest owners will also be encouraged to adopt a more entrepreneurial approach to forest management,” Peltonen explains.

Growth from key projects

Over the last ten years, the output of the Finnish bioeconomy has grown by more than EUR 10 billion.The government aims to accelerate this growth and create more jobs by investing a total of EUR 1.6 billion in key projects over the next three years. Projects related to bioeconomy will receive approximately EUR 300 million of this key project funding.

“The purpose of the projects is to strengthen collaboration between administration, companies, the business world and the academic community. Another aim is to remove obstacles related to legislation or permit processes that have proved to be bottlenecks in the past,” Peltonen says.

Public support to risk-takers

The general aim of public funding is to accelerate product development and commercialisation. “It is important that companies and industries have faith in the future and show their willingness to invest in research and new ideas. The government supports risk-taking that promotes economic growth, exports and the creation of new jobs.”

The Technical Research Centre of Finland (VTT) and the Finnish Funding Agency for Innovation (Tekes) have an important role in the process. The funding and loans provided by Tekes are used to carry out research that not only provides commercial opportunities but also yields innovations that benefit society at large.

“Public procurements amount to around EUR 20 to 30 billion annually. If one per cent of this sum, around EUR 200–300 million, can be earmarked for accelerating new innovations, we will be able to increase demand for new bio-based solutions.”

Peltonen believes that the key government-run projects of the future will develop the Finnish bioeconomy in a more focused way than before.

“But we must keep in mind that other countries are also taking major steps in their biosectors. In order to maintain our head start, we must safeguard our competitiveness and encourage companies to boldly experiment and develop new ideas.”

Vesa Puoskari

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