synthesis report A -based circular bioeconomy for southern Europe: visions, opportunities and challenges Reflections on the bioeconomy

Inazio Martinez de Arano (coord.) Bart Muys, Corrado Topi, Davide Pettenella, Diana Feliciano, Eric Rigolot, Francois Lefevre, Irina Prokofieva, Jalel Labidi, Jean Michel Carnus, Laura Secco, Massimo Fragiacomo, Maurizio Follesa, Mauro Masiero and Rodrigo Llano-Ponte. synthesis report A forest-based circular bioeconomy for southern Europe: visions, opportunities and challenges

Authors (in alphabetical order after the coordinator) Inazio Martinez de Arano, European Forest Institute Bart Muys, Catholic of Leuven Corrado Topi, Stockholm Environment Institute, University of York Davide Pettenella, University of Padova Diana Feliciano, University of Aberdeen Eric Rigolot, French National Institute for Agricultural Research Francois Lefevre, French National Institute for Agricultural Research Irina Prokofieva, Forest Sciences Centre of Catalonia Jalel Labidi, University of the Basque Country Jean Michel Carnus, French National Institute for Agricultural Research Laura Secco, University of Padova Massimo Fragiacomo, University of L’Aquila Maurizio Follesa, Dedalegno Mauro Masiero, University of Padova Rodrigo Llano-Ponte, University of the Basque Country

Reflections on the bioeconomy March 2018 Disclaimer: The views expressed in this publication are those of the authors and do not necessarily represent those of the European Forest Institute. Contents

Foreword ...... 5

Acknowledgements...... 7

Executive Summary...... 9

Introduction...... 13 Crossing the ...... 13 An emerging paradigm: the circular bioeconomy...... 14 What is the role of the forest-based sector in the circular bioeconomy...... 20 The forest-based circular bioeconomy in southern Europe as examined in this synthesis report ...... 21

1. Setting the scene: Drivers, enablers and barriers in southern Europe...... 22 1.1. Social and environmental challenges in the Euro-Mediterranean region...... 22 1.2. Strong bio-based sectors that can lead the bioeconomy transition...... 27 1.3. Forest and forest-based sectors in southern Europe ...... 32 1.4. Forest-based industries in southern Europe...... 36 1.5. High biological diversity: what is at stake?...... 37

2. and in southern European bioeconomy strategies ...... 41 2.1. The European Union strategy: A bioeconomy for Europe ...... 41 2.2. A bioeconomy strategy for France (2017): Putting photosynthesis at the core of the economy ...... 43 2.3. Bioeconomy in Italy (2017): A unique opportunity to reconnect economy, society and the environment ...... 45 2.4. Portugal’s green growth commitment...... 46 2.5. Spanish Strategy on Bioeconomy 2030 ...... 49 2.6. Main gaps in national bioeconomy strategies...... 50 2.7. Approaches to the bioeconomy in smart specialization strategies...... 52

3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions ...... 61 3.1. Advanced bio-products: emerging products and ...... 61 3.2 with wood: current situation and future prospects...... 67 3.3 The hidden potential of non-wood forest products...... 73

4. Unleashing the potential for the forest-based bioeconomy in southern Europe...... 79 4.1. Creating innovative bio-based products and services...... 79 4.2. The bioeconomy needs to be sustainable...... 83 4.3. Adapting to and mitigating climate change...... 90 4.4. Defragmenting forest ...... 96

5. Concluding remarks...... 103

References ...... 107 Foreword

The Basque Country, like the rest of the world, raw materials produced sustainably from our is facing paramount environmental, social territories to preserve and restore our natural and economic challenges. Increasing human capital. The concept of circular bioeconomy wellbeing, prosperity and social justice, while presented in this report can be a decisive de- ensuring the lasting protection of the planet velopment to make these transitions possible. and its natural resources is the great endeav- Furthermore, it holds the promise to reconcile our of our times, one that is challenging and economic development with environmental fascinating in equal proportions. It requires protection in a post-oil era. Forests are a key fundamental changes to our economic mod- component of our landscape and forestry el, and to current patterns in the production is deeply rooted in our culture. We are very and of and services. Like happy to have supported the European For- other regions of the world, Southern Europe est Institute in the compilation of this report, needs to find new ways to remain competitive which shows how forests can better contribute in the global economy. This shift relies heavily to the emerging bioeconomy, highlighting on our ability to make the most of the ongoing the opportunities lying ahead and the hurdles digital and biotechnological revolutions, cre- to overcome. We hope this will generate ate a new generation of industrial capacities, further social debate, increase trans-regional decarbonise the economy and decouple eco- cooperation and stimulate positive action at nomic growth, environmental degradation multiple levels. and consumption of raw materials. This, in turn, requires three important socio-econom- ic transitions: the transition towards renew- able energies and energy efficiency to tackle Bittor Oroz Izagirre climate change. The transition towards a cir- Deputy Minister for , Fisheries and Food cular economy, to reduce material intensity of the Basque Government / Chair of the board of making more with less and finally, a biologi- the Basque Institute for Agricultural Research and cal transition towards renewable, indigenous Development, NEIKER.

European Forest Institute • 5

Acknowledgements

This report and its publication has been -fi and valuable contributions. The report has nanced by the Basque Government´s De- also benefited from helpful comments and partment of Economic Development and insights from external reviewers, Christian Competitiveness. It is based on a synthesis Patermann, Yves Birot and Lauri Hetemäki; of published research papers, grey literature we wish to express our gratitude for their very and reports produced by the European Com- valuable contribution and acknowledge that mission, governmental non-governmental they are not responsible for any shortcomings and corporate organisations and reflects the or remaining errors. Finally, Inazio Martinez authors’ knowledge-based understanding de Arano also wishes to thank EFI colleagues: and views. The ideas expressed here have Carmen Rodriguez, for supporting the re- been discussed and refined in a set of the- view of Smart Specialisation Strategies; Hans matic workshops. We want to thank speakers Verkerk for helping with facts and figures on and participants in the bioeconomy dialogues forests expansion and biomass availability; held in San Sebastian 2016, Calabria 2016 and and Albert Garduño for the excellent edit- Barcelona 2017, for their open discussions ing of the final document.

European Forest Institute • 7

Executive Summary

Addressing the societal and environmental form and performance economies. But, it is challenges presented by global change requires not enough to develop a strong bio-based sec- fundamental changes to the way our society tor. It is necessary to create a biological frame- produces and consumes goods and services. work for the economy, essentially to biologise Securing prosperity for a growing , the economy, from , to dealing with resource scarcity and mitigat- and . Ecotourism, wood construction, ing climate change and environmental deg- bio-based packaging and aviation are radation will require an increased reliance all examples of how forest goods and services on nature-based solutions, renewable ener- can transform major economic sectors. gies and materials used in highly efficient and innovative closed material loops. That is what This report analyses the challenges and op- the circular bioeconomy can help to achieve. portunities to develop a forest based bioec- onomy in southern Europe. Forest can play Each city, region and country will need to a fundamental role in boosting the regional find new ways to remain competitive and will bioeconomy. They have expanded substan- need to develop a specific location-based ap- tially over the last century and have again be- proach to the bioeconomy, adapted to existing come a dominant land use. They are the largest biogeographical, economic and social spe- source of land-based biological resources, not cificities to maximise economic, social and competing with food production. They are the environmental benefits. Success will depend largest green infrastructure of the region, pro- on the ability to take advantage of the oppor- vide a large array of ecosystem services and tunities emerging from ongoing technological play a significant but undervalued, role in the revolutions (e.g. bio- and nanotechnologies, economy. The utilisation rate of these forest digitalisation) to transform (new resources is very low in most regions and this feedstocks, chemicals and materials, advanced contributes to high forest fire risks. Significant ) into circular business models synergies can be achieved through increased that leverage the potential of the sharing, plat- , including reduced wildfire-risk,

European Forest Institute • 9 provision of the bioeconomy with high-value cially. Excepting the French strategy, sustain- molecules and materials, and supply of rel- ability is taken for granted and the strategies evant regulating services (e.g. erosion control, provide little guidance on how to maximise water regulation, drought mitigation). economic, social and environmental impacts implementing principles such as hierarchy of There is already an important forest-based sec- uses, optimal fractionation and cascade use. tor in place that can play a key role in develop- Local development strategies that leverage ing a forest-based bioeconomy, if it is able to the potential of non-wood forest products overcome its fragmentation and technologi- are generally ignored. These shortcomings cal limitations that especially affect domestic should be addressed in a new generation of wood working industries, which are gener- strategies, with more ambitious implemen- ally in low-value market segments tation plans. Forests in relation to the bioec- and generally disconnected from higher added onomy are present in a significant number of value segments (e.g. wood construction) that regional smart specialisation strategies, but typically dependent on imported wood and generally with a strong focus on bioenergy or products. The region also disconnecting advanced uses of wood from has strong agro-food chains that produce regional supply chains. Nature-based tourism, large amounts of organic residues, which are short value chains and valorising ecosystem today underutilised. These are important for services have enormous potential to contrib- the bioeconomy, which cannot rely only on ute to economic development in many regions limited forest resources. Mixed feedstock bio- and are frequent priorities in Mediterranean refineries and a closer cooperation between regional smart specialisation strategies. They forestry and agriculture is needed to advance should also receive greater attention in the na- the bioeconomy agenda. tional bioeconomy strategies.

Current bioeconomy strategies of southern The production of advanced, high-value bio- European countries focus on developing bio- based products and materials, timber con- based sectors, especially agriculture, with no struction and leveraging the hidden potential clear connection to related environmental of non-wood forest products represent key op- or industrial policies. They lack a transfor- portunities to develop the forest-based bioec- mational ambition and fail to set overarch- onomy in southern Europe. There is a wealth of ing objectives in terms of climate change knowledge and relevant developments that can mitigation, material , etc. help the transition from a niche to the norm. They fail to identify the opportunities to co- Each sector faces specific hurdles that must be develop the circular economy, leveraging identified and systematically removed, so the the synergies between biotechnologies and critical question is not what can be made of digitalisation. In these strategies, forests are forest biomass, but rather what will be made, mainly seen as sources of biomass. However, on what scale, where, and what will drive it? biomass availability, mobilisation potentials While private actors must respond to market and the possible conflicts or trade-offs with conditions, it is the responsibility of govern- other ecosystem services are treated superfi- ments and societal actors to develop the frame-

10 • Executive Summary work conditions that will facilitate and guide • Coordination and integration of currently the developments in the desired directions. fragmented to secure economic, environmental and social sus- Key elements of such enabling environment tainability of forest management. In regions are: i) an engaged well informed society; ii) with limited mobilisation capacity, local bio- strong, reassuring schemes; iii) chains can provide the needed adequate research, development and inno- leverage for take-off. vation capacities; iv) improved access to fi- nance and risk-taking capacity; v) favourable regulatory evironment able to correct current Adequate research development perverse subsidies and market ; and capacities v) increased collaboration along the value chain and across sectors; vi) sustainable and • Increase the investment in research devel- well functioning supply of biomass; and vii) opment and innovation combining supply a regional approach able to create economies and demand side policies and balancing the of scale, making the best of available natural attention of social, managerial and techno- resources and reflecting people’s drives and logical . regional competitive advantages. Some of the elements that require specific and urgent at- • Focus attention on bridging the research in- tention in Southern Europe are: novation divide by supporting pilot plants and upscaling facilities, but also meeting the need for basic knowledge such as wood properties Sustainable supply of biomass of southern hardwood and softwoods. and ecosystem services • Secure skilled professionals in the interface • Acknowledge the potential trade-offs and of life sciences and forestry with synergies between the different bioeconomy and entrepreneurship, economy and social objectives and environmental sustainability sciences. and identify specific policy actions needed to enhance the synergies and minimize the trade-offs. Favourable regulatory framework, access to finance and isk-takingr • Analyse, document, monitor and inform capacity about biomass availability and potential, taking into account economic, social and • Develop specific drivers for clean technolo- environmental constraints. Monitor and ac- gies that are flexible enough to avoid techno- count for the current and potential supply of logical lock-ins through elements such as: a ecosystem services, its respective beneficiaries high enough carbon tax, setting mandatory and their value. targets for bio-based products and banning harmful non-biodegradable products.

European Forest Institute • 11 • Give special attention to funding start-up Engage society initiatives and late-stage scalable production. A portfolio of tools will be necessary from • Generate consensus on the use of forests fo- public, private , joint ventures, cusing on the promising synergies that can deferred tax policies, purchase agreements be created through a combination of man- and debt financing. agement intensities at the landscape level, in- cluding the capacity to better adapt to climate • Reduce volatility through smaller scale mul- change. ti-feedstock bio-refineries and industrial sym- biosis, building on residues and side streams • Promote informed public debate at multiple of existing forest and agro-food industries. levels, from local to global, to define a com- mon vision on desirable and feasible bioec- onomy futures. This can include, developing Increase collaboration along the value regional bioeconomy strategies, focusing on chain and across sectors the potential role of a full range of goods and services of forested landscapes, rather than • Create opportunity for forest owners to par- only on the traditional forestry sector. ticipate in downstream value chains securing adequate benefit sharing and promote long- • Keep the public informed through ade- term supply agreements. quate product standardisation and labelling schemes, including elements related to the • Create cross-sectoral bioeconomy clusters environmental and social footprints of im- and engage actors in systematic business dis- ported feedstocks. covery processes, encouraging the creation of new partnerships and industrial ecosystems. • Address the Euro-Mediterranean dimen- sion, as climate change and the of natural resources might have game-changing implications for the social and political stability of the region.

12 • Executive Summary Introduction

Crossing the planetary boundaries rent economic development model (Steffen et al. 2015). Air and water , soil deg- By 2050, the Earth’s population will reach radation, freshwater salinisation and hyper- 9.7 billion, with 66 % of the population liv- accumulation of waste are severe externalities ing urban lifestyles in cities and megacities that jeopardise human development gains and (United Nations, DESA 2015). Production of that could aggravate social inequalities. goods, trade, capital, and informa- tion flows have rapidly expanded and lead to The pace of change will accelerate over the a globalised, urban and digital economy that next two decades. Developing countries will has affected Earth’s functioning. This unprec- lead economic growth and will account for edented period of human development is still an increased share of the economy. Two bil- dependent, to a great extent, on fossil fuels, finite lion people will enter the global middle class biophysical resources, and a linear pattern of and will adopt western consumption patterns. production-consumption-disposal. As a con- To satisfy increasing demands, the world will sequence, society is facing unprecedented inter- need to produce, for example, 50 % more food, connected challenges in trying to ensure human 45 % more energy and 30 % more fresh water development and wellbeing within our planet’s (United Nations 2012), while reducing nega- boundaries (Steffenet al. 2015). Four of these tive environmental impacts. This represents boundaries might already have been crossed: an enormous challenge for society and tech- nology, and it is clear that we need a new eco- • accelerated climate change nomic paradigm to achieve these in a way that • loss of integrity of the would be also in accordance with the Paris • intense land-use change Agreement and the SDGs targets. • altered biogeochemical cycles Currently, globalisation, urbanisation and Therefore, Earth’s systems could already be technological development are changing the entering a state that cannot sustain the cur- economic landscape, and are ­destabilising

European Forest Institute • 13 many traditional economic sectors and shift- An emerging paradigm: ing the competitive balance within and across the circular bioeconomy regions. Emerging economies are increasing their share of both manufacturing and con- Recently an European Forest Institute’s (EFI) sumption. As Europe’s technological and report analysed the context in which the circu- competitive advantage narrows, it needs to lar bioeconomy strategies should be developed find new avenues to create wealth and well- in Europe (Hetemäki et al. 2017). Based on being. Countries, regions and cities need to this, we outline here some of the key features remain competitive in the global landscape, that need to be taken into account generate jobs and livelihood opportunities for all and invent new ways of approaching The circular economy paradigm seeks to use development in the rest of the world. materials and services efficiently and to pro- duce through redesigning how The current fossil-fuel based, resource inten- products are built and used, minimising their sive, linear economic model seems to have environmental footprints through sharing, re- reached its limit. The delicate balance of using, repairing, and ensuring that economic benefits and costs, including en- any unavoidable residues are biodegradable, vironmental and social externalities, seems allowing for close biogeological material cy- to have lost its equilibrium. Most, if not all, cles. The bioeconomy proposes a shift towards economic sectors must be transformed to using renewable biological materials to create address the urgent need to de-carbonise and a new generation of goods and related services de-materialise the economy, to reduce pollu- that can replace and upgrade what today is tion, water consumption and generally reduce being created by using fossil fuels and non- negative environmental impacts, while at the renewable materials. It also proposes a greater same time, increase competitiveness, equity reliance on nature-based solutions to replace and wellbeing. the built infrastructure (e.g. procuring clean water through watershed management instead Success will greatly depend on the ability to of through a depuration facility, increasing re- transform consumption and production pat- silience to floods by planning for controlled terns in order to increase energy and material flooding areas instead of using costly artificial efficiency, taking advantage of the emerging levees, embankments and post-disaster man- opportunities offered by technological and so- agement). Both the circular and bioeconomy cietal developments in such diverse field as the concepts complement each other in important bio-based economy, the circular economy, the ways. Bio-based materials often have greater digital society and the biological and nano- potential for recycling and biodegradation technological revolutions, that are the source and are better adapted to circular and of a new generation of materials, renewable closed material loops. Nature-based solutions energies, clean production systems and busi- and the circular economy can help reduced ness opportunities. total material needs, maximising the capacity of bio-based products and services to satisfy human needs. This is very important as the

14 • Introduction Figure 1. Illustration of circular bioeconomy flows, based on Hetemaki et al. 2017 bioeconomy, as frequently defined (e.g. as de- and society in a continually changing but re- fined in the European Bioeconomy Strategy), silient balance. If wisely developed, the circu- does not embrace new patterns of consump- lar bioeconomy can help reconcile economic tion and the reduction of needs. development with environmental protection.

The circular bioeconomy is a new economic In a narrow sense, the circular bioeconomy paradigm that increases reliance on renewable, can be seen as an emerging sector. It is the sum biological resources with increased resource of all activities that transform biomass into efficiency and circular material loops. It has different product streams, including materi- the potential to substitute fossil-based, non- als, chemicals, biofuels and food and animal renewable and non-biodegradable materi- feed. It includes processes and products of als with renewable, re-usable, recyclable and the traditional industries in the forest sector biodegradable products. It must be seen as ( and paper, timber, cork, etc.), the agri- a whole (Figure 2): on the one hand natural food sector along with new biorefineries1 that resources such as carbon, water, solar energy are producing a new range of products from and soils provide the needed background for and ecosystem functioning, which 1 According to the International Energy Agency, a biorefinery in turns provides goods and services for nature is a facility that combines biomass transformation processes to produce a spectrum of bio-based products (food, feed, chemicals, materials) and bioenergy (biofuels, power and/or heat). See: http:// www.ieabioenergy.com/

European Forest Institute • 15 biofuels to , fibres and based packaging, bio-textiles, nature based composites for manufacturing, energy, food tourism or advanced aviation fuels are ex- and feed. It also includes the many ecosystem amples of how the circular bioeconomy can services that provide societal well-being and transform the main economic sectors. This are necessary for well-functioning of ecosys- vision, however, faces some major challenges. tems. See for example Hetemäki et al. (2017) For example, there are limits to the amount and the European Union bioeconomy report of biomass that can be produced, and max- 2016 (Ronzon et al. 2017). imising the production and collection of the necessary biomass can conflict with other so- In a more ambitious sense, the circular bio- cial or environmental goods and services. For economy is the biologisation of the economy, this reason, the transformational bioeconomy which means a transformation of the main must fully develop circularity principles and economic sectors from construction to trans- support an array of renewable energies. For port and even to fashion, by leveraging and this reason, the transformational bioeconomy maximising the potential of emerging digital must be environmentally sustainable, fully de- bio and nanotechnologies to transform the velop circularity principles and relay also on different fractions of biomass into advanced non biobased renewable energies. biomaterials, products and services, reduc- ing non-renewable resources to a minimum (Schütte 2018). Wood construction, bio-

16 • Introduction Table 1. Economic sectors that require an urgent transition towards sustainability

Sector Relevance (in 2011) Main options

Natural capital • natural and agro-ecosystems provide the under- • secure and monitor sustainability (ecosystems pinnings of life and feed humanity • reverse critical negative externalities reducing and agro-eco- • 4 billion people work directly in agriculture, policy and market failures systems) forestry and fishery sectors • improve management and circularity for food and sourcing the bioeconomy

Energy • 80 % of final energy consumption is based on • renewables (solar, wind, marine, geothermal, fossil fuels biomass, hydro, etc.) • global energy demand growing at 1.5 % yr-1 • energy efficiency, including improved use of bio- • 60 % of based on inefficient mass universal access to electricity as a condition traditional biomass to access green energy • 2.5 % of world diseases caused by burning fuel

Manufacturing • 20 % of greenhouse emissions • increase water energy and material efficiency • 25 % of resource use • substitute non-renewable and high-energy foot- • 23 % of jobs print materials for low-footprint biomaterials • 17 % of pollution-related health problems • circular economy, eco-, bio-mimetics

Waste • 11.2 billion tonnes of solid waste generated per • circular economy (reduce, re-use, recycle, biode- year gradable) • organic decay equals 5 % of total emissions • new bio-based products from organic waste (e.g. • marine litter degradable biomaterials) • soil and water pollution • waste to energy conversions

Construction • 10 % of global GDP • revert to timber and bio-materials for sustainable • 33 % of GHG emissions construction • 33 % of all material use • passive house standards • 40 % of waste • water efficiency, collective renewable heating • 12 % of fresh water • retrofitting for improved environmen- tal performance

Transport • 50 % of liquid fuel consumption • landscape and urban planning • 25 % of energy-related GHG emissions • enhanced public transport • 80 % of atmospheric pollution in cities • digital economy (i.e. virtual meetings) • 1.3 million fatal accidents per year • sharing economy, shared transport • global Automobile fleet to grow 300 % by 2050 • renewable electric and lighter, more efficient (i.e. bio-based carbon fibre cars) • aviation advance biofuels

Tourism • 5 % of global GDP and 8 % of global jobs • green transport • 6 % of total exports, first export sector for 150 • green construction countries • nature- and heritage-based tourism • 5 % of global GHG emissions, relevant local pres- • increased resource efficiency sures on water and waste and nature

Cities • 50 % of global population, increasing rapidly • leverage high density population to increase • up to 80 % of energy consumption and GHG energy, water efficiency to reduce waste emissions • improve urban-rural links • consumption and waste generation centres • nature-based solutions for human health, risk mitigation, urban farming, etc.

Source: adapted from UNEP 2011

European Forest Institute • 17 Building blocks to realise The bioeconomy, relies heavily on biological the circular bioeconomy resources though the capacity to produce them might be insufficient to supply their already Southern Europe is the region with the larg- existing needs (Global Footprint Network est diversity in Europe also in landscapes and 2015). For this reason, reduced material in- patterns of land use. Each city, region and tensities and closed material loops are neces- country will need to develop a specific and sary to maximise positive environmental and tailored approach to the circular bioeconomy, social impacts. In this respect, the traditional adapted to existing biogeographic, economic local knowledge of ancient systems were im- and social situations. For example, they will plicitly based on bioeconomy criteria. Old have to consider the availability and types of innovations can be re-discovered, adapted, biomass, existing industrial capacities, soci- improved and spread, as is the case of agrofor- etal preferences, and they will need to find estry systems and the use of non-wood forest adequate strategies to maximise economic, products (NWFPs).Yet, to transition the local social and environmental benefits. economy to circularity is not always simple. It might even be viewed as daunting by local and regional private and public actors who are often constrained not only because they lack an adequate framework (e.g. lack of fi- nancial resources, skills and specific compe- tencies) but also because there is confusion about circularity means and confusion about the necessary steps to achieve it. To partially solve the problem, scholars from the Centre for European Policy Studies and the Stock- holm Environment Institute recently created a modular framework called Circular Economy Progress for Stakeholders (Taranic, Behrens and Topi, 2016). This framework divides the circular economy into eight building blocks. To achieve circularity, these blocks or mod- ules can be implemented by public and private actors, either independently or in any possible combination. The framework can be extended and expanded to include any new technology or approach that becomes available. Table 2 briefly summarises their characteristics.

18 • Introduction Table 2. The eight building blocks of the Circular Economy Progress for Stakeholders framework

Bio-based products Substitute synthetic, non-renewable products with biological products. This requires re- thinking product and process design to use biological feedstocks and reusing by-products from agri-food and forest industry processes. Also, it requires sustainable and efficient biomass supply chains, deployment of biotechnologies and hybridisation with nanotech- nologies and material sciences, eco-design, etc.

Industrial symbiosis This is the “physical exchanges of materials, energy, water, and by-products” between different co-located industrial facilities: the waste / by product of one facility is used as a resource by another. It requires appropriate framework conditions and intense facilitation.

Material resource efficiency Material resource efficiency is the process of reducing the amount of material resources, e.g. raw materials or intermediate products, needed to produce one unit of a product or . It can be summarised as “doing more or the same with less.”

Renewable energy and energy Renewable energy is the production of energy in its various forms from resources that efficiency are naturally renewable over the lifetime of the power plant. Energy efficiency equates to reducing the amount of energy necessary to produce the unit of product. In economies constrained by natural boundaries, they should always be used together.

Product lifecycle extension This consists of designing, producing and delivering products, services and processes with prolonged life spans, i.e. made to: • serve longer • be easily repaired • be easily upgraded • be easily serviced and maintained • be easily recombined into something new, reused and recycled at later stages of the life cycle It requires realistic future scenarios and a vision of the future. It moves the focus of the economy from production to maintenance, servicing and upgrading, and to some extent, from manufacturing to services. It favours long lifespan material uses over short lifespan material and energy uses.

Performance economy In essence, it consists in providing products as services, both for B2C and B2B. It requires changes to consumer behaviour from purchase to rent or .

Sharing economy It relays on the consumers sharing the access to goods and services, and in some instances sharing the process of obtaining and disposing of the goods and services. It may be sup- ported by online platforms, but this is not necessary. It is typically used C2C (consumer to consumer) but can be used B2B (Business to Business).

Platform economy It relays on the direct interactions between buyers and sellers on different scales. It may use online platforms, but this is not necessary. It may make the economic roles fluid, consumer and producer. It is not intrinsic to the Circular Economy as such, but it enables other building blocks (e.g. the performance economy and the sharing economy) and it can accelerate the adoption and the scaling up.

The eight building blocks of the framework could be integrated with the bioeconomy to pro- duce a novel approach to local economic development, i.e. the circular bioeconomy.

European Forest Institute • 19 What is the role of the forest-based Moreover, forests provide key ecosystem sector in the circular bioeconomy services to society, such as cultural services (recreation, ecotourism, , health), The role of forests and the forest sector is of- regulating services (clean air, erosion con- ten viewed through a very traditional lens as trol, climate mitigation), and provisioning providers of timber, pulp, paper and some services (clean drinking water, non-wood bioenergy, accounting for a small percentage forest products like mushrooms and ). of global GDP and as providing employment. At the global scale, the total value of the eco- However, new technologies, business models system services provided by forests has been and consumption patterns are creating op- estimated in the trillions of dollars, which is portunities allowing for the forest-based sec- two orders of magnitude above global GDP tor to make a much greater contribution to (UNEP 2011). Tourism already represents . The forest sector is 10 % of global GDP (2017) and, in many re- already undergoing major structural changes gions, the nature-based tourism is the most and diversification and in producing advanced dynamic segment (and forest resources are a materials that can help transform main eco- key component there). Yet, forests can only nomic sectors such as energy, construction and produce goods and services for the bioecono- manufacturing (textiles, plastics, pharmaceu- my if extreme climatic events or unsustainable tics, ,...). This knowledge-intensive management does not alter their biological portfolio of current and future products will integrity. This double-sided contribution of require specialized services (design, research forest to the bioeconomy and its feedback and development, consulting, , loops must be a relevant element when de- , etc.) that further multiply its economic signing the circular bioeconomy (Kleinschmit impact and its capacity to generate employ- et al. 2017). ment (Hetemäki et al 2014).

20 • Introduction The forest-based circular bioeconomy The report concentrates on forests and ac- in southern Europe as examined in this knowledges the relevance of agro-ecosystems synthesis report and other sources of biomass, from land and sea, as well as biological waste. It takes a broad Southern Europe has biophysical, economic look at the bioeconomy beyond the supply and cultural specificities as well as particular and transformation of biomass, to address challenges and opportunities. Describing and other opportunities linked to other types of identifying them is the main goal of this syn- goods and ecosystems services. thesis report that reviews existing scientific knowledge. Chapter 1 outlines the major en- Southern Europe is understood in this report vironmental and societal challenges, as well as the Mediterranean and Atlantic climate re- as the most relevant characteristics of forests gions of the Iberian Peninsula and Southern and the forest-based sectors. Chapter 2, anal- France (former regions of Aquitaine, Langue- yses the role of the bioeconomy in existing doc-Roussillon and Provence, Alps and Côte national bioeconomy strategies and regional d’Azur), the Italian peninsula, Greece and the smart specialisation strategies. Chapter 3 ex- Mediterranean climate areas of southeast Eu- plores the opportunities ahead in the main . It does not cover the continental cli- bioeconomy sectors. Chapter 4 examines the mate areas of South Eastern Europe and the options to overcome crosscutting hurdles in Balkans, unless when specifically mentioned. areas that require urgent attention from sci- ence and policy. Finally, chapter 5 summarises the messages and makes recommendations for action.

European Forest Institute • 21 1. Setting the scene: Drivers, enablers and barriers in southern Europe

Developing a circular forest-based bioecono- 1.1. Social and environmental my in its broad sense requires a clear under- challenges standing of the overall environmental, social and economic context and its likely evolu- Southern Europe has undergone strong pop- tions. What is the situation of the forest-based ulation growth, urbanisation and economic sector and how can it face this new context development in the last century. It is today a and adapt to it? This chapter addresses the net importer of fossil- and bio-based primary drivers, opportunities and barriers in south- resources, notably fossil energy carriers, food ern Europe that will help or limit the capacity and wood. A relatively recent scenario analysis of the forest-based sector to play an increased (World Economic Forum 2011) has identified role in the circular bioeconomy. three key long term challenges for the Euro- Mediterranean region:

a. the scarcity and fragility of natural re- sources, exacerbated by climate change and changing consumption patterns; b. structural unemployment and weak com- petitiveness, in a context of diverging demo- graphic trends (e.g. rapidly aging population in Southern Europe versus young and rapidly growing population in neighbouring Medi- terranean and Near East Countries; and c. the degree of political integration in which these issues will be addressed.

The World Economic Forum (WEF) argues that these interconnected challenges are bind-

22 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe ing together Southern Europe and the larger sources and are generating competition across Mediterranean Region in a “ of economic sectors and land uses. This creates shared destiny”, as “no country or individual significant long-term challenges related to the actor can control the final outcomes”. The water-food-energy nexus with the potential to bioeconomy, as the key element of a new de- generate social distress and political instabil- velopment paradigm, lies at the core of these ity. In this context, the bioeconomy must be challenges and must be addressed, conse- able to sustainably increase the productivity quently in its larger regional dimension, as has of biological resources, decouple economic already been recognised in the growth and material use, reduce water and for Research and Innovation in the Mediter- carbon footprints and contribute to food se- ranean Area initiative.2 curity, among other positive social and envi- ronmental impacts.

Sustainable management of scarce Despite the existing ecological constraints, natural resources the share of biomass in total domestic mate- rial use is relatively high in southern Europe The Global Footprint Network estimates that (Eurostat 2017). This is a direct consequence southern European countries have already of a generally lower material intensity3, as surpassed their biocapacity four to five times corresponds to less industrialised and more (Figure 2, Global Footprint Network 2015). service-oriented economies. This lower mate- This means that the region’s consumption of rial intensity, high relative share of biological biological resources largely surpasses their resources and a high potential for solar, wind production capacity. and geothermal energy offers great opportu- nities for a fossil-free circular bioeconomy. Water resources are especially limited and unevenly distributed in location and time. The Mediterranean region already hosts the Increased innovation capacity largest share of the world’s population liv- and employment as top priorities ing underwater stressed conditions (UNEP/ MAP-Plan Bleu 2009) and demand is increas- In comparison with other advanced econo- ing. The population in the region is estimated mies in North America and Asia, the Euro- to grow an additional 7 % in the next dec- pean Union (EU) performs relatively well ade to reach 560 million people in 2030, up in social inclusion and environmental sus- from 280 million in 1970 (CIHEAM 2015). tainability but underperforms in relation to Tourism, industry and agricultural irrigation a knowledge -based economy that can help are putting additional pressure on water re- 3 Domestic Material Consumption is in the range of 7 to 11 tonnes 2 PRIMA is set up “to develop knowledge and common innovative per capita in Italy, Spain and France, with a share of biomass in solutions for water management and provision and agro-food the range of (29 %-34 %), which compares with 16 tonnes per systems in the Mediterranean region, … to contribute to solving capita in Germany (22 %), 17 in Poland (28 %) or 21 in Austria , , nutrition and physical activity, health, (22 %) and are significantly lower than the 24 tonnes per capita wellbeing and migration problems upstream”. https://ec.europa. of Sweden (24 %) and the 33 tonnes per capita of Finland (20 %) eu/research/environment/index.cfm?pg=prima (EUROSTAT, 2016).

European Forest Institute • 23 24 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe facilitate the transition to higher value-add- Figure 2. Trends in Ecological Footprints and the Hu- ed, more productive activities (WEF 2014). man Development Index in Southern Europe and the This gap between the EU and other advanced larger Mediterranean region (Global Footprint Net- economies is especially notable in southern work 2015) and eastern Europe. Key elements explaining the divide are: lower research and develop- ment expenditures (less than 1 % of GDP in Figure 3. Average per-capita omestic Material Con- southern Europe), less capacity to translate sumption in European countries (EUROSTAT, 2017) research into marketable solutions (e.g. fewer number of patent applications) and slower im- plementation of the European Digital Agenda (European Commission 2017). Innovation capacity is an important element of what has been called bioeconomy readiness. Other rel- evant aspects are the existence of bioeconomy strategies and of bioeconomy-related clusters signalling business cooperation (Spatial Fore- sight, SWECO, ÖIR, t33, Nordregio, Berman Group, Infyde 2017).

A weaker innovation capacity, among other factors, is reflected in structurally high un- employment rates and extremely high youth unemployment rates, which are among the highest in the world reaching 24 % in France, 28 % in Portugal, 38 % in Italy, 44 % in Spain and 47 % in Greece (OECD 2016). These trends are exacerbated in rural areas, where a strong exodus has led to large areas being abandoned, creating some of the lowest popu- lated rural areas in Europe (e.g. the Iberian Lapland). Paradoxically, southern European countries have aging , a shrink- ing workforce and increased difficulty in finding citizens willing to work in certain segments of the labour market, generally

Figure 4. Regional innovation scoreboard 2017 (left) and bioeconomy readiness (right). Source: European Commission 2017, Spatial Foresight, SWECO, ÖIR, t33, Nordregio, Berman Group, Infyde 2017

European Forest Institute • 25 in the primary sector. Creating quality em- ployment, also in rural areas, is both a major challenge and one of the most relevant op- portunities for the bioeconomy in southern Europe. Youth unemployment is also high in southern Mediterranean countries (average of 23 % in 2015) where national labour markets have been unable to absorb the rapid growth among educated youth, and this is creating a lost generation. Addressing the problem of unemployment at the Mediterranean level is a key challenge that will shape the future of both Europe and Northern Africa (WEF 2011).

Climate change is a game changer for nature and people

Forecasts indicate a Mediterranean tempera- ture increase between 2° and 4°C and a de- crease in rainfall between 4 % and 30 % by 2050 (Figure 5, Jacob et al. 2014). Increased drought can have major impacts on agriculture, water and food security, affecting crop yields and soil sustainability. There is increased scientific evidence on the links between environmental Figure 5. Projected changes of total annual precipi- distresses, climate change, political instabil- tation (%) (left) and annual mean temperature (K) ity and migration in Mediterranean Africa (right) for 2071–2100 compared to 1971–2000, for and the Middle East Temperature fluctua- RCP8.5 (c, d) scenario. Source: EURO-CORDEX: tions alone have been shown to significantly new high-resolution climate change projections for affect migrant flows into Europe (Missirian European impact research, Jacob D. et al. 2013 and Schlenker 2017). The potential impacts of biophysical triggers on migration fluxes cannot be overestimated (see Ahmed 2017).

On the other hand, many studies on culti- vated or close to nature ecosystems have shown that changing climatic conditions alter ­ of animal, plant and microbial species, their phenology, physiology and their productivity. In some areas, for example, some

26 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe tree populations have already become extinct. Forest management and forest issues are not Higher temperature and water stress are be- well understood outside the small forestry hind these changes. In addition to these steady community and, in many cases, there is a trends, extreme climatic events such as heat significant gap between reality and people´s waves and long dry spells play a major role in understanding. Urban perceptions, generally reducing the resilience of ecosystems. Medi- reinforced in school systems (Pergams and terranean climate patterns are predicted to Zaradic 2008), can end up having an impor- expand, causing tree species to change across tant effect on decisions affecting the manage- Europe, with potentially severe economic im- ment of natural resources, shaping policies, pacts on forestry (Hanewinkel et al. 2013). approaches and even financial frameworks This will result in new questions regarding for the forest bioeconomy (Farcy et al. 2016). agri-food systems, forestry, European citizens, especially in southwestern strategies and land use planning (Fitzgerald Europe, value the public goods provided by and Lindner 2013). In France, for example, forests (e.g. biodiversity, protective functions) recent investigations have shown that by 2060 over the supply of raw materials and are, as the risk of forest fire could increase in Medi- a consequence, suspicious of forest manage- terranean areas and be extended to a large ment oriented to wood production (Ramet- fraction of the national territory. steiner, Eichler and Berg 2009). New ways of developing cities must be based on circular approaches to consumption and mobility, Urbanisation affects lifestyles, societal on renewable energies and on an increased perceptions and priorities reliance on bio-based solutions (e.g. in con- struction, textiles, packaging) and through an The rapid increase of urban populations and increased reliance on nature-based solutions, urban lifestyles constitutes one of the major green infrastructures and biomimicry. Such changes of our times (Seto et al. 2011). Almost social transformation must be sustained in three quarters of the EU-28’s population live shared understandings of plausible, sustain- in cities, towns and suburbs. Cities are respon- able and desirable futures, scientifically sound sible for 80 % of the energy consumption in and appealing to both rural and urban citizens the EU; buildings alone are responsible for (Costanza 2014). 42 % of total energy consumption, 50 % of all material uses, 30 % of all waste and 35 % of all carbon emissions (EUROSTAT 2016). It is 1.2. Strong bio-based sectors that difficult to see how the circular bioeconomy can lead the bioeconomy transition could succeed without contributing to more sustainable cities and without engaging urban The bio-based sectors, including food and citizens. On the other hand, urban lifestyles agro-food industries have a turnover in the and reduced access to natural and rural areas EU-28 in the order of EUR 2 trillion (JRC are generating a disconnection from nature, 2016). Southern Europe, including all of and changes in social perception on rural France, contributes 40 %. In absolute terms, activities, including agriculture and forestry. France, Italy and Spain are the main south-

European Forest Institute • 27 ern contributors with a 15 %, 13 % and 9 %, Table 3. Turn-over (left) and contribution to employ- respectively, share of the EU’s bioeconomy. ment (right) of several bioeconomy sectors in Europe Southern European countries are among the (2014). Only the three largest EU contributors are three top contributors in primary produc- listed. Based on Ronzon et al. 2017. *missing data for tion (agriculture, fishing and ), several countries manufacturing (bio-textiles, wood products and wooden furniture, paper and bio-based chemicals) and energy (bio-fuels and bio- electricity) as shown in Table 3.

Highest Turnover Most Jobs contribution Billion EUR specialised (%)

Agriculture France 68.4 Romania 27.7 %

Germany 55.0 Greece 13.0 %

Italy 45.0 Poland 11.0 %

Forestry Germany 8.8 Latvia 1.6 %

Sweden 8.4 Estonia 0.9 %

France 6.1 Lithuania 0.9 %

Fishing Spain 2.4 Greece 0.8 % and aquaculture France 2.1 Portugal 0.5 %

United Kingdom 1.7 Croatia 0.4 %

Agri-food Germany 210 Croatia 4.1 %

France 186 Bulgaria 3.3 %

United Kingdom 132 Lithuania 3.3 %

Bio-textiles Italy 50.0 Portugal 2.6 %

France 11.8 Bulgaria 1.8 %

Germany 11.0 Romania 1.4 %

28 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe Highest Turnover Most Jobs contribution Billion EUR specialised (%)

Wood products Germany 40.3 Estonia 3.7 %

Italy 27.8 Latvia 3.6 %

France 17.5 Lithuania 3.4 %

Pulp and paper Germany 39.8 Finland 0.9 %

Italy 21.9 Sweden 0.7 %

Finland 19.1 Slovenia 0.5 %

Green chemistry Germany 33.5 Denmark 0.8 %

France 20.8 Czech Republic 0.4 %

Italy 11.3 Slovenia 0.3 %

Liquid fuels Germany 8.4 Belgium 0.1 %

France 4.5 Denmark 0.1 %

Italy 2.5 Germany 0.1 %

Bio-electricity France* 2.3 Cyprus 0.3 %

Spain* 1.4 Bulgaria 0.2 %

Italy* 1.2 Romania 0.2 %

Total Germany 407 Romania 33.1 %

France 337 Greece 17.3 %

Italy 293 Lithuania 16.8 %

European Forest Institute • 29 Agriculture and the agro-food sectors domi- Clearly, there is a need to better understand, nate the bioeconomy, while forests and for- monitor and communicate biomass avail- est related value chains represent more over abilities, to facilitate business discoveries 50 % of the non-food bioeconomy of south- and investment decisions. In general terms, ern Europe (Ronzon et al. 2017). As a conse- Southern European bioeconomy will need to quence, there is higher diversity of biomass stay away from a model based in large scale bio sources with a greater relevance of agricul- refineries centred in bulk products and com- tural residues and dedicated agricultural modities. Instead it will need a greater focus crops. Nevertheless, lignocellulosic biomass on specialised, smaller scale facilities produc- and, specifically forest primary and secondary ing higher added-value bio-products. Even biomass (residues and side-streams), are the then, achieving the necessary economies of most significant sources of non-food biomass scale might require mixed feedstock conver- in southern Europe (Table 4, Figure 6). sion processes and, distributed pre-treatment facilities. This represents a significant techno- logical challenge.

Table 4. The contribution of the forests-based sector to the current bioeconomy in southern European coun- tries. Based in JRC (2016) and S2Biom project

Turnover Biomass

Billion % non- % of Total Forest Forest Forest & EUR food bio­ forest in potential biomass biomass lignocel- 2014 economy non-food 2020 % /non- lulosic food crops

Croatia 10.1 26 % 65 % 6 749 57 % 85 % 58 %

Cyprus 2.3 12 % 67 % 679 10 % 10 % 52 %

France 337.1 23 % 52 % 124 786 40 % 59 % 47 %

Greece 27.1 12 % 54 % 9 025 29 % 41 % 43 %

Italy 293.1 28 % 74 % 50 831 32 % 40 % 52 %

Malta 0.3 37 % 100 % 130 7 % 7 % 15 %

Portugal 38.6 39 % 56 % 17 592 76 % 79 % 84 %

Slovenia 6.5 47 % 69 % 6 063 89 % 90 % 90 %

Spain 191.3 22 % 53 % 67 910 24 % 32 % 55 %

Source: S2Biom project4

30 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe Portugal Spain Greece Forest production Forest residues Wood residues Black liquour Lignocellulosic crops

Italy France Turkey Grassland Other land use Agricultural residues Agrifood residues Waste

Finland Austria Germany

Figure 6. Relative availability of biomass types. Brown Source: S2Biom project4 colours represent different types of forest biomass.

The marine environment also offers great po- (, tourism, etc.). Even so, marine tential for the bioeconomy. Southern Europe bioeconomy opportunities go beyond bio- has the longest coastlines of all Europe. This mass. The coastline, the landscape, the rich creates opportunities for aquatic activities, in- cultural heritage and the climate are impor- cluding fisheries aquaculture and offsite bio- tant factors explaining why southern Europe mass production. Five of the top seven fishing are the destination for 30 % of the world’s tour- fleets of the EU are from southern countries ism. The Mediterranean, however, is one of (Spain, France, Italy, Portugal, Greece)4. In the most polluted seas on Earth, with sur- spite of this, marine biomass represents a low face plastic concentration as high as the bet- share of the total biomass (25kg per capita per ter known Pacific gyres (Cózar et al. 2015). year in Spain, the country with the biggest The potential economic and social impact has fishing fleet in the EU). As traditional fisher- not received enough attention. Reducing ma- ies decay, aquaculture and offshore biomass rine litter and marine pollution must be a key cultivation and transformation (micro-algae) policy, economic and societal driver of the appear as to be a promising opportunity. bioeconomy, and it must be at the centre of relevant regional initiatives. The opportuni- Although small in volume, fish biomass sus- ties of the marine bioeconomy are not further tains very relevant food and tertiary sectors discussed in this report.

4 http://ec.europa.eu/eurostat/statistics-explained/index. php/Fishery_statistics

European Forest Institute • 31 1.3. Forest and forest-based sectors around 1 ha in northern Portugal and west- in southern Europe. ern Spain, and up to 6 to 9 ha in the Basque Country and Aquitaine. Forest owners are Southern European forests and forest-based quite elderly, and new owners are inheriting industries are highly diverse. In order to un- their forests typically at ages between 60 and derstand the current situation and the main 65 years old. Consequently, this generational trends of forest and forest-based industries change is bringing new urban forest owners, in southern Europe, it is useful to distinguish but not necessarily younger ones. Contrary between two main forest regions. The humid to the situation in Nordic countries, forest forests of the Atlantic rim and continental owner organisations are rather new and, with piedmonts that are frequently dominated some exceptions, generally weak. Also, with by planted forest and the low management the exception of France, forest Mediterranean forests that dominate most are mainly non-existent. Moreover, in con- of central and southern Portugal, southern trast to some central European regions, the France and most of Spain, Italy, Greece and public forests do not play as active a role in the Adriatic coast of the Balkan region. wood production. The predominance of frag- mented, private and aging ownership, weak For historical reasons, the humid and tem- producer organisations, and sometimes a lack perate forests of the Atlantic rim are domi- of infrastructure in rough terrains results in nated by plantation forests with a significant major wood mobilisation difficulties. This share of exotic species. Maritime pine and also complicates information flows and the eucalyptus are the main species in this re- uptake of technological and managerial inno- gion amounting to 4 million ha of forested vation (see Martinez de Arano and Lesgour- area. Radiate pine and Scotch pine are also gues 2014 and references therein). important, mainly in northern Spain. With average growth rates typically in the range In contrast to the Atlantic region, the Medi- of 10–20 m3/ha, this relatively small region terranean climate areas of southeast and produces around 30 million cubic meters of southwest Europe are characterised by less roundwood. This includes over75 % of the productive, highly biodiverse forests, includ- Portuguese and Spanish wood production and ing a large share of non-commercial species. 42 % of the total French softwood production. In these forests the climate is dryer, the cano- Harvest intensity is typically around 50 % to pies less dense the canopies are less dense but 70 % of the total growth and is mainly based in the brush is thicker, which contributes to high plantations that provide over 95 % of all wood forest fire risk. Non-wood forest products are produced. Management intensity and wood relatively more important in forest economies. production is very low in the remaining semi- Forest industries, outside niche markets (e.g. natural forests present in the continental pied- cork, poplar or resin) are fragmented or based monts and mountain regions. The productive on imported wood resources (Nilsson 2007). commercial forest plantations are mainly pri- vately owned, as much as 90 % in Portugal and Galicia. Average ownership size is very small,

32 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe Figure 7. Average harvest intensity in southern Europe Source: Levers et al, 2014 for 2000–2010

Expanding forests, low utilisation rates other, these areas are producing untapped bio- mass resources for the bioeconomy. Currently, Over the last 70 years, southern Europe has the landscape is increasingly dominated by witnessed of one of the most impressive forest continuous, high-density, young forests with increases ever recorded. Forest cover that had high fuel loads, which present a great risk fallen well below 10 % in the first half of the for high-intensity fires, especially since the XX century is now reaching averages of 39 % climate is becoming increasingly hotter and in Italy and 50 % in Spain and in Mediterra- dryer. The very high cost of fighting fires is nean France. In Spain, forests have expanded a key element of southern forest policy, even by 4 million ha in the last 20 years. In certain though the capacity of current fire suppres- regions, the expansion of forests is even more sion systems is under question. intense. Catalonia, for example, is approach- ing the highest forest cover it has had in the The estimated spatial of the avail- last 1 000 years. In Italy forest cover doubled ability of biomass in the region is shown in in the last 50 years. This expansion is a result Figure 8 and expressed per unit of land area. of spontaneous of abandoned The estimated amount of biomass available agricultural lands and pastures. Planned af- varies strongly across southern Europe. The forestation has only occurred in some regions forest biomass potential per unit of land is mainly for timber production. Outside the generally highest in plantation dominated most productive planted areas, utilisation areas (southwest France, central Portugal) rates are fairly low (Figure 7), as wood-based and where there is a higher forest cover ratio. value chains are generally weaker (see below). The estimated biomass available from forests Rural abandonment and the expansion of for- represents the potential availability and con- ests have multiple consequences. On the one siders various technical and environmental hand, there is an opportunity to restore the constraints that could reduce availability. ecosystem and conserve biodiversity. On the

European Forest Institute • 33 Figure 8. Distribution of potential forest biomass Source: Base potential in 2020 in Dees et al, (2017) availability per hectare of land (including primary residues from forests)

Using this biomass would require a significant 2010). This represents an additional hurdle change in the way these forests are managed for wood mobilisation. and could have varying effects because of the many other benefits forests provide to soci- Forest extension and biomass potential per ety. A key issue in mobilising the potentially capita is in range with continental regions in available biomass in the region will also be Europe but is far below the boreal regions whether private and public forest owners can (Table 5). The Nordic bioeconomy is based be motivated to bring their wood to the mar- on an average of 9 m3ha-1yr-1 (average harvest ket. Survey results suggest that private forest in 1990–2000) and 4 ha of forest per capita, owners in Portugal might not contribute large while in southern Europe those values are amounts of stem wood for energy purposes below 0.5 m3ha-1yr-1 and 0.5 ha of forest per (Blennow et al. 2014), but it is unclear whether capita. In relative terms, in the Mediterra- private owners would be willing to supply it nean region there are more forests but less for material uses. The survey results contrast mobilised biomass (always per capita) when with findings from the southeastern European compared to the Atlantic region (or even to countries, showing a relatively high degree central European regions). The transforma- of willingness on the part of forest owners tional capacity of a forest-based bioeconomy to manage their forests with the intention of will depend on its capacity to maximise en- producing woody biomass for energy purpos- vironmental and social benefits per unit of es (Stejpan et al. 2015). Southern European biomass processed and per hectare of forest citizens are among those who are most clearly managed, while also including the value of in favour of managing forests mainly for con- the ecosystem services that are now market serving biodiversity and for protective func- externalities into the economy. tions and are less interested in forests being used for commercial wood supply (ECORSYS

34 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe Table 5. Availability of Forest Resources in different biogeographical regions. Values represent the average of NUT2 Regions

Forest Harvest Increment ha inhab-1 Std. m3 inhab-1 yr-1 Std. m3ha-1yr-1 Std.

Atlantic 0.11a 0.22 0.35a 0.74 5.16a 0.69

Boreal 4.17b 5.06 9.04b 8.08 3.06b 0.56

Continental 0.29c 0.2 1.08c 1.00 4.14c 0.61

Mediterranean 0.43d 0.44 0.42ad 0.65 3.73cd 0.78

Source: Verkerk et al. and S2BIOM project

Box 1. Why is forest biomass • The capacity to supply biomass can be greatly not just another feedstock? affected by climate change, with especially nega- Why must the supply be addressed tive consequences in southern Europe. Adaptation in its full complexity? requires action at multiple levels High fragmen- tation of forest ownerships is a major hurdle for In contrast to other raw materials, biomass pro- climate change adaptation and the sustainable duction is intimately related to the landscape, its supply of biomass and all other ecosystem services. people and nature. This obvious statement has multiple consequences: In addition, biomass is a relatively bulky material with high water content and low energy density, • Production practices must maintain or restore which can have many alternative uses. the natural capital (soil, water, biodiversity). There are multiple examples of negative impacts. Inten- • Costs of production and harvest are gener- sification is not always the right answer. ally high in Europe due to high environmental standards and high labour and other operating • In any given region, supply depends on thou- costs. This complicates cost-competitiveness, both sands of individual farmers, forest owners and compared to fossil alternatives and to equivalent land managers. Changes in the supply chains must products from elsewhere in the world. deal with the ideas, wills and perceptions of multi- ple stakeholders and with property structures that • The cost of transport is high over long distances, have strong regional variations. Consequently, requiring localised processing or pre-processing there will never be a one size fits all approach to facilities for cost-effective production. In moun- improving biomass supply. tain areas, predominant in southern Europe, limit-

European Forest Institute • 35 ed accessibility and lack of transport infrastructure • Cost and availability issues can be exacerbated is an additional limitation. by resource competition among different potential uses of biomass. High demand or subsidies in one • A high diversity in biomass types, typical of market (e.g. energy) can lead to price increases southern Europe, possesses additional technologi- for other uses. cal challenges and increased costs. Niche differ- entiation and higher added-value products need • However, in areas with weak forest industries, as to replace economies of scale. in the Mediterranean, the availability of cost-effec- tive side streams is limited. Local bioenergy value • Since mobilising biomass is difficult, making the chains can be the lower hanging fruit that can help best of by-products (e.g. sawdust, bark or lignin activate forestry. The carbon balance of bioenergy rich liquors) offers a clear opportunity to develop will greatly depend on the characteristics of the the bioeconomy while also helping to improve the supply chains and the conversion technologies. profitability of existing industries. The limited size of many industrial plants, especially in the sawmilling sector, could require innovative ap- proaches to secure, or compensate for the lack of economies of scale.

1.4. Forest-based industries markets in construction (e.g. structural and in southern Europe specialty panels), furniture or wood based chemistry. The situation of the sawmilling sec- In Portugal the forest industry represents tor is somehow different. There are significant 2.1 % of the country’s GDP, 8 % of the indus- capacities in wood-working industries, wood trial GDP, and 10 % of total exports. The con- architecture, furniture and wood design. Italy tribution to the national economy is much is Europe’s first and world’s third furniture ex- lower in other Mediterranean countries where porter and is also Europe’s 4th largest market is generally around or below 1% of the GDP. for wood construction. However, in general terms, high added-value engineered wood in- With few exceptions, southern Europe’s for- dustries relay on imported wood. With some estry faces high harvest and costs, notable exceptions the sawmilling sector is highly heterogeneous and dispersed supply still comprised of small companies produc- and a large array of different regulations and ing low added-value products for commodity market arrangements. Southern Europe hosts markets. Competitive position is weak. Coun- world class capacities and global players in ter intuitively for an industrialised country, the wood panels industry (e.g. Arauco Sonae, France, for example, exports roundwood and Garnica plywood, Fantoni group, Gruppo is a net importer of elaborated products. The Mauro Saviola…). Leading companies are lack of more sophisticated and profitable solid present or actively entering high added value wood value chains puts downward pressures

36 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe on the price of the raw material, as cost reduc- veloped in France, where it only meets 6 % of tion is the key strategy to stay in commod- the demand). Also, a weak solid wood sector ity markets. This in turns jeopardises wood means less forest residues, limiting bioenergy mobilisation capacities and the long term uses because of the low profitability of pure engagement of forest owners. energy value chains.

Pulp capacities in Atlantic areas are quite sig- In summary, despite industrial and tech- nificant, hosting some global players such as nological capacities, high-end/high added- Spanish ENCE, Portuguese Navigator and value solid and engineered wood products global companies like Smurfit Kappa. Prof- rely mainly on imported wood, while local itability is tight, and industries are focused resources are linked to lower value commod- on costs contention. While Eucalyptus pulp ity value chains. While pulp& paper and panel will retain competitive advantages and will segments are dominated by large global play- benefit from strong demands in the tissue seg- ers, the segment is occupied by tra- ments, there are less competitive advantages ditional small and medium-size enterprises. for softwood pulp, but it benefits from strong Sustained efforts will be needed to support demands in the packaging sector due to the the transition of local sawmilling industries expansion of e-commerce. In general, pulp towards higher added-value, longer lifespan mills have entered the bioenergy markets, engineered wood products and timber con- but there have not been significant develop- struction. ments towards the biorefinery concept, with some exceptions like Tembec’s pulp mill in Aquitaine. 1.5. High biological diversity: what is at stake? In Mediterranean areas wood value chains remain week and dominated by energy uses. The Mediterranean Basin is a biodiversity Bioenergy. This consumption is less visible hotspot with exceptionally high plant end- and badly recorded in official statistics. Avail- emism, and one of the lowest percentages able data shows that residential consumption of natural vegetation remaining in pristine of fuelwood and pellets is high in Italy, as high condition (no more than 5 %) in the world. as some 20 to 22 million tons per year. It is The Natura 2000 network is well developed in growing remarkably Spain and is expected to southern Europe,5 especially in the Mediter- increase significantly in the Balcans region. ranean climate regions covering above 30 % In general terms, however, the development of the lands in Croatia and Slovenia, over of the bioenergy sector is facing significant 25 % in Cyprus, Greece and Spain and is also barriers. These are partially related the char- above the EU28 average (18 %) in Portugal acteristics of the energy demand and the and Italy. Only France and Malta, with some structure of the energy sector, which is much 13 % of land under Natura 2000, are below the less reliant on district heating and associated average in values similar to central European combined heat and power (CHP) production 5 http://ec.europa.eu/environment/nature/natura2000/barometer/ (for example district heating is not well de- index_en.htm

European Forest Institute • 37 and Nordic countries, that are typically be- adapt to climate change. The Atlantic region tween 12 % and 15 %. Yet, land area on strict will require innovative plantation forestry ap- natural reserves is limited to around 4 % and proaches based on a mix of species at the stand erosion of biodiversity continues with threats and landscape levels. This is extremely impor- from climate change, catastrophic fires, new tant as biodiversity is not only an assemblage pest and diseases and land use changes. In of elements (from gene to ecosystems), it also the Atlantic regions, forestry is mainly based has a functional role in sustaining complex on monoculture plantations of native or in- processes and interactions within the ecosys- troduced species. In recent decades, these tem, which in turn supplies a broad range of man-made forests have been observed to be goods and services to society. A number of fragile in relation to abiotic or biotic phenom- studies have shown that biodiversity is linked ena such as windstorms (Aquitaine, 1999 and to the capacity of ecosystems to adapt to evolv- 2009), fire (Portugal, Spain), pest and disease ing environmental conditions (van der Plas (Portugal, France). As conservation areas et al. 2017) . When measured, the economic prove insufficient, a dynamic conservation value of non-marketed ecosystem services has approach is required urgently. It should be been shown to be much higher than the value based on active management to sustain the of marketed biomass (see Box 1). But there natural processes responsible for maintaining is, nevertheless, the need for more tangible biodiversity (natural disturbance, gene flows, valuation methods that are scientifically and regeneration) and increase the capacity to politically acceptable.

Box 2. The values of Mediterranean forest products and remaining to forests (grazing) and other ecosystem services. (see Fig. 9). More recently, Masiero et al. (2016) Non-wood forest products (NWFP) such as, have estimated the value of NWFPs in south cork, fodder, mushrooms, fruits, medicinal west Europe at EUR 16.5 per hectare of for- and aromatic plants, together with services ests. In Spain and Italy, they represent over like soil protection, watershed management, 20% of the value of timber. These are probably water quality, biodiversity enhancement and underestimations, due to lack of reliable and climate change mitigation or micro-climate consistent data. Acorns and nuts, cork, animal amelioration contribute significantly to the products, mushrooms and truffles and honey local or national economies of the Mediter- are the main NWFPs, although with great re- ranean region. Merlo and Croitoru (2005) gional differences. Non Wood Forest products presented an average total economic value of can contribute to a more significant and stable Mediterranean forests of about EUR 133 per flows of incomes, increasing the capacity to hectare of forests (in 2001 prices), or almost sustainable manage and protect forests secur- EUR 50 per capita per year. On average, only ing in addition a fundamental set of public around 35 % of this value can be attributed non-market services and social values to both to wood forest products, 9% to non-wood local people and the whole community.

38 • Chapter 1. Setting the scene: Drivers, enablers and barriers in southern Europe Fig. 9. Composition of the total economic value of Mediterranean forests NWFP: non-wood forest products WFP: wood forest products; Non-use: bequest and existence value Non-use Carbon sequ. 13% 5%

WFP Watershed 35% 11%

Hunting Recreation 1% 16% Grazing NWFP 10% 9%

Source: Merlo and Croitoru (2005)

Key messages

• The European Mediterranean region is fac- • Contrary to popular belief, forests in south- ing major challenges related to the scarcity ern Europe have been rapidly expanding in and fragility of natural resources, notably wa- the last century and are still expanding today, ter, exacerbated by climate change but also even if at a slower rate. Forests are also gain- by structurally high unemployment rates in ing biomass, as management intensities are a context of diverging demographic trends generally very low. Except for some Atlantic (e.g. rapid growth in southern countries, rap- areas, wood extraction is typically below 50 % id aging in northern countries. The circular the biological growth. This has many positive bioeconomy, as a new economic paradigm consequences such as increased carbon se- must help address those challenges, placing questration, soil restoration and habitat that is renewable natural capital at the core of eco- available for forest specialists. However, high nomic activities and finding new sources for biomass and forest continuity leads to more prosperity and wellbeing. megafires. It can also reduce the availability of open habitats and reduce water yields because of increased evapotranspiration. A dynamic conservation approach is urgently required. It should be based on combining management intensities at the landscape level. The bioec- onomy can provide the required economic engine.

European Forest Institute • 39 • Southern Europe has a diversified typology • The existing forest-based industries are an of non-food biomass, with greater relevance of important instrument in moving towards dedicated agricultural crops, agricultural resi- the bioeconomy. While the pulp, paper and dues and food waste. One possible implication panel sectors, relevant in Atlantic regions, are is a greater need for mixed feedstock biomass dominated by transnational, global players, conversion processes and bio-refineries, dis- the sawmill product segment consists of small, tributed pre-treatment facilities and/or a focus rather traditional, small and medium-size en- on low-volume high-value specialties. There terprises locked in low-value . is a clear need to better understand, monitor The existing capacities are far from negligi- and communicate the availability of biomass ble (furniture, timber construction), but the in order to help businesses to know about it business generally relies on imported wood. and to make their investment decisions. Sustained efforts will be needed to support the transition towards higher added value, • Non-wood forest products such as cork resin longer lifespan engineered wood products and nuts are also a relevant resource that re- and timber construction. quires specific and well-tailored approaches. In general terms, the relevance and potential contribution of non-wood forest products and ecosystem services must be better understood and better reflected in economic and policy decision making.

40 • Chapter 2. Forests and forestry in southern European bioeconomy strategies 2. Forests and forestry in southern European bioeconomy strategies

The EU and 15 member countries have devel- and biomass transformation especially in the oped bioeconomy strategies (See Hetemäki et health, energy and food sectors. The Seventh al. 2017). Although not among the front run- Framework Programme (2007–2013) devoted ners, some Southern countries have developed EUR 1.7 billion to a programme called Knowl- their own strategy, as is the case for Spain, edge Based Bioeconomy that included bio- Italy and France. These national strategies are technologies along with agricultural, fisheries analysed in this section, along with Portugal’s and forest research. In parallel, it launched in green growth commitment, which has a strong 2007 the Lead Market Initiative to stimulat3 bioeconomy component. Virtually all coun- six promising and sustainable sectors (in- tries and regions have sectorial bioeconomy cluding renewable energies, biomaterials and related policies or strategies or, for example, sustainable construction) leveraging public renewable energy action plans. Those are not procurement and other demand side meas- analysed here as they fail to provide a coherent ures to foster innovation and market uptake. and holistic vision of the potential and chal- At the same time, the European Commission lenges of the bioeconomy. launched the Climate and Energy package with the goal of reducing carbon emissions by 20 % for 2020, and which included mandatory - 2.1 The European Union strategy: gets for increased efficiency and a 20 % share A bioeconomy for Europe of renewable energy (later increased to 27 % of emission reduction and 27 % of renewable In the EU, the concept of a knowledge-based energies by 2030). In this context, and as a re- bioeconomy was first officially introduced in action to the economic downturn, the Euro- 2005 with an emphasis on biotechnologies pean Commission launched the 2020 strategy and sustainability, for transforming life sci- for smart, sustainable, inclusive growth with ences knowledge into new, sustainable, eco- a clear focus on economic development, com- efficient and competitive products. In 2007, petitiveness and jobs. It included a flagship the EU adopted the declaration: En route to initiative to help decouple economic growth the bio-based economy, putting the focus on from the use of resources, by decarbonising biotechnologies for increased crop production the economy, increasing the use of renewable

European Forest Institute • 41 sources, modernising the transport sector and main focus is on sourcing and producing bio- promoting energy efficiency. This was followed mass instead of on the industrial biotechnolo- two years later by the EU’s bioeconomy strategy gies and pharma that have dominated recent called Innovating for Sustainable Growth: A Bi- Organisation for Economic Co-operation and oeconomy for Europe (European Commission Development bioeconomy strategies, setting a 2012) with the objective of encouraging policy trend followed in most EU national strategies coherence, innovation and social acceptance. (McCormick and Kautto 2013). Interestingly, the EU bioeconomy strategy’s

Box 3. The EU Bioeconomy strategy Priority lines for action: in a nutshell • Investment in knowledge, innovation and skills; Definition:The bioeconomy is an economy that expanding support for knowledge networks, ad- uses biological resources from the land and sea, as visory and business support services; increasing well as waste, as inputs for food and feed, industry the share of multi-disciplinary and cross-secto- and energy production. It also covers the use of ral research, facilitating the development of new bio-based processes for sustainable industries. bioeconomy curricula and vocational training schemes; increasing coordination of national re- Main focus: The bioeconomy aims to create policy search agendas; and partnering with the private coherence across research and innovation, agri- sector notably through EIPs and bio-clusters cultural and rural development, environmental, industrial, energy and other policies. • Participative governance and informed dialogue with society; creating a bioeconomy panel to en- Drivers: Emission reduction, better resource ef- hance synergies and coherence between policies; ficiency and an increased competitiveness are encourage similar panels at Member States and expected to be reconciled with food security and at regional levels; create a bioeconomy observa- the sustainable use of renewable resources for in- tory to assess progress and promote adoption of dustrial and environmental purposes. national and regional strategies

Goals: 1) Ensuring food security; 2) Managing • Enhance markets and competitiveness in the bi- natural resources sustainably; 3) Reducing de- oeconomy, communicate the benefits of bio-based pendence on non-renewable resources; 4) Miti- products and support the expansion of markets gating and adapting to climate change; and 5) through standards and standardised methodolo- Creating jobs and maintaining European com- gies for sustainability assessment petitiveness. Gaps: Several key areas of the bioeconomy are not Priority sectors: The bioeconomy works in ag- dealt with or assumed to be dealt with in other riculture, forestry, fisheries, food and pulp and policies. This is the case for resource competition, paper production, as well as parts of chemical, resource efficiency and, in general, sustainability biotechnological and energy industries. and social issues.

42 • Chapter 2. Forests and forestry in southern European bioeconomy strategies 2.2 A bioeconomy strategy for The strategy aims to leverage existing bio- France (2017): Putting photosyn- based industrial capacities and research ex- thesis at the core of the economy cellence to provide “innovative, effective and affordable solutions able to meet the diver- The Ministry of Agriculture and Forestry has sity of human needs.” Main challenges are prepared a bioeconomy strategy (Republic of related to creating markets for bio-products, France 2016) based on a public debate. It in- supporting the industrial transition in key cludes a parliamentary report entitled: From sectors, up-scaling pilot and lab scale solu- biomass to bioeconomy: A Strategy for France6. tions, achieving a smooth supply of biomass, The strategy builds upon previous work, as The ensuring sustainability all along the value new industrial France (2015) and the National chain, promoting social acceptance through Strategy for Ecological Transition Towards informed dialogue and stimulating techno- Sustainable Development (2015–2020) fo- logical, social and environmental innovation. cuses on the bio-based sector. It is intended to The strategy acknowledges the need to adapt make sectorial policies related to agriculture, to regional differences, but does not further forestry and urban waste, among others, more explain. Synergies with nanotechnologies and coherent. The bioeconomy is understood as the information and communication technolo- photosynthesis economy, and, more generally, gies (ICTs) are not identified. as the living . It encompasses all biomass production and processing activities, whether in forestry, farming or aquaculture, Sustainability and social issues directed at the production of food, feed, bio- based products and renewable energy. In contrast with other strategies, the French strategy does not assume that the bioecono- my is necessarily sustainable, nor universally Drivers and focus, including relation to acceptable. Specifically, it identifies several other technology trends threats, and presents strategic approaches to overcome them (Table 6). Key drivers identified in the French strategy are: While the circular economy and resource efficiency principles are described (and set • the need to implement the Climate Agree- to be further developed in the forthcoming ment reached at COP 21; National Strategy for the Mobilisation of Bio- • the surge in demand for protein because of mass) the connections to the digital economy population growth and changes in consumer are weak and are mainly focused on new tech- habits; and nologies for resource assessment and preci- • the opportunity to gain efficiently, creating sion farming. more value from the available bio-resources, including current side products.

6 http://www.senat.fr/rap/r15-380/r15-380.html

European Forest Institute • 43 Table 6. Challenges and approaches for sustainability according to the French strategy

Challenges Strategic approach

Degradation of natural capital • Ecosystem services are a key element

Unsustainable primary production • Sustainable practices, soil as an ecosystem • Avoid soil losses to urbanisation and infrastructures

Increase demand of biomass • Sustainable intensification also by intercropping, organic agriculture and confined production (i.e. micro-algae) • Better mobilisation of existing resources • Better foresight and modelling • Increased efficiency and reduced material use

Secure positive environmental and eco- • Hierarchy of biomass uses, develop life cycle analysis nomic impacts • Fractionation, for optimal use of biomass • Cascade use and circular economy

Social integration • Promote change in consumption patterns • Address legitimate reluctance • Public debate at multiple scales • Information and pedagogy

Innovation, research, training bioeconomy developments offer new oppor- and education tunities for the wood-based industry. It places the focus on the sustainable supply of biomass, The French strategy recognises that innovation also reflecting on the needs of non-traditional processes in the bioeconomy are complex as sectors (such as chemistry). There are no clear they occur at the interface of natural processes, orientations in relation to forest industries. technology and social systems, with multiple Energy, including biofuels, is highlighted and and diverse actors involved along divergent there are references to intermediate and spe- value chains. The strategy suggests depart- cialty molecules. Notably, there is no strategic ing from current orientation on forest bio-refineries or engi- practices and giving more relevance to trans- neered wood, although it states that material disciplinary and socio-economic research uses of wood should be prioritised over en- in living labs. It also advocates for increased ergy uses. It advocates for increasing trans- links between research, vocational training parency on resource availability, but it does and education, focusing on the regional scale not suggest how resource efficiency principles as proximity is a key success factor. (e.g. hierarchy, fractionation and cascading) could be implemented. The role of ecosystem services in regional development is acknowl- The role of forests edged (e.g. through green tourism) and states that ecosystem services must not be left out of The forest sector is recognised as one of the socioeconomic models, even if how to include pillars of the French bioeconomy and such them is yet unclear. These issues should be

44 • Chapter 2. Forests and forestry in southern European bioeconomy strategies addressed in an action plan to implement this agriculture, food and water security; ii) social strategy that is still to be developed. and economic stress creating instability; and iii) strong migration from rural to urban areas and from other countries into Europe. 2.3 Bioeconomy in Italy (2017): A unique opportunity to reconnect economy, society Sustainability and social issues and the environment Sustainability is, in general terms, taken for The Italian bioeconomy strategy, (Republic granted, although some challenges in relation of Italy 2016) was led by the president of the to loss of soil organic matter and increased council on ministries and co-coordinated hydric stresses are identified. Resource com- by the ministry of economic development. petition, resource efficiency, carbon and The text was prepared by an inter-ministerial water balances of bioeconomy value chains working group with the participation of the are examples of important issues not clearly committee of regions and the clusters for agri- addressed. The need for life cycle analysis food, green chemistry and blue growth. Public (LCA) and voluntary certification schemes consultation was limited and had little influ- are mentioned as relevant tools to gain so- ence in the final text. cial support. Using marginal land is seen as a main approach to increase the biomass supply. The bioeconomy, through valorisation of side Drivers and focus including streams, is seen as an opportunity to reverse relationships with social trends land abandonment and to help attract new actors to rural areas. Interestingly, the oppor- The bioeconomy comprises those parts of tunities derived from expanding forests are the economy that use renewable, biological not evaluated. Green chemistry, next genera- resources from land and sea – such as crops, tion plastics and agricultural biorefineries re- forests, fish, animals and micro-organisms – ceive most of the attention. Although Italy is a to produce food, materials and energy. These global leader in green chemistry, this sector is are the agri-food, forestry and marine sectors, currently 30 times smaller than the combined along with the industries that depend on them. furniture and pulp and paper sub-sectors. The main driver for the strategy is to leverage existing capacities in those sectors to reduce While mentioning the need for a participatory dependency on fossil fuels and finite materi- and place-based approach, which conveys the als. This will be achieved through a circular territory as a source of endogenous materials approach that puts the focus on longer, more and ecosystem services, the Italian strategy sustainable and locally routed value chains. emphasises that citizens are consumers, and Contrary to other strategies, the Italian bio- that there will be a need to raise awareness to economic strategy identifies the key challenges promote more responsible purchase choices of the larger Mediterranean region such us: i) that will create stronger bioeconomy markers. high hydric stress and climate change affecting

European Forest Institute • 45 Innovation and digital economy increase in the use of wood in sustainable con- struction and general advocacy for high-value No clear guidance is provided on how to better new wood products, wood-based materials, structure the research and innovation system, composites and bioenergy. This is probably although there are mentions of technological because forest biomass is seen as a companion and social innovation, industrial symbioses, of agricultural biomass. Value chains on non- training in entrepreneurship and demand wood forest products are barely mentioned side innovation through, for example, stand- and neither is the role of ecosystem services. ardisation. Similarly, digitalisation is solely addressed as an opportunity for increasing agronomic techniques and productivity, al- 2.4 Portugal’s green growth though there is one mention to smart manu- commitment facturing or industry 4.0. Portugal does not have a bioeconomy strat- egy, but it is developing a long-term develop- Role of forests ment model that first took shape in the Green Growth Commitment that was adopted in Forests are seen in the Italian strategy as a 2014, and was led by the Portuguese Ministry relevant carbon reservoir, a high biodiversity of Environment, Spatial Planning and Energy ecosystem and as the source of biomass. The with over 100 organisations that participated balance among them and the new opportu- in a significant consultation process (Governo nities and challenges that the bioeconomy de Portugal 2015). presents are not discussed. Sustainability, for example, is linked to certification. Drivers and focus, Lack of forest management, the negative im- including other technology trends pacts of climate change, a high dependency on imported wood (and the associated risks The Green Growth Commitment is an agenda of illegal timber), low competitiveness and the for long-term environmental sustainability, lack of a business mentality in the local forest growth and employment incorporating cir- sector are seen as major hurdles. In fact, the cular economy and bioeconomy approaches furniture and paper sectors generate 420 000 and targets across sectors including the con- jobs and a turnover of EUR 60 billion. How- struction, agriculture, forestry and waste ever, 80 % of the wood demand is satisfied management industries. The main drivers through imports. Local production is mar- are: climate change and its related challeng- ginal and oriented to low-value products and es (biodiversity, water, etc.) in the context energy. The weak integration of Italian forests of increased demands for food, energy and into the industrial value chains is a major chal- water; the mismatch between the value and lenge but also an opportunity. However, no the management of natural resources; and orientations is given for the future develop- the need to create green jobs through green ment of forest industries other than a desired growth, building on existing strengths. The

46 • Chapter 2. Forests and forestry in southern European bioeconomy strategies Green Growth Commitment has 14 objec- targets in relation to carbon emissions, mate- tives and 114 actions addressing stimulus for rial intensity, condition of water bodies, use of green sectors, the efficient use of resources, waste in the economy, biodiversity conserva- the energy transition towards renewables and tion and natural capital accounting. Reduc- biodiversity improvement. Some interesting ing the risk of soil degradation is a specific objectives for a circular bioeconomy are: target for the agricultural and forest sectors. When it comes to using biomass, it provides • Increasing the productivity of materials (from no guidance on how resource efficiency will EUR 1.14 of GDP per kg of materials consumed be achieved (e.g. cascade use, hierarchy of in 2013 to EUR 1.17 in 2020 and 1.72 in 2030). uses and biomass fractionation, etc.). Social issues are not directly addressed although it • Increasing the use of waste and by-products emphasises public participation through a as raw materials in the economy (from 56 % in green coalition that a consultative body open 2012 to 68 % in 2020 and 86 % in 2030). to civil society representatives.

• Increasing the ratio of building renovations to new buildings (from 10.3 % in 2013 to 17 % Innovation and digital economy in 2020 and 23 % in 2030). Research and innovation is one of the cata- • Increase the share of renewable energy (from lysers for green growth, along with green tax 25.7 % of final energy consumption in2013 reform, public procurement, access to fund- to 31 % in 2020 and 40 % in 2030) and reduce ing, and social awareness and participation. CO2 emissions (from 87.8 tonnes of CO2 in Research and development priorities are 2012 to 68.0-72.0 tonnes of CO2 in 2020 and cross-sectoral, focusing on developing and 52.7-61.5 tonnes of CO2 in 2030). upscaling technological and business model eco-innovations. The Green Growth Com- • Valorise biodiversity (from 81 species and mitment does not identify links with the digi- 46 habitats with favourable conservation sta- tal economy or with nanotechnologies. tus per bio-geographic region in 2012, to 96 species and 53 habitats in 2030, while ensur- ing that in 2020 all existing species and habitat retain or improve their conservation status).

Sustainability and social issues

Green economy principles (resource efficien- cy, reusing, recycling) and reducing carbon and material intensity are key elements of the Green Growth Commitment. Contrary to other strategies, it does have quantifiable

European Forest Institute • 47 Role of forests Forests are also relevant in relation to qual- ity and quantity, biodiversity conservation, Forests and forests-based industries repre- green tourism, and to healthy cities where the sent 2.1 % of GDP and 10 % of national ex- role of forests as green infrastructure is being ports. The Green Growth Commitment also promoted. Additional targets in reference to recognises the social, cultural and ecological forest industries address improving the use value of forests, acknowledging the existence of waste streams, energy efficiency and self- of different social perceptions and attitudes dependency through bioenergy. Crosscutting towards forests and forestry. Targets in rela- actions such as improved national cadastre tion to forests include: and tax reform, also target sustainable for- est management, which would benefit from a. support for creating innovative, low carbon, resources collected through green taxes on forest-based products and placing on them carbon, vehicles, plastic bags and waste. Fi- on the market; nally, forest fires are recognised as the most b. improving forest management and produc- relevant threat to forests in the green econo- tivity; my. Proposed actions include a 17 % increase c. increasing forest certification; and in fire suppression budgets and enforcing the d. making joint management more dynamic. Plano Nacional de Defensa da Floresta contra Incêndios.

48 • Chapter 2. Forests and forestry in southern European bioeconomy strategies 2.5. Spanish Strategy in relation to agro-food systems. These are on Bioeconomy 2030 described as:

The Spanish bioeconomy strategy, adopted • the need for new varieties resilient to envi- in 2016 (Gobierno de España 2016), was led ronmental stresses; by the State Secretary for Research and In- • increasing efficiency in the use of water and novation with a limited consultation process. ; It includes a definition of the bioeconomy, • reducing negative environmental externali- objectives and concrete measures to be up- ties; and dated in annual work plans. A bioeconomy • reducing waste all along the agro-food observatory was presented in September 2017 chains. with the intention of adopting and promoting the action plans. In relation to waste, the strategy prioritises re-use and recycling and advocates for cas- cade use. The positive environmental and Drivers and focus social impacts of the bioeconomy are taken for granted, though the importance of build- Key drivers identified are: ing social support is highlighted. The Spanish strategy recommends using a tailored com- 1. Change in global consumption patterns munication strategy, and it recommends cre- due to population growth, urbanisation ating a stakeholder panel to engage multiple and broadening of the global middle class. actors through existing bioeconomy-related 2. Climate change that will impact primary online platforms. production and biodiversity and that re- quires increased water efficiency and more sustainable production systems. Innovation, research, training 3. Increasing the competitiveness of the bio- and education based sectors, with a strong focus on agro- food. Authored by the State Secretary of Research, the Spanish bioeconomy strategy emphasises The bioeconomy is defined as “the sustainable research and innovation as well as existing transformation of biomass from agriculture, financial means. It advocates for increased forestry, fisheries and waste.” cooperation between research, industry and society, but does not explain how to go about creating such relationships. It also proposes Sustainability and social issues specific measures to create training materi- als at multiple levels, to increase capacity and Sustainability is a commonly used keyword skills within new bio-technologies. but the Spanish bioeconomy strategy does not elaborate on its meaning. There are some concrete explanations of sustainability only

European Forest Institute • 49 Role of forests Like the EU bioeconomy strategy, southern European bioeconomy strategies adopt a bio- Forest and forest industries are one of the tar- resource approach. They strongly emphasise get areas of the bioeconomy along with, agro- the industrial transformation of biomass and food chains, fisheries and aquaculture, and pay much less attention to place-based devel- waste. The emphasis is placed on improving opment strategies or to other portions of the the efficiency of traditional value chains and bio-technology sector, notably pharmaceu- adapting forest production to climate chain. ticals. Consequently, the links between the The strategy mentions the existence of oppor- bioeconomy and social agendas are weak. tunities to develop new bio-based products While technological innovation is seen as and materials but does not elaborate on them. a key driver, social innovation is generally It hints at a potential role for bio-refineries ignored. However, the role of social innova- but without further elaboration on feedstock tion in innovation generally and in wellbe- sources or on the role of existing forest indus- ing is increasingly recognised elsewhere. It tries. The economic role of non-wood forest is understood as a new mode of governance products, nature-based tourism and leisure where citizens are actively involved. It has activities are also acknowledged, but without been effective in addressing the challenges proposing specific actions. of climate mitigation, social justice, aging populations, etc., but also the culture of trust and risk-taking that is needed to promote sci- 2.6 Main gaps in national entific and technological innovations(BEPA bioeconomy strategies 2010). Social innovation could be critical to address biomass-fire-water nexus hurdles A bio-resource perspective in resource mobilisation that are emerging from fragmented forest ownerships, missing The following are the three main approaches owners and the relatively weak presence of to the bioeconomy described by Bugge, Han- cooperatives. sen and Klitkou (2016):

1. bio-technology vision that emphasises the A lack of transformational ambitions importance of research and the develop- ment application of bio-technologies in The reviewed bioeconomy strategies share a different sectors of the economy; sectoral approach. They focus on developing 2. bio-resource vision that focuses on process- biomass transformation sectors but are not ing and upgrading biological raw materials ambitious when it comes to the transforma- and their supply chains; and tional potential of the bioeconomy. There are 3. bio-ecology vision that highlights sustaina- no overarching goals or targets in relation to bility, ecological processes and place- based sustainability (e.g. reducing material intensity, development. avoiding carbon emissions, etc.) nor are there targets for biologising key economic sectors (e.g. construction, textile, etc.) this is dealt

50 • Chapter 2. Forests and forestry in southern European bioeconomy strategies with in other sectoral policies (i.e. climate efficiency, hierarchy of uses, cascade use, etc.) change mitigation, renewable energy, etc.). as well as through public debate at multiples Notably, the strategies do not delve into what levels to address the legitimate reticence of the bioeconomy can do for more sustainable different societal actors. In this way, it cov- and liveable cities, nor do they go into how ers most of the sustainability concerns of the to bring the bioeconomy to cities. The Portu- research community identified by (Pfau et al. guese Green Growth Commitment represents 2014). None of the strategies addresses the po- a notable exception. It is a very different type of tential negative impacts in third countries, as document and is not directly comparable with for example through induced land use change. the bioeconomy strategies of other countries. It departs from a sectoral view (and addresses, Resource efficiency, hierarchy of uses and cas- even if partially, the potential contribution cade use are generally endorsed, with no refer- of bio-based and renewable industries to the ence to possible hurdles in implementation. greening of main economic sectors, including The draft French strategy on mobilisation water, energy and cities. It is also closer to an of biomass under development7, proposes a action plan with concrete actions and targets. pragmatic approach. It makes material uses of wood, including engineered wood products, a policy priority, meaning that energy uses Sustainability as driver would not receive public support. However, and expected outcome it admits that there is not enough market pull to absorb all the available wood supply. The need to create sustainability is the motiva- It then considers energy uses of biomass as a tion for the strategies, however the concept, good transitional solution. All the strategies as it is considered in most european bioec- propose a life cycle analysis as a relevant tool onomy strategies, is either taken for granted to guaranty sustainability, but they offer little or is only addressed in general terms (Staffas, detail on how to embedded it in a future policy Gustavsson and McCormick 2013). Intense framework. It remains to be seen how com- climate change and water scarcity are identi- plex resource use challenges will be inserted fied as key environmental challenges in all into future bioeconomy policy frameworks. reviewed strategies, while the tensions caused by migration in the Mediterranean are di- rectly acknowledged only in the case of Italy. A directional narrative The French strategy is notable, as it identi- to engage consumers fies sustainability challenges across the value chain, including aspects such as the risk of All strategies acknowledge the need for social degradation of natural capital, unsustainable support. The French strategy gives quite a lot primary production practices, resource com- of attention to defining the themes that require petition, negative environmental impacts and public debate and the territorial scale (e.g. lo- a lack of social integration. It also proposes strategic approaches to minimise those risks 7 http://www.consultations-publiques.developpement-durable. gouv.fr/projet-de-strategie-nationale-de-mobilisation-de-a1719. (e.g. improve production practices, resource html

European Forest Institute • 51 cal, regional, national, global) that might be 2.7 Approaches to the bioeconomy more adequate. This debate should help to in smart specialization strategies overcome different views on the bioeconomy and secure a more equitable share of benefits Regional Innovation Smart Specialization and burdens. The Portuguese Green Growth Strategies, also called RIS3s, are place-based Commitment also acknowledges the exist- economic transformation agendas that iden- ence of different legitimate views on the use of tify key priority areas for policy support, in- natural resources. These two documents were novation and investment. They must leverage based on more comprehensive public and/or regional strengths, competitive advantages parliamentary debate. Social aspects are given and potential for excellence. RIS3 strategies weak consideration in other strategies, where are bottom-up business discovery processes citizens are mainly seen as consumers whose promoted by the European Commission and purchase patterns need to be well understood are a requirement for receiving funding from and steered towards the bioeconomy. These the European Regional Development Fund strategies follow a European trend where (ERDF). They should provide the strate- strategies propose a governmental rather than gic framework to align actors and policies. a governance approach (Pülzl, H. et al. 2017). Through their bottom-up, participatory ap- Costanza (2014) proposes a participatory vi- proach and their direct links to the ERDF, sion of plausible and desirable futures as a the RIS3 strategies provide an opportunity to more effective way to engage different societal understand how the bioeconomy is being im- groups in developing a paradigm shift. plemented in regional development policies.

According to a recent study (Spatial Fore- Fragmentary consideration sight, SWECO, ÖIR, t33, Nordregio, Berman of the necessary framework conditions Group, Infyde, 2017) most EU regions have at least some bioeconomy-related approach Access to finance, the capacity for risk, the in their RIS3 strategies. Table 7, summarises regulatory environment and public-private the main priorities in relation to production collaboration, and the connections between and processing of biomass for the EU28 and, research, innovation and training are all rel- specifically, for southern regions. Agriculture evant aspects of a bioeconomy framework and agro-food chains are the most common (Hetemäki et al. 2017). They are acknowl- priorities for biomass production in the EU edged in the strategies, but they are dealt with and particularly in southern Europe. There, in a fragmentary way. In addition, the links forests and forestry are a priority in 38 % of between the bioeconomy and the circular the regions, which compares with 45 % of economy are not addressed in any detail, nor RIS3 strategies addressing marine biomass are the opportunities or challenges related to and 28 % focussing on waste. the digital economy or nanotechnologies. A more comprehensive approach to these rel- In relation to products and services, bioener- evant aspects of the bioeconomy is needed. gy is the most frequent non-food value chain present in 70 % of all strategies. Bioenergy is

52 • Chapter 2. Forests and forestry in southern European bioeconomy strategies frequently the only forest-related priority, mandatory European targets (i.e. defined in even in regions with significant forest indus- the European Climate and Energy package). try, as is the case of Spanish Galicia. Although It is tempting to think about what such policy relevant, wood construction and advanced targets could do to boost other bioeconomy uses of solid wood receive far less attention, sectors. In very general terms, except for the despite the larger potential for positive envi- sophisticated agro-food value chains, south- ronmental and economic impacts. The pre- ern European regions seem to be placing less dominance of bioenergy could be the result of attention on higher added value bio-based the relatively lower complexity of bioenergy sectors such as pharmaceuticals and cosmet- value chains, but it is probably also related ics, bio-materials, sustainable construction to generalized existence of renewable energy and advanced bio-refineries than the central action plans and policy targets derived from European and Nordic regions.

Table 7. Bioeconomy priorities of European Regions. Percentages reflect the proportion of regions adressing each priority in their RIS3 Strategies

Biomass production EU-28 Southern Europe

Agricultural biomass 57 % 71 %

Marine and aquaculture biomass 29 % 45 %

Forest biomass 38 % 38 %

Waste 31 % 28 %

Bio-based products and services

Food and beverages 64 % 83 %

Biorefineries 31 % 22 %

Bio-based chemicals and plastics 40 % 28 %

Pharmaceuticals and cosmetics 26 % 12 %

Timber and bio-construction 29 % 22 %

Bioenergy and bio fuels 70 % 70 %

Water and other natural resources 12 % 14 %

Source: Spatial Foresight, SWECO, ÖIR, t33, Nordregio, Berman Group, Infyde 2017 and the eye@ris3 data base (http://s3plat- form.jrc.ec.europa.eu/)

European Forest Institute • 53 lon, Provence-Alpes-Côte d’Azur and Corsi- Forests in French Smart Specialisation ca) forest biomass seems to be a companion of Strategies8 agro-food biomass for the high-end transfor- mation of bio-energy. The energy transition There are five regions in southern France that is a priority in Provence-Alpes-Côte d’Azur have some forest-related priority in their RIS3 and Corsica with renewable energy and sus- Strategies (Table 8). There is a large diver- tainable building and retrofitting as key pri- sity of approaches. In Aquitaine, sustainable orities. However, neither forest biomass nor management and wood mobilisation are con- engineered wood products are emphasised. sidered along with new high-end uses in the Except for Aquitaine, where forest-based in- green chemistry and engineered wood prod- dustries play a significant role in the regional ucts. The neighbouring Midi-Pyrenees focus economy, the potential of forests seems to be on industrial biotechnologies and advanced underestimated. In some cases, forests seem to materials for aerospace, transport and pack- be considered more of a problem than an op- aging, from renewable carbon, not addressing portunity (e.g. Provence-Alpes-Côte d’Azur). forest-related issues or value chains. In the Mediterranean region (Languedoc-Roussil-

8 French, Italian, Spanish and Portuguese regions with forest- related priorities where scanned in the eye@ris3 database. Sixteen regions where selected and their RIS3 Strategies downloaded and analysed between June and September 2016. The RIS3 Strategies are available in this repository and are not individually cited in this report.

54 • Chapter 2. Forests and forestry in southern European bioeconomy strategies Table 8. Forest bioeconomy priorities in French southern regions (NUT2 regions before the administrative reform)

NUT2 Forest bioeconomy priorities Comments

Aquitaine • Mobilisation of biomass and bio- Aquitaine has extensive softwood refineries resources, , • Wood-based sustainable construc- and biorefinery. The saw milling sec- tion and energy efficiency in build- tor is atomised and dominated by low ings added value products. Planted forests • Digital technologies for sustainably shape the landscape and contribute to managing natural resources an important tourism sector. • Cross fertilisation, material sciences with ICTs and life sciences

Midi-Pyrenees • Industrial biotechnologies for the The region has a strong focus on non-food bio-based value chains. advanced products from “renewable Focus on: 1) developing biotechnol- carbon”. It does acknowledge the rel- ogy assets (enzymes, microorgan- evance of its forest resources, but does isms, etc.) and new technologies not address forest, forestry or forest for synthesising valuable molecules based industries. Forestry is neither and polymers; and 2) advanced and considered in the priority: “innova- functional materials for aerospace, tion of territorial agro-food systems”. transport and packaging, including nano/ bio-materials

Languedoc • Valorising agricultural (and forest) Energy transition is centred on solar Roussillon production through bioenergy, but energy. Bioenergy is a complement also construction materials, biopoly- for the efficient use of agricultural mers and active biomolecules e.g. products despite a regional target of food additives 2436 GWh/yr. of bioenergy for 2020. • Health, pharmaceuticals and related The region as cross-cutting priorities biotechnologies in digitalisation, metrology, entrepre- • Water cycle, although with little em- neurship and social innovation. phasis on watershed management

Provence-Alpes- • Energetic transition with a focus on The region produces only 10 % of its Côte d’Azur renovating buildings (no mention of total primary energy demand dis- wood construction), smart grids and tributed as: 54 % hydro, 39 % forest renewable energies, among which biomass, 4 % waste, 2 % solar and 1 % biomass is barely considered wind. The only mention of forests is • Health and nutrition are key, in- in relation to forest-fire risk under the cluding nutraceuticals and natural priority related to defence technolo- cosmetics gies.

Corsica • Valorisation of natural and cultural Sustainability and bio-construction resources includes consolidating the are key elements of energy produc- wood-value chains. Emphasis is on tion and are not necessarily linked to the agro-food sector existing wood or cork value chains. • Energy production, distribution and Bioenergy is considered among the management with an emphasis on renewable energies with a lesser role. sustainable construction, solar ener- Tourism is seen as a cross-cutting sec- gies, smart grids and ICT applica- tor that needs to be better integrated tions with forest and agro-food value chains.

European Forest Institute • 55 Table 9. Forest bioeconomy priorities in Italian RIS3 strategies

NUT2 Forest bioeconomy priorities comments

Valle d’Aosta • Agro-wood value chain, sustainable The RIS3 says nothing about how to construction and renewable ener- develop the wood-value chain, the gies are prioritised under Sustainable role of timber in or the Mountains, with digital and biotech- role of biomass in renewable energies. nologies as KET • Tourism is a cross-cutting priority including nature-based enological and eco-tourism

Calabria • Sustainable construction is one of Construction represents 20 % of the the five pillars, with a clear focus on regional economy. Sustainable build- wood construction based on local ing is strategic and includes domotics, resources energy efficiency, quality, reduced • Sustainability of forestry and other waste and anti-seismic properties. primary productions While ICT are cross-cutting, biotech- • Diversification of tourism towards nology is linked to pharmaceuticals nature and rural tourism and health. Forest fires as risk.

Lazio • Biosciences linked to pharmaceuti- Agri-food priorities include cross- cals and clean energies in confluence fertilisation with biotech/nanotech for with ICT and nanotech new advanced materials, etc. Public • priority consid- procurement and industrial ecosys- ers decarbonisation of the energy tems are key approaches. utilities, energy efficiency in build- ings (timber construction not di- rectly mentioned), and active forest management of ecosystem services (water, tourism)

Veneto • Furniture and sustainable construc- as a cross-cutting sector tion are priorities under sustainable linked to is the only living. Nanotech, ICT and material hint of a local wood value chain. science are key KETs ICT, nanotechs, biotechnologies and • Biofuels from biomass and biogas fast prototyping are cross-cutting are an element of Smart Agri-Food. KETs. • Functional and bio-based materi- als are a relevant element of

56 • Chapter 2. Forests and forestry in southern European bioeconomy strategies Forests in Italian smart specialisation Forests in Spanish and Portuguese strategies smart specialisation strategies

Many Italian RIS3 strategies have cross-cutting Table 8 summarises the role of forests and for- priorities that could be related to forestry but est-based industries in selected Spanish and have not made the relationship explicit, as is the Portuguese RIS3 strategies. There are big dif- case in Sardinia (renewable energy, eco-tour- ferences in how the bioeconomy is addressed. ism). Table 9, presents a summary view on the A relevant group of regions (not shown in Ta- role of forests in four Italian RIS3 strategies that ble 10) put the focus on nature-based tourism do have forest or timber priorities. Sustainable and local agro-food products (e.g. Castilla la construction and furniture are the most prom- Mancha and many other regions not shown inent forest-related priorities (Veneto, Lazio, in Table 10 as Madeira (PT), Canary Islands Calabria, Valle d’Aosta, etc.) and the empha- (ES), Cantabria (ES). Frequently, RIS3 strate- sis on timber is significant. Energy efficiency, gies fail to analyse the potential of biotech- waste reduction, seismic behaviour and niche nologies and endogenous biomass sources to markets are seen to be key drivers for wood con- transform key and emerging economic sec- struction, while changes in consumer prefer- tors (automotive, housing, aerospace, textile, ences are challenges for timber furniture. Both etc.). As a result, the potential contribution sectors currently depend on imported wood of forest bioeconomy is either totally ignored, (see chapter 3.2). Advocacy directed at substi- limited to health and pharmaceuticals (e.g. tuting timber imports with national wood can Basque country) or focused on biomass sup- be read in the Italian bioeconomy strategy but is ply for bioenergy (e.g. Galicia, North Portu- not reflected in the regional priorities. Only in gal). Some regions (e.g. Portugal Centro (PT), some cases (e.g. Calabria) a forest value chain Castilla y Leon (ES)), however, have a more perspective emerges. Energy transition is also integrated vision of the potential for advanced a frequent priority, but with less emphasis on forest-based bioproducts. forest biomass and its specific challenges and opportunities. This contrasts with the relatively high use of forest biomass for energy in Italy, the existence of relevant industrial and tech- nological capacities and the high bio-electricity feed in tariffs. Interestingly, some regions (e.g. Veneto, Calabria) identify opportunities to cre- ate a biological framework for the economy, essentially to biologise the economy (fashion, advance materials for automotive, aerospace, mechatronics, construction) combining the potential of bio-technology, nanotechnolo- gies and ICTs. Finally, eco-tourism and its links with -chains and non-wood forest products are a frequent priority.

European Forest Institute • 57 Table 10. Forest bioeconomy priorities in Portuguese and Spanish RIS3 strategies

Region Priorities Comments

Galicia (ES) • Modernisation of primary sectors. Galicia produces 45 % of Spanish The focus on forestry emphasises timber and its forest industries rep- sustainable intensification, improved resent 2 % of the regional industrial profitability of biomass production GDP. However, there are no priori- and bioenergy. Rural tourism is also ties for engineered construction or considered, with a focus on ICTs advanced forest bio products or for • Industrial competitiveness focus- the improved use of side steams. The ing on automotive, and potential of lignocellulosic biomass to fashion through KETs (nanotechnol- transform key and emerging econom- ogy, advanced materials, biotechnol- ic sectors (textiles, automotive, aero- ogy, etc.) with a priority on ICTs and space) seems to be underestimated. advanced manufacturing • Healthy lifestyles with a focus on technologies for active aging and functional food

Basque Country • Advanced manufacturing, focusing A second-level priority encompasses (ES) on automotive, aeronautics, ma- several territorial opportunities, in- chine tooling, and deploying digital cluding agro-food and environmental technologies and material science, protection. Forests over 50 % of the photonics, micro-electronic and region and forest-based industries nanotechnology represent 1.5 % of the regional GPD. • Energy, with a focus on oil and gas, The application of biotechnologies is wind, marine, thermos-solar, smart focused on health. The potential role grids and new business models of bio-materials to transform key eco- • Health, with a strong focus on nomic sectors is not considered. pharmaceuticals and medical tech- nologies

Castilla y León • Environmental sustainability and Castilla y Leon has a regional forest (ES) the maintenance of natural and plan to host relevant forest research cultural heritage through sustainable centres, bioenergy international fair- innovation trades and is active in international • Advanced wood and recyclable forestry issues and leads, for exam- materials ple, the Mediterranean Model Forest • ICT solutions for forestry and other Network primary sectors

Castilla la Mancha • Game industry as part of the agro- The region has extensive traditional (ES) food and tourism value chains agroforestry areas (dehesas) but very • Local products with regional labels, little active forestry. It has a significant as those coming from traditional forest fire problem that absorbs most agro-forestry of the regional rural development • Biotechnologies funds devoted to forestry.

58 • Chapter 2. Forests and forestry in southern European bioeconomy strategies Region Priorities Comments

Portugal Norte • Creative industries and fashion, Other specialisation areas are i) life (PT) with a focus on textiles, shoes, furni- science and health, with a focus on ture and apparel. Advocates for bet- pharmaceuticals, ii) marine economy, ter inclusion of cork, but otherwise including marine energies and naval little emphasis on biomaterials construction, iii) specialised services, • Mobility and environment. New ma- with a focus on ICTs iv) heritage and terials for transport and aeronautics tourism, with strong links to food and biofuels. The potential of cork is specialities. mentioned along with cross-cutting North Portugal has significant forest nanotechnologies and ICTs resources and forest-based industries. • Agro-environment and food, with The potential synergies with priority a focus on sustainable forest and areas are not addressed. agricultural practices, the expansion of functional food products (wine, oil, chestnuts), local specialities and smart packaging

Centro Portugal • Sustainable industrial solutions, Forests receive special attention along (PT) based on smart manufacturing, new with agriculture, ICTs, biotechnolo- materials including forest based gies and tourism. They are relevant • Efficient use of regional, natural for the regional economy, contribut- resources, including renewable solar ing up to 40 % of Portuguese forest energies, the sea and biomass; value GDP. Key challenges for sustainable chain approach from production to production are identified. The poten- markets, also including nature-based tial contribution of new materials and services renewable energies are addressed. • Technologies for quality of life with a focus on medical technologies and active aging • Territorial innovation, including cross-cutting approaches to rural development, sustainable cities and tourism

Alentejo (PT) • Agro-food and forestry, with a fo- The region prioritises i) heritage, crea- cus on agro-industries and cork and tive industries and tourism, which in- the multi-functionality of agro-food cludes eco-tourism; and ii) advanced systems through agro-tourism services for the social economy, with • Economy of natural and environ- a focus on new business models, the mental resources, with a focus on digital economy, wellbeing, active and quarrying resources, but aging and smart cities. Alentejo is also water services linked to biodi- highly specialised in agriculture and versity forestry (14 % of regional employment • Key technologies, energy and mobil- and 42 % of research capacities). The ity, with an emphasis on solar en- potential of biotechnologies is almost ergy, traditional energies and smart totally ignored. grids a subsidiary role for biomass. Advocates for efficiency and use of agro-waste streams in bio-refineries

European Forest Institute • 59 Overview of the role of forests in in their emphasis on bio energies and on sus- southern smart specialisation strategies tainable construction as elements of the energy transition. In this respect, timber construction The general picture that emerges from the anal- is a priority in 22 % of all southern regions and is ysis of RIS3 strategies in southern Europe is one important in Italy and France (see Tables 8 and of incremental innovation focused on existing 9). But, the principles of the circular economy sectors, with limited scope for disruptive in- (e.g. share, re-use, recycle) and resource effi- novation. This can be seen in Galicia’s focus on ciency (e.g. cascade, hierarchy of use) receive forest bioenergy or the Basque Country’s em- little attention, which is perhaps because of the phasis on oil and gas. More disruptive and long- nature of the analysed documents. Interestingly, er-term approaches could give the bioeconomy waste as a material is only a priority in around a chance to effect change. In general terms, 30 % of southern regions, similar to the EU28 RIS3 strategies have a strong component of (see Table 7). technological innovation to achieve economic goals and to create wealth. Many RIS3 strate- Another significant element of the strategies, gies capture the transformational potential of when it comes to forest biomass, is the fre- digitalisation across sectors, from tourism to quent disconnection of the forest value chains. mobility, pharmaceuticals or health. This is not While some regions emphasise the supply of well addressed in the national strategies. The forest biomass with little thought for develop- ­potential of biotechnology­ is generally linked ing potential new uses beyond bioenergy (e.g. to the pharmaceutical and health sectors or to Galicia), other regions focus on advanced uses the transformation of waste. While biosciences of biomass with no, or very little, consideration are recognised as necessary to improve primary for regional supply chains (e.g. Midi-Pyrenees). production, much less attention is paid to bio- Notable exceptions are found in all countries, technologies in relation to forest biomass and particularly in Aquitaine (FR), Castilla y Leon industrial waste streams. There are, of course, (ES), Calabria (IT) or Alentejo (PR). The lack exceptions, as in the Midi-Pyrenees where of strong forest-related interest groups has frac- they emphasise biotechnologies for develop- tured public perception on the use of forest ing biomaterials for advanced industrial sec- resources. The relatively weak contribution of tors such as aerospace. Biosciences are viewed forests to the regional GDPs and the short-term as a key for improving primary production in focus of RIS3 strategies are possible causes for agriculture and forestry in many regions with the general lack of a comprehensive approach significant academic and research capacities to forest value chains. in biology, agronomy, geology and/or forestry. But, much less attention is paid to social inno- Finally, a significant number of regions are vation, governance and policy issues. making it a priority to capture the value of nature, forests and agro-ecosystems through Another interesting element in the strategies is eco-tourism and other territorial approaches their frequent consideration of environmental based on commercialising local productions sustainability as a necessary driver or compo- and the mise en valeur of their natural and nent of regional specialisation. This is reflected cultural heritages.

60 • Chapter 2. Forests and forestry in southern European bioeconomy strategies 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions

This section discusses the potential contribu- demand. Fossil-based fibres represent70 % of tion of forests and forestry to the circular bio- all textiles (90 million tonnes in 2015) and economy, sustainability and competitiveness 98% of all plastics are fossil based. Plastics are in three key sectors: i) advanced forest-based at the core of modern manufacturing indus- bio-products; ii) building with wood, and iii) try. Over 300 million tonnes of plastic poly- non-wood forest products. It presents mar- mers were produced in 2016, fulfilling needs ket foresight, technology trends, economic in all sectors of the economy from ephemeral drivers and barriers. It also highlights some packaging to high-value applications in the specific cases and examples. This section does medical or aeronautical sectors. These textile not address the challenges and opportunities and plastic economies work in an almost to- related to the use of forest biomass for energy. tally linear mode. In 2015, the consumed 98 million tonnes of oil, produced 2 % of total carbon emissions and shed half a 3.1. Advanced bio-products: million tonnes of microfibers into the oceans, emerging products being responsible for 20 % of industrial waste- and technologies water pollution. Only 12 % of textile fibre is recycled, and even that is only for generally An important market pull for bio-based low-value products (e.g. isolation material). materials The majority (73 %) is incinerated or thrown into after being owned by a single user. Throughout the twentieth century, the devel- Some 90 % of all plastics are produced with opment of petro-chemical technologies, the virgin feedstock accounting for 6 % of total oil low cost of feedstocks and a lack of considera- consumption. Globally, the plastic recycling tion for potential negative externalities led to a rate is merely 14 %, the majority (54 %) is in general application of fossil fuels and materi- landfill or is incinerated after being owned by als in all types of economic activities. Today a single use, but over 30 % leaks into oceans fossil energy meets over 80 % of total energy and terrestrial ecosystems (Ellen MacArthur

European Forest Institute • 61 Foundation 2017, World Economic Forum lignocellulosic tissues in general) have other 2016b). Current trends are not viable. By extractable compounds (1 %–1 0%) that pro- 2030 demand for textiles will grow 44 % and vide valuable molecules. With different de- will double for plastics, multiplying grees of engineering, solid wood can be used demands and negative externalities. A new as a manufacturing material and an energy plastic and textile economy requires a circular feedstock. Its components can also be sepa- approach based on renewable feedstocks, and rated and processed independently through a new generation of fibres and polymers that different chemical pathways. There are many are highly reusable, recyclable and biodegrad- ways to separate and extract those compo- able (Soetaert and Vandamme 2009, CIRCFS nents and different biomass types have specif- 2017, Baskar et al. 2012, World Economic ic characteristics (e.g. chemical composition, Forum 2016). The biotechnological revolu- anatomical and structural characteristics). Se- tion and the need to address climate change, lecting fractionation, product recovery, puri- pollution, and hyper accumulation of waste fication and conversion depend on the type and marine litter are creating momentum for of biomass and on the targeted products. It a new generation of bio-based materials that can have decisive impacts on yeilds, qualities will redefine the characteristics and bounda- and economic viability. Once fractionated, the ries of current forest-based sectors (Soetaert original cellulose fibres can be preserved to a and Vandamme 2009, Kant 2012). Opportu- certain degree to produce paper, textile fibres nities for bio-based products are not limited or cellophane. Cellulose and hemicellulose to textiles and plastics. A relatively reduced components can be completely hydrolysed set of platform molecules (e.g. into basic sugars to produce ethanol and plat- ethene, propene, benzene, methanol, etc.) form molecules that enter into the sugar pro- are used to produce a large array of products cessing routes. The lignin fraction can then be such as rubbers, nylons, solvents, latex, dyes, processed independently. Specific molecules emulsifiers colourants, etc. Bio-based build- and essential oils can be extracted through ing blocks are gaining market traction as different processes.These four main streams drop-in replacements of fossil counterparts are described bellow. or as the basis for new chemical pathways and new products to use in all types of applica- tions from construction to agriculture, food Cellulose fibres and feed (Farmer and Mascal 2015). Lignocellulosic biomass is well placed to play a significant role in replacing fossil-based tex- Emerging opportunities for wood and because of the quality of the fibres that can other lignocellulosic biomass be produced and because its environmental footprints is much less than cotton (e.g. water, The main components of wood, cellulose pesticides, competition for agricultural land). (35 %–50 %), hemicelluloses (20 %–35 %) and Cellulose textiles are already 7 % of all fibres. lignin (5 %–30 %) are the most abundant natu- The demand will increase significantly in the ral polymers on Earth. In addition, wood (and next few decades (Hämmerle 2011). Viscose is

62 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions the main artificial bio-based textile. It can be ricultural land, however, is limited and food produced from many lignocellulosic materials, production (e.g. food first) is a well stablished including bamboo and agricultural waste, but policy priority in most bioeconomy strategies currently it is mainly produced from dissolving (see chapter 2 in this report). For this reason, pulp, a specialty highly pure (more than 90 %), lignocellulosic, or second generation, feed- bleached cellulose, the production of which stocks, are a promising source of sugars (cel- has more than doubled over the last few years lulose, hemicellulose) for their abundance and representing 3.5 % of all cellulose production because they might compete less with food (FAOSTAT). It can be produced in sulphite production. However, lignocellulosic indus- pulp mills or in Kraft pulp mills with an acid trial technologies still need time to mature pre-hydrolysis. However, traditional viscose in order to compete with better established uses carbon disulphide, a toxic chemical. Pour- sugars, starches and oils. Notably, the recalci- safe measures and wastewater treatment have trant nature of lignocellulosic biomass limits serious human health and environmental ef- the conversion of cellulose and hemicellulose fects (Changing Markets Foundation 2017). to sugar streams, and thus pre-treatment and Safer technologies (e.g. Spinnova) and alterna- extraction technologies become determi- tive processes based on less hazardous chemi- nant in terms of yields and costs (Carus and cals (e.g. Lyocell, Modal) are emerging but still Dammer 2013). New optimized fractionation need to gain increased market share (see sec- methods can maximize sugar yields for spe- tion 4.2). Solving these environmental issues cific chemical pathways and can also reduce will create new opportunities for the forest sec- environmental footprints, increasing the com- tor, also in southern Europe. While converting petitiveness of lignocellulosic sugar streams current pulp capacities in the Atlantic regions (Werpy and Petersen 2004). Promising tech- can be relatively straightforward (e.g. the case nologies include different mixes of organic of Tembec in Aquitaine), developing a new solvents (Organosolv) or ionic liquids (ILs), textile sector based on European dissolving which can effectively recover over 90 % of pulp will continue to be a challenge as most the cellulose and hemicelluloses in moderate of it is currently exported to Asia for further temperatures and pressures (reducing energy processing. Outside pulp-producing regions, needs, carbon footprints and required capital additional challenges relate to developing and investments). Once extracted, celluloses and or adapting emerging technologies to available hemicelluloses can be hydrolysed rendering lignocellulosic sources. fermentable sugars that can replace first gen- eration sugar feedstocks (e.g. corn, sugar cane, etc.) in the production of biofuels, polymers, Sugar streams bioplastics and chemical building blocks. A second very active area of interest is micro- Currently, most bio-polymers and building organism engineering to design fermentation blocks are made from plant sugars and plant routes tailored for specific feedstocks and oils (first generation feedstocks), sourced from end-products, which will open new markets dedicated crops and, to a lesser extent, from for highly specialised knowledge providers. agricultural or post-consumer-residues. Ag- High synergies between different research

European Forest Institute • 63 fields are expected. The combination of these less often, sold for low value applications. In biotechnologies with process engineering, in- some cases, electricity is generated through formation and computing technologies and combined heat and power (CHP) installations. nanotechnology represents a new technologi- This contributes to energy self-sufficiency and cal paradigm with the potential to create a new has a positive effect on the mill operations. generation of high performance biomaterials. Other viable options are based in complete depolymerisation. Lignin can be gasified to produce syngas (a mixture of H2 and CO2). Lignin stream Pure hydrogen can be fed into fuel cells for energy or it can undergo a different chemi- Lignin comprises up to 30 % of the mass and cal process. It can be converted to methanol 40 % of the energy content of agricultural and and biogasoline or transformed into biodiesel forest biomass. Lignin is a by-product of pulp through the Fischer-Tropsch technology. To- mills and lignocellulosic sugar streams. Lignin tal depolymerisation of lignin means using is complex and chemically and physically very energy to deconstruct what biosynthesis has robust. In addition, contrary to what happens produced. Arguably, the process will have to with cellulose and hemicellulose, its structure become more efficient if more complex mol- varies among species (e.g. softwood vs. hard- ecules are to be obtained. However pyrolysis wood) and is also changed during the frac- or chemical hybridisation are energy intensive tionation (Holladay et al. 2007). This means and produce complex mixes of molecules that that lignin extracted in Kraft pulp miles is require costly purification, rendering them basically a different feedstock from lignin ex- uncompetitive (Farmer and Mascal 2015). For tracted in sulphite mills. For those reasons, this reason the most promising short-term al- the main use of lignin is for energy. Gener- ternative to energy uses relies in finding appli- ally, lignin is burnt in mill operations or, much cations to essentially unmodified forms. There

64 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions are, in fact, niche markets for many unaltered antimicrobial and antifungal agents. From an forms. Lignosulfonates produced in the pulp- application point of view, preparations contain- ing process are used as dispersants, emulsifi- ing one or more phytochemicals could be used ers, binders, sequestrates and (Jong in the agro-food chain as natural crop protec- et al. 2011). These are relatively low value and tion or food preserving agents. Technologies have low-volume applications. In the midterm, like supercritical CO2 and superheated water although there continue to be significant ob- extraction, ultrasound and microwave assisted stacles, lignin represents a potentially low-cost extraction, extraction with deep eutectic sol- source of carbon polymers such as polyacry- vents and ionic liquids and steam explosion lonitrile (PAN) suitable to produce carbon are very efficient and cost-effective methods fibre(Meek et al. 2016) at significantly lower of extracting bioactive components with high costs (Mainka et al. 2015). Required lignin added value for cosmetics and pharmaceuti- grades can be obtained from the regular Kraft cal applications. Extracting low-volume, high- pulp side stream (Norberg 2012). Diverting value molecules from rich and diverse forests ten per cent of the lignin that is potentially could be an important opportunity for the available in the United States could produce bioeconomy in southern Europe. enough carbon fibre to displace about half of the steel in domestic passenger vehicles (Hol- laday et al. 2007) This could lead to significant Moving forward weight emission reductions in the . The Swedish research centre RISE “The critical question does not appear to be is working towards developing commercial what can be made of forest biomass, but rather grade lignin-based carbon fibres by 20259. what will be made, on what scale, where, and driven by what?” (Hetemäki and Hurmekoski 2016). Southern Europe is active in the bio Valorising extractables refinery arena. France, Italy and Spain alone account for one-third of all bio refineries 77( Extractable compounds represent (1 %–10 %) out of 224) recorded by the Nova Institute of lignocellulosic biomass. Interestingly, ex- and the Europa-bio, although with very few tracts are often obtained from unused parts wood-based or lignocellulosic bio refineries of trees or from the bark and can contain ac- (figure 10). Given the limited, if any, premi- tive and useful ingredients that are currently um price for biopolymers and fibres, policies underexploited. These components (e.g. sec- and regulations will play an important role in ondary metabolites) include alkaloids, carot- directing market developments (Carus et al. enoids, flavonoids, phenols, resins, sterols, 2013). As an example, the ban on supermarket tannins, terpenes and waxes. This group of plastic bags has helped to make Europe one of phytochemicals is responsible for a variety of the leading producers of highly-degradable, biological actions, both invitro and in-vivo, for starch blends (Aeschelmann et al. 2016). Un- example as antioxidants, insecticides and as fortunately, until recently, the EU lacked a fa- vourable policy framework, as only bioenergy 9 http://www.innventia.com/en/Our-Expertise/New-materials/ Carbon-fibres/Swedish-lignin-based-carbon-fibre/ and biofuels have mandatory targets, incen-

European Forest Institute • 65 Biorefineries in Europe 2017

Figure 10. Biorefineries in Europe, 2017 Source: Bio-based Industries Consortium (BIC) and nova-Institute (http://bio-based.eu/markets)

66 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions tives and feed-in tariffs. Without comparable in their smart specialisation strategies (29 % support, bio-based chemicals and polymers in the EU28). Regions with significant wood- will continue to suffer from underinvestment working industries have specifically identified by the private sector. But policies will not be timber construction as a priority. This trend enough. It will be necessary to create the condi- is especially obvious in France and Italy, over, tions that facilitate the emergence of new bio- Spain, Portugal and Greece. based solutions; among them, special attention should be given to the supply and availability • Timber has intrinsic advantages. It has been of wood and other lignocellulosic biomass. estimated that every tonne of wood used to replace other materials (concrete, steel, etc.) implies a reduction of 2.1 tonnes of carbon 3.2 Building with wood: current emissions (Sathre and O’Connor 2010). In ad- situation and future prospects dition, it has good thermal insulation prop- erties and can deliver highly efficient and Greening the construction sector is a key chal- cost-effective building and retrofitting solu- lenge for sustainable development (UNEP tions. It reacts well in case of fire, when used 2011). In the EU28, the construction sector for structural purposes, as it does not collapse represents 35 % of all greenhouse gas emis- under high temperatures and, when used in sions, 50 % of extracted materials, 30 % of all interiors, it can positively influence indoor air water use and generates some 40 % of all waste. quality and human health (buffers humidity, It is also quite relevant in economic terms and softens acoustics, creates a stress-relieving at- adds up to around 10 % of GDP while em- mosphere). In addition, the high seismic re- ploying 12 million people (Hurmekoski 2017). silience of timber buildings is an important Compared to many manufacturing industries, advantage in earthquake-prone countries as there have been few major improvements Italy, Greece or Turkey (UNECE 2017). over the past few decades in the productivity, profitability, or the environmental impact of • The emergence of new engineered wood construction in the sector. A more (EWP) has greatly enhanced the construction sector requires increased use of possibility of prefabricating structural com- materials with low embodied energy, like tim- ponents giving architects greater flexibility in ber and cork, as well as improved environmen- construction modes, opening new markets tal performance (e.g. passive house standards) in large-scale construction like multi-storey in new buildings and extensive retrofitting of residential and collective buildings (e.g. of- older construction. There are some key drivers fices, schools, , industrial and sports pushing a renewal of timber building: halls, etc.). Lightweight, high , dry construction materials are easier to use, • There is strong policy momentum for devel- lighter to transport and produce less waste. oping a more sustainable construction sector The largest construction markets in south- in general as part of the energy transition. ern Europe, however, is related to the ret- Overall, 22 % of the southern regions have rofitting, renovation and re-structuring of included sustainable construction as a priority existing buildings. This brings the challeng-

European Forest Institute • 67 ing opportunity of developing site-specific, and are not simply an intellectual or ideologi- high quality designed engineered structural cal choice. Today, sustainable construction is and non-structural (e.g. windows, doors, …) a key priority for many Italian regions (see building components. section 2.7).

• Timber construction requires relatively low quantities of wood, and new EWPs can be Recent trends in wood construction developed based on many different species and wood qualities. It has been estimated According to Centro Studi Federlegno Arre- that reaching a 20 % market share of timber do Eventi SpA (2017), in 2015 Italy comes construction in the EU will only require 10 % fourth in Europe for constructing residential of today’s European wood production. New timber buildings with a share of 7 % of the markets for EWPs can activate significant whole residential building market. The grow- side-streams based on wood residues (e.g. ing diffusion of timber structural systems in chips, sawdust and bark, which can be used for Italy is also due to improvements gained in producing wood-based panels, composites, the automation process and performance of bioenergy and biochemicals) improving the Computer Numerical Control (CNC) ma- economic viability of forestry (Humerkoski chinery, as well as in advances in the gluing and Hetemäki 2017). process of wood-based products, which led to developing new engineered wood products. The introduction of new types of mechanical The case of Italy fasteners, especially self-drilling screws, have greatly enhanced the possibility of prefabrica- Developing timber construction in southern tion of structural components and has made Europe faces some specific challenges that are the construction process easier and faster. illustrated in analysing the Italian case. Italy has a long tradition of using wood for struc- Recently, important research projects, via both tural purposes in historical buildings, mainly full-scale tests on entire multi-storey buildings for roofs and floors in old masonry buildings and numerical investigations, have been con- and churches. Despite that, timber was little ducted in Italy on using wood for residential used in new construction in Italy until about construction, mainly focused on cross-lami- 10 years ago when ideas of sustainability and nated timber (X-Lam or CLT) technology. The eco-efficiency in building started to play a key seismic and fire performance of multi-storey role in the housing policies of most regional buildings were of great interest and were in- and municipal public organisations. In Italy vestigated via shaking table and fire tests of the building sector is responsible for 30 % of three- and seven-storey, full-scale buildings total energy consumption and 25 % of CO2 in Japan. Noteworthy are: the SOFIE Project emissions, therefore, it is easy to see why poli- (2005–2007) conducted by CNR-IVALSA Ita- cies aimed at encouraging energy efficiency ly, NIED, BRI and University of Shizuoka Japan and using technology and natural materials on the seismic performance of multi-storey in the construction sector are now necessary CLT buildings (Ceccotti and Follesa 2006) and

68 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions the SERIES Project (2010–2013) conducted by tral and northern countries of Europe, espe- the University of Trento, Italy, Graz Univer- cially Austria and Germany, which represents sity of Technology, Austria and University of a missed opportunity for greater economic, Minho, Portugal on the seismic performance social and environmental gains. Currently, of multi-storey CLT, log house and light frame Italy uses only a fraction of its native wood buildings (Tomasi and Piazza 2013). resources. Its total annual increment is esti- mated at 37 million m3 (INFC 2007). Its annual The excellent fire and seismic performance, harvest amount is estimated at approximately together with the great speed of construction 12 million m3 per year (MCPFE 2015) or one- due to an almost completely dry construction third of the annual increment. is the process, can explain the steady market gains, main use, representing about 60 % of national especially in constructing new residential and wood production. The remaining 40 % volume school buildings. An additional driver was is mainly used in the furniture sector and, in the construction of several pioneering multi- a smaller percentage, the construction sector. storey buildings ranging from four to nine These figures have remained stable over the stores in different Italian regions with differ- last few decades, despite increasing demand, ent levels of seismicity. The tallest buildings because of agricultural and forestry activities were erected in Milan, where four nine-storey, in many mountainous areas being gradually CLT residential buildings were built in 2012. abandoned. Wood plantations contribute 1 million m3 to the annual growth, and they cover 122 250 ha (INFC 2007), 70 % of which A wood-based sector depending on is represented by poplar. Poplar alone supplies imported resources almost 40 % of Italian wood-based products for the construction sector. Despite its relevance, Wood processing in the timber construction the number of plantations has reduced by 50 % and furniture sectors is performed by 77 000 since the 1970s due to low profitability for for- companies. Timber construction represents est owners, tighter environmental regulations around 43 000 small and very small com- and a lack of perception of positive externali- panies, spread almost uniformly throughout ties (Coaloa and Nervo 2011). the country, employing around 179 000 em- ployees (Federlegno 2008). Along with the Forests in Italy constitute a valuable resource pulp and paper industry and forestry activi- for the environment and the tourism industry, ties, the total number of employees is around providing many valuable services including 300 000, producing roughly 1 % of Italy’s GNP reducing landslide hazards, which are quite (MCPFE 2007). significant in many parts of the country. For- est resources have the potential to also be used Italian wood satisfies only around 20 % of total as valuable structural material for timber con- demand from the construction and furniture struction and the furniture industry. There is sectors (Berti et al. 2009), despite large forest much to be gained by with better integrated, resources. Most of the wood used for timber higher added-value supply chains. Using construction in Italy is imported from cen- wood could create a clear benefit in terms

European Forest Institute • 69 of local economies and employment, as well installed in Tuscany using some European and as an incentive to protect forested areas and, regional grants. In 2011, a two-storey public therefore, safeguard the local environment for building was constructed in Florence using future generations. the CLT panels made of locally-grown Doug- las fir produced in Tuscany. The whole pro- ject was completed in only three years (Borsi Developing local supply chains et al. 2011). In 2013 in Sardinia, a region with approximately 585 000 ha of forest covering Engineered wood products represent a new 24 % of the land area, the University of Sassari opportunity to use locally-grown timber in and involving the University of Cagliari and the construction sector. Cross laminated tim- the IVALSA Trees and Timber Institute com- ber (CLT or X-Lam) panels are particularly pleted a similar research project. Visual and suitable for this use. CLT are prefabricated machine grading rules for local maritime pine panels made by gluing cross layers of small wood were derived, and CLT panels made timber boards. CLT panels are structural ele- of maritime pine were produced and tested, ments that are strong and stiff and have good leading to a full mechanical characterisation overall dimensional stability (e.g. the don’t ex- of such panels (Trulli et al. 2017, Concu et al. pand or shrink due to changing temperature 2016, Fragiacomo et al. 2015). or humidity) and can be used for walls, floors and roofs in multi-storey buildings. Since de- These experiences show that although tech- fects are less critical compared to other wood- nically feasible, strong and firm support by based products such as glue-laminated timber the local public authorities and the national that require larger defect free pieces of wood, government is crucial to establishing a short lower-quality timber boards can also be used. procurement chain of timber in the Mediter- CLT is particularly suited for regions facing ranean basin that can be economically com- the Mediterranean basin, where trees might petitive with the stronger and more organised be smaller and the quality might be lower producers in Scandinavia, Austria and central compared to northern Europe. and eastern Europe. Within the framework of EU regulations, local and national authori- The short procurement chain of wood for ties should promote the use of locally-grown structural use has been tested in two differ- timber, with tangible benefits for the users ent Italian regions. In Tuscany, a region with complying with these guidelines. over 1 million ha of forests, a project started in 2009 that selected wood species best suited for structural purposes (locally-grown Doug- Opportunities for market development las fir). Next, the mechanical properties of the different timbers and timber boards was The construction sector suffers from inertia. researched and rules for visually grading lo- It is considered more risk-averse and path de- cally-grown Douglas fir were derived. In 2010, pendent than most other sectors due to exist- a pilot plant for producing CLT structural ing norms, expertise, large capital invested panels made with locally grown timber was in machinery and the large number of small

70 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions actors in the construction value chain. Nor- ings (e.g. energy efficiency, circularity) as mally, cost is the main differential factor in this would render timber construction cost- the market and this does not encourage radi- completive without dislodging other existing cal innovation. With the exception of north- technologies and materials. It would be useful ern Italy and some French regions, timber to share and expand existing experiences in construction has a very low market share in this respect. southern Europe. This means a weaker in- dustrial ecosystem and a generalised lack of • Attention must be paid to developing effi- perception of wood construction as a techni- cient supply chains, in some cases upgrading cally and economically credible alternative. the technological capacities of and Moreover, the contribution of the forest sec- in other cases facilitating investments in ad- tor to local communities and the economy is vanced EWPs. It might also be necessary to generally underestimated. The lack of well- actively search for potential private investors organised advocacy groups also means less and to encourage new partnerships to develop favourable regulations and awareness-raising saw mills and EWP manufacturing plants. activities. Consequently, in the short term, the market potential of wood construction in • Increased research and development and Europe by 2030 appears to be region-specific, innovation will be needed to link existing with greater potential in the Nordic countries, and new capacities to the use followed by central Europe, northern Italy and of local wood resources. Local wood species France and finally southern Europe (Hurme- and their products must be characterised. koski 2017). Its success will, however, greatly Southern European softwoods can perfectly depend upon green building regulations and fulfil the technical requirements for mod- public procurement policies. Linking the ern engineered wood products. While their woodworking industry to local resources is case can be relatively straightforward, more a priority in the Italian Bioeconomy Strategy challenging is the development of new prod- and makes sense for other countries that have ucts from Mediterranean native and planted significant wood-working capacities built hardwoods (e.g. Eucalyptus spp., Mediter- upon imported wood resources (e.g. Spain). ranean oaks, etc.). The successful cases of To overcome existing hurdles, decisive action poplar wood and cork can be inspirational. will be needed, especially in regions with the Advancing in this direction will help sawmills lowest timber construction levels. gain a better competitive position outside the low-cost commodity market segments that • The first step should be to create a level play- are currently dominant. ing field for construction markets, by remov- ing the unnecessary hurdles from national • Involve local communities with the aim of construction regulations. Although timber illustrating the progress and benefits achieved construction can be directly sustained (e.g. in the areas and regions where the availability stablishing mandatory targets), perhaps there of local wood could justify starting a short is more to be gained from a stricter environ- procurement chain of wood for structural mental performance regulation for build- purposes. Informing both public and pri-

European Forest Institute • 71 vate forest owners on how to generate profit material value chains from residues. Active through sustainable forest management is rural areas will be able to generate additional crucial. income in the tertiary sector through such things as natural tourism, and this can be an • Liaising with public authorities at different incentive to expand and protect forested areas. levels (local and regional councils, public Increased reliance on high added-value prod- housing authority, etc.) is also important for ucts can help secure the future of the wood- developing a common, multi-level strategy working industries. This will in turn benefit involving forestry management, production public and private forest owners securing of structural timber components, production markets for their timber and offering room of energy, promotion of timber as a structural for more profitable forest management. It can material in public buildings, etc. This strategy also represent an opportunity for private con- should be supported in existing tools such as struction companies, which can upgrade their the rural development plans and the smart expertise from traditional reinforced concrete specialisation strategies. and masonry to new sustainable timber sys- tems. Municipalities, public agencies for so- cial housing and other contractors will benefit Expected benefits from timber from the high sustainability of buildings, the construction speed of construction through an entirely dry process, increased safety on the building site The positive effects of developing a new way due to the prefabrication process and the ab- to build in towns and cities based on timber sence of wet components, and the structural resources will go well beyond the expected safety especially in earthquake prone regions. environmental gains. It can tangibly improve rural welfare, generate local revenues through timber production and develop energy or bio-

Box 4. Building with wood: A snapshot collective houses (+72% since 2014). In the large of southern European countries majority of the cases (84% of the turnover) wood is used as solid or laminated beams for struc- In southern Europe, wood construction has been tural purposes. Construction based on CLTs and growing over the last few decades, particularly other advance EWPs represents only 3% of total for individual houses and public buildings. In timber construction (Observatoire National de France, for example, 2016, almost 2000 compa- la Construction Bois 2017). The growing interest nies were involved in timber construction. They of architects and designers for engineered wood are generally small (60% have less than 10 work- products such as laminated timber (glue lam) and ers) and represent 3% of the residential building more recently CLT, has stimulated the emergence sector. Timber construction represents 9% of all of new markets, including the construction of individual houses (-7% since 2014) and 4% of all multi-storey buildings. The CLT technology has

72 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions also paved the way for using local tree species. wood, the Portuguese Corticeira Amorim, offers French production of CLTs is rather recent and digitally printed panels, different flooring solu- is linked to existing sawmills, or to a laminated tions and external coatings based on cork com- timber plant. SACBA in Aquitaine produces CLT posites that are marketed across the globe. There is from local maritime pine wood, as well as Nor- good potential for developing CLT and laminated way spruce and has promoted the association timber production in southern Europe. The ex- France-CLT, which gathers eight CLT manufac- istence of sawmills and laminated timber plants tures along with other agents in the construction is a good asset, and partnerships between these ecosystem. CLT is also produced in Spain and two industries should be encouraged. Experience Italy. The Basque company EGOIN (Spain) offers shows there is a need to increase the technological multi-story timber buildings and houses made capacities and service quality of sawmills, so they with the CLT and glue-lam the produce. In the can satisfy the more sophisticated demands of en- last decade, they have adapted products and pro- gineered wood producers. Also, it takes special ef- cesses to use locally sourced radiata pine wood, fort to overcome the reluctance of clients who are transitioning from central European and Nordic used to well-establish species (e.g. spruce CLTs). softwoods. XLAM Dolomiti is a European leader Using new forest resources such as chestnut or in CLT production and uses, wherever possible, eucalyptus could be envisaged in, for example, locally-sourced spruce to supply the active mar- mixed hardwood-softwood panels, but this re- kets in northern Italy. As happens elsewhere, few quires technological research and developments developments were made for using hardwoods in (pilot phase) before going to the industrial phase, structural solutions, but there are some interesting keeping in mind the necessary competitiveness, cases. The Spanish company Garnica plywood, for and thus the economic feasibility. example, has developed structural insulated pop- lar panels for the construction market. Beyond

3.3 The hidden potential from European forests at EUR 2.3 billion. This of non-wood forest products represents around 10 % of the value of round wood and is a very significant figure. Because Non-wood forest products are products of of the relatively weaker wood value chains, biological origin other than wood derived these NWFPs represent a larger share of forest from forests, other wooded lands and trees production in the Mediterranean region. The outside forests (e.g., forest fruits, mushrooms, relevance of NWFPs, however, goes beyond cork, pine nuts, acorns, chestnuts, resin, the direct economic value, as they are strongly medicinal herbs, essential oils, honey, etc.). connected to cultural heritage and territorial Although not always well known, they play identity. an important role in rural economies (FAO 2015). The latest report on theState of Eu- Mediterranean NWFPs include a large variety rope’s Forests (Forest Europe 2015) estimated of products from those used in mass markets the total value of NWFPs extracted annually (cork, chestnuts, resin), to specialties (wild

European Forest Institute • 73 mushrooms, truffles) and various products and environmentally acceptable products in for niche markets (e.g. P. P ine a seeds). Look- terms, for example, of animal care standards ing at their economic life cycle, and therefore and non-polluted sources of production. This to their market development, some are old, is the case of re-wilding game animals and declining products (spontaneous aromatic aromatic herbs or plants used in cosmetics. plants that tend to de domesticated). Wild The search for old products connected with still represent a relevant traditional knowledge in the use of forest source of genetic material for developing products is still present in many rural areas the pharmaceutical, chemical, cosmetic and in the Mediterranean region (chestnut , food industries. Others are new, emerging baskets made with willow branches, straw- products like new sap drinks or new (at least tree root - Arbutus unedo – or pipes, for the European market) edible plants and the manna drug from ash - Fraxinus ornus). insects. In addition, changing market condi- tions are re-opening opportunities for old, almost abandoned products, like resin and chestnut tannin. Some NWFPs are produced through dedicated forest management, albeit with a range of management intensities (e.g. 70% cork, resin, as well as chestnut and pine nuts 60% in certain regions), while others, generally 50% called wild forest products, are collected but 40% not actively managed. This is the case of many 30% mushrooms and berries, but also for some 20% honeys and medicinal or decorative plants. 10% Both types of NWFPS have significant po- 0% tential to contribute to the bioeconomy, even Central Eastern Atlantic Southern if they require very different approaches and Northern strategies. Source: Based in Prokofieva et al. 2017. In the case of wild forest products, two oppo- site trends are in place in the same time even Figure 11. Percentage of households engaged in NWFP for the same categories of products. There is a harvesting activity in 2015 in different European trend towards domestication, as in the case of regions. (Southern countries include France, Italy, berries and nuts. In many European countries Spain, Portugal, Greece and Turkey.) these products are taking advantage of the im- age of forest products, but they are cultivated like the most intensive farm products (straw- berries, hazelnuts, etc). There is also another interesting trend towards re-wilding, in search of products that are more natural, tasty, rich in some micro-elements and/or more socially

74 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions Leveraging the potential of wild NWFPs territorial marketing initiatives for branding a geographic area and networking its actors From the bioeconomy perspective, one main (e.g. the Strada del porcino, the Route del la and distinct role of wild NWFPs is their poten- châtaigne, etc.). Mycological tourism, show- tial to bring socio-economic wellbeing and a ing traceability of wild food from the forest to more balanced rural-urban relationship (Vid- the , mushrooms picking courses, ale and Petenella 2014). This potential should etc., are central to some nature-based tourism not be underestimated. A household survey on strategies. In these cases, the economic role wild NWFP consumption habits, which was of the NWFPs is more connected to social answered by close to 17 000 citizens in most of innovation, that is to coordinating all actors the EU28 and some neighbouring countries, under the same vison and rules to promote a found that over 90 % of Europeans consumed local development strategy. some type of wild forest product during 2015 (Lovric et al. 2017). More importantly, 35 % of • Build on the growing trend towards a greater rural and 22 % of urban respondents picked appreciation and use of locally-sourced, nat- or harvested products themselves during the ural, traditional and wild resources, as seen year, although with big regional differences, in the increased use of wild and traditional and with relatively more people picking the products in quality restaurants and health products themselves in Nordic and central foods, artisanal brewed beverages, jams and Europe and fewer in southern and Atlantic sweets, as well as natural cosmetics and natu- countries (see Figure 11). Over 70 % of these ral medicines. Short value chains and direct people who pick products go to the forest more sales of NWFP products can represent good than three times a year. opportunities for diversifying income sources and providing seasonal employment. The positive effects of forest outdoor activi- ties on human health are attracting increased These approaches are affecting the role of attention and could prove to have significant NWFP in rural development in terms of di- economic effects on healthcare savings. More- rect and indirect effects on income generation over, the data indicates strong potential for and are not only being used for personal con- wild, non-wood forest products to encourage sumption and a subsistence income. Linking nature-based tourism and generate income in NWFPs with tourism and short value chains rural areas, leveraging existing social trends. can greatly contribute to rural economies. According to Prokofieva et al. (2017), forest However, not all set-ups guarantee that the potential could be leveraged in the following value generated will be captured locally. ways: The NWFP economy faces constraints and • Build on experiential economy approaches structural limitations that need to be over- where consumers’ feelings are the essential come such as the previously noted issue of to the value. In marginal, inner, Mediterra- seasonality, which affects the availability of nean areas an indirect economic role is played particular NWFPs and limits opportunities when NWFP are used as iconic products in for specialization. The lack of a continuous

European Forest Institute • 75 flow of fresh products means it is impossible • In a context based on informal rules, with to reach a minimum, stable critical mass of frequent incidents of illegal behaviour, pro- products to place on the market. The problem fessional operators face problems consolidat- of a reduced amount of NWFPs is exacerbated ing their market position, investing in supply by the difficulties connected to the atomisa- chain organisation and modernising the sec- tion of supply and a frequent lack of vertical toral economy. and among the actors of the value chain. This is one of the reasons • Tracking the products from their origin to why many NWFPs are sold by individuals to where they are sold to the consumer is dif- middlemen. Collectors are normally price tak- ficult. When transactions are not transparent ers with little power over the market and they and property rights and fiscal regulations are are unable to take advantage of the potential not implemented, it is impossible to trace the for adding value along the value chain. NWFP products. This is an important constraint in property rights are often not designed to ac- trying to develop the market for some NWFPs, tively and easily promote commercial value especially in the case of food products. chains (e.g. in Greece and Turkey all NWFPs are owned by the state, while in many regions To improve supply chain arrangements, it is in Spain mushrooms can be collected for free). particularly important to regulate harvesting Small-scale activities frequently based on the rights and modalities, allowing for products to work of individuals picking the products are be traced (extremely important for edibles), associated with informal markets, i.e. markets avoiding unfair employment conditions, where transactions and actors are not regis- and balancing the rights of the local popu- tered, where tax evasion is a common practice, lation and hobbyist with the needs of more where minimum standards for product stor- professionalised operators. Although direct age and health standards are not considered producer-to-consumer approaches are always (e.g. fresh, wild mushroom in many Balkan possible, benefits will be achieved, in many countries). cases, with better cooperation among produc- ers and/or vertically along the value chains. In These quite common conditions have at least this respect, -based portals and social three direct negative effects: networks have become relevant as commer- cialisation channels and a great opportunity • The market is not transparent, statistics are for NWFPs. One example is a high-quality not kept or they are unreliable, public authori- brand for wild mushrooms developed in the ties tend to underestimate the economic and Spanish region of Castilla y Leon that inte- social role of the sector, the social perception grates interested agro-food operators, guar- of the importance of NWFPs is misunder- anteeing consumers the geographic origin, stood and, ultimately, the sector is kept in the sustainable picking, safety, and high visual margins in terms of decision makers’ initia- and culinary quality, while also establishing tives for defining regulations and providing economies of scale and joint marketing ef- incentives. forts. The brand builds upon a comprehensive effort that includes awareness and market-

76 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions ing campaigns, new picking regulations and a plications. In this way, residues from stopper network of ICT enabled mobile selling points production that were being burnt for energy, where people who have picked the products have found new and higher added-value appli- can sell their daily harvest with full web-based cations. In the sector of medicinal herb-based traceability and transparency10. products for health care the Italian company Aboca is the precursor and an international benchmark company with 1 100 employees, Leveraging the potential 77 natural herb species employed, more than of industrial NWFPs 3 000 different products put on the market. In recent years, Spain has reactivated the pro- The opportunities offered by non-wood for- duction of natural resins, replacing imported est products go well beyond niche markets, resins from China, to reach 15 000 tonnes per small-scale activities and heritage, especially year and contributing to new investments in when considering industrial products such as processing facilities. With over 800 000 ha cork, resin and other extracts. Southern Eu- of favourable pine forests, resin production rope hosts some global leaders in several mar- represents a significant opportunity for the kets. The Italian company SILVATEAM with post-oil era in southern Europe, even if the production facilities in Italy, China and Latin cost of labour is a major limitation in current America is a global leader in chestnut and market conditions. The French company DRT, other natural tannins for the industry with over 1 000 employees, began by process- and also produces wine additives, animal feed ing the once very important Aquitaine resin. and other industrial applications. Italian Veg- It still produces derivatives from natural and etable Tanned Leather is a quality brand for tall oil resins, but it has also expanded to in- the fashion and apparel industry, key for Ital- clude specialty extracts from pine bark, grape ian leather competitiveness in global markets, seeds and olive leaves, while supplying poly- that shows how the importance of NWFPs phenol- and phytosterol-based products to the go beyond their monetary value. The Portu- health, nutraceutical and cosmetic industry guese iconic company Corticeira Amorim is worldwide. Essential oils and natural extracts the global leader in cork products. Intensive are among the hidden treasures of the diverse investments in research and development southern forests, one that offers many oppor- have led to an extended portfolio of products tunities for new entrepreneurial adventures, that include bottle stoppers for all market seg- as shown by the Galician start-up Hifas da ments (including screwable cork stoppers!), Terra that develops innovative fungus extracts also innovative construction materials such as for oncological and other applications. In the digitally printed housing panels, waterproof case of well-established value chains (cork, and scratch resistant flooring, furniture sold resin) the ability to supply the raw-material at IKEA and other top-notch products such in quantity and quality is a limiting factor. It is, as advanced race-horse shoes and specialty of course, a multifaceted problem that might components for industrial or aerospace ap- require new sustainable intensification man- agement practices, new approaches to achieve

10 https://www.setasdecastillayleon.com profitability, combining for example NWFP

European Forest Institute • 77 production with wood and other goods or ser- Considering the potential and the problems vices supported with Payments for Ecosystem this branch of the Mediterranean forestry sec- Service type of schemes (e.g. as in dehesas or tor, it’s clear that the high internal demand montados) and might require managerial or and the EU’s strong position on international social innovations to improve the value chains markets for several NWFPs represent a sig- efficiency and equitability. In addition, realis- nificant opportunity for the Mediterranean ing the potential for new products and busi- bioeconomy and offers a chance to enhance ness models will require sustained efforts in internal NWFP supply supporting income research and development, increased entre- generation in rural areas. While it is unre- preneurial skills and improved access to ven- alistic to cover the internal EU demand for ture capital for bioeconomy start-ups. all NWFPs from European forests, enhancing production of NWFPs could be a key aspect of future forest policies to reduce dependency Concluding remarks on international trade and re-establish eco- nomic between largely urban NWFP When compared with wood products, NWFPs, consumers and producers located in remote as a branch of the Mediterranean forest econo- rural areas. my, are underestimated and consequently are underused and underfinanced. Still in many contexts NWFP are secondary forest prod- ucts, for which the Kielwasser or Wake Theory, is considered a guiding principle in forest management. This assumes that sustainable production of wood is the primary objective of sustainable management, as it guarantees at the same time all other functions, goods and services (Rupf 1960). Few forest managers realise that in oak forests the annual produc- tion of some hectograms of white truffles per hectare can potentially generate much more income than wood production and that forest management practices could be adapted to optimise growing truffles growing rather than focusing on the annual increment of wood (Barreda 2011, Reyna and Pérez-badia 2015). Similarly, silvicultura treatments in Mediter- ranean pines can be optimised for producing mushrooms or pine honeydew, which have great potential to increase economic and/or social outcomes (de Miguel et al. 2014a, de Miguel et al. 2014b).

78 • Chapter 3. Potential contribution of forests to a circular bioeconomy in key sectors and different regions 4. Unleashing the potential for the forest-based bioeconomy in southern Europe

As shown in previous sections, the forest bio- has extracted lessons learnt from different ini- economy must create prosperity and wellbeing tiatives and projects across the continent11. while, at the same time, reduce environmental This report emphasises the need to overcome footprints. It has significant potential in south- fragmented ownerships (section 4.4), as this is ern Europe where it benefits from important a critical hurdle not only for wood mobilisa- social and economic drivers. It will require tion but also for climate change adaptation, technological, social and policy innovations forest fire prevention and for providing other to develope new value chains based on forest ecosystem services. goods and forest services (section 4.1) and a strong sustainability framework (section 4.2) to protect and increase the natural capital, 4.1 Creating innovative bio-based with a specific focus on climate change adap- products and services tation and mitigation (section 4.3). The bio- economy can create a strong market pull for The European Forest Institute(Hetemäki et forest goods and services. This demand must al. 2017) has identified the required frame- be matched by adequate supply, though active work conditions that will make it possible to management at the landscape level to create develop the potential of bio-based products resilient and thriving landscapes, balancing and services. These can be summarised as: the provision of multiple ecosystem services (e.g. wood, water, non-wood forest products, • Strong sustainability schemas. There are pasture). Many southern regions have low for- multiple pathways to develop the bioecono- est management activity, weak forest value my, and not all have the same sustainability chains and most of them lack organisational potential. As it relies on biological systems, structures capable of overcoming the struc- the bioeconomy must be sustainable. tural fragmentation of forest ownership. A 11 Orazio,C.; U Kies and D. Edwards (2017) Wood mobilisation in recent work has identified the most relevant Europe. European Forests Institute. 116 pp ISBN number: 978- barriers for wood mobilisation in Europe and 2-9519296-4-9

European Forest Institute • 79 • Engaged societies. Developing shared visons of the BioTIC project (Bio-TIC 2015) 12 has of sustainable, desirable and plausible futures identified the main barriers for deploying in through scientifically informed societal de- industrial biotechnologies in Europe: bate is a possible way forward. • markets barriers, such as the lack of public • Knowledge, innovation and skills. Create awareness and unclear product standards; circular bio-based products and services. Re- • biomass supply barriers, such us, high and search, development and innovation should volatile costs, fluctuation in quality and price, not be restricted to technologies, as social, unsecure supply and competition from fre- managerial and policy innovations are also quently subsidised energy uses; and crucial for the circular bioeconomy. In addi- • technological barriers, which can be very tion, new ways to teach and train are needed as process specific. existing skills do not match the requirements of the bioeconomy. In France, Italy and Spain, barriers related to public awareness, access to finance for pilots • Risk-taking capacity. It is essential to facili- and upscaling and difficulties establishing tate investments in pioneering but possibly partnerships along bioeconomy value chains risky initiatives. This can be achieved creat- and across sectors are highlighted. ing markets for innovative bio-products (e.g. through public procurement) and increasing To overcome those barriers they propose 10 the public-private and private-private coop- key areas for action, related to securing bio- eration, also between global companies and mass supply (1), innovating in products and small and medium-size enterprises. process of available biomass (2, 8), facilitating cross-sectoral connections (7–10), increasing • A common and stable regulatory frame- research capacities, skills and upscaling of work. This could speed up development of the technological solutions (2, 3, 6), developing circular bioeconomy for bio-based products a favourable policy environment and access and services, reducing the risks for business to finance (4, 9) and engaging society (5). and consumers and assuring sustainability. Biomass comes from the land and the sea and 1. improving opportunities for feedstock pro- its production has many social and environ- ducers within the bioeconomy; mental implications. 2. investigating the scope for using novel bio- mass; Developing this framework will require strong 3. developing a workforce that can maintain private-public collaboration and strong gov- Europe’s competitiveness in industrial bio- ernment-to-government collaboration at technology; multiple levels (e.g. cities, regions, member 4. introducing a long-term, stable and trans- states and the EU). 12 They refer specifically to the Industrial biotechnology under- stood as the thermo-chemical and biological transformation of At a more operational scale, Europabio (Du- biomass. It is a central element of the bioeconomy, even if it does not include solid uses of wood or cork or other biomaterials such pont-Inglis and Borg 2018) in the framework as cotton or flax, nature-based tourism or other services.

80 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe parent policy and incentive framework to tion capacities and strong specific cleantech promote the bioeconomy; innovation drivers because of favourable 5. improving public perception and awareness policy environments (regulation) and rela- of industrial biotechnology and bio-based tively high public investments in clean tech products; research and development. Access to early 6. identifying, leveraging and building upon stage venture capital and green bonds help EU capabilities for pilot and demonstration France perform much better than Italy, where facilities; the lack of start-up funding is a major impedi- 7. promoting the use of co-products from ment. Spain and Portugal can be placed in a processing; second group. They have significantly weaker 8. improving bioconversion and downstream research and development investments and processing steps; weaker overall innovation capacity. However, 9. improving access to financing for large- they rank much worse on the policy envi- scale biorefinery projects; and ronment, which explains their low scores. In 10. developing stronger relationships between those sectors with more favourable regula- conventional and non-conventional players. tion (wind energy in Spain, for example), deployment of clean technologies has been Analysing the innovation environment for significant. Finally, Greece performs below the bioeconomy in southern Europe is be- average in all index areas and notably in gen- yond the scope of this report. Overall inno- eral innovation drivers, specifically clean tech vation capacity is analysed in the European innovation drivers and early stage business Innovation Scoreboard (European Commis- opportunities. The case of Turkey is interest- sion 2017). For the specific bioeconomy in- ing, as it scores better than average on overall novation environment, the performance of innovation capacity but fails in specific drivers southern countries in the Global Cleantech for clean tech. Innovation Index provides important insight, as the bioeconomy makes a relevant share of Table 11. Clean technology Innovation profiles of the clean technology sector, with some 33 % southern European countries, summarised from the of the 2018 Global Cleantech 10013 companies Global Clean-tech Innovation Index (GCII). Ranking using biomass as feedstock or providing solu- refers to the position among the 40 countries analysed tions for biomass processing. in the GCII. The index has four components. General innovation drivers; Specific innovation drivers refers Table 11 summarises several Global Clean- to the policy environment, cluster activity and access tech2017 country profiles (Clean Tech Group to finance; Emerging cleanTech refers to early stage and WWF 2017). Overall, southern countries investments, patents, high impact start-ups, etc.; and performed lower than Nordic or central Eu- Commercialised Cleantech refers to the size current ropean countries and, also, lower than other markets (imports, exports, employment, etc.). OECD countries. Countries like Italy and France have above average general innova-

13 https://i3connect.com/gct100/the-list

European Forest Institute • 81 Table 11.

Ranking General Innovation Specific Innovation Emerging cleantech Commercialised cleantech France scores around the mean in general innovation drivers, even if quite low for 13 perceived entrepreneurial opportunities and early-stage business activity. It scores, slightly higher than the mean in specific clean tech innovation drivers due to the policy environment and higher investments in research and development. Emerging cleantech in France is strong, backed by the high availability of early-stage venture capital in the sector and the recent issuing of EUR 7.5 billion in green bonds. Renew- able energy consumption and clean tech imports and exports are relatively low and that explains the low clean tech commercialisation score.

Greece scores well below the mean on general innovation drivers and very low 34 in perceived entrepreneurial opportunities and early-stage business activity. The unattractiveness for renewable energy investments and low clean tech research and development expenditure (even if larger than Bulgaria or Romania) hinders specific drivers. Emerging clean tech is low.. Venture capital investment and patent activity also rank low. Commercialised clean tech in Greece suffers from an underdeveloped investment environment and reduced clean tech business activities (mergers, acquisi- tions, IPOs, etc.).

Italy’s score for the Global Innovation Index is quite low. It scores slightly above the 26 average in specific-cleantech divers despite a friendly policy environment, due to an underdeveloped early-investment landscape. It takes last place for early-stage entrepreneurship. Emerging clean tech is quite low, mainly due to low venture capital investment. Italy leads other southern European countries in clean tech .

Portugal scores below average in general innovation drivers due to a weak entre- 27 preneurial culture innovation ecosystem. However, it scores above average in clean tech supporting policies and cluster activity. It has relatively low public research and development investments and lacks access to start-up finance. This explains why emerging clean tech innovation is the weakest pillar. Commercial clean tech activity (e.g. clean tech commodity trade) is low, except for consumption of and employment in renewable energies. Portugal’s overall performance lies well below the average for all the European countries analysed.

Slovenia scores below the global-average in general innovation drivers, clean tech 21 specific drivers and emerging clean tech. It has great potential to improve its innova- tion ecosystem and embedded national entrepreneurial culture. It has a top score for clean tech cluster development and supportive government policies. Strengtheners that are overrun by a total lack of start-up access to private finance and low invest- ment attractiveness for renewable energies. This translates to low emerging clean tech, with a particular weakness, again, in the lack of early-stage financing. Despite these weaknesses, Slovenia manages to score 16th place in commercialised innovation, with strong clean tech commodity exports and imports.

Spain Scores below average (also below Portugal) in general and specific clean tech 25 innovation drivers. Particular weaknesses are: lack of a clean tech-supportive policy environment, and low research and development expenditure on clean tech, espe- cially compared to other European nations. Emerging clean tech is low, due to the low number of clean tech start-ups and environmental patents. Spain does better in com- mercialised cleantech. It shows evidence of late stage private equity deals, successful public clean tech companies, strong exports of clean tech commodities and above average use of renewable energy.

Turkey’s clear strength lies within general innovation drivers, scoring high in entre- 33 preneurial culture indicators and giving evidence of an active early-stage innovation ecosystem. It performs much weaker in clean tech-specific drivers because of the lack of supportive policy environment, reduced access to private finance and weak cluster organisation. Consequently, it has one of the lowest scores in emerging clean tech. While still well under the global average, it shows some evidence for commercialised clean tech due to clean tech commodity imports and above-average use of renewable energy.

Source: Cleantech Group and WWF 2017

82 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe In summary, improving entrepreneurial cul- process standards, etc.) seems to be of special ture, risk taking capacity and access to ear- urgency in countries like Greece, Portugal, ly-stage and late stage finance are common Spain or Turkey. challenges in southern Europe, along with societal awareness and engagement. These Cross sectoral links and public private part- barriers must be overcome to strengthen the nerships will also be necessary to develop and innovation systems and the academ- scale-up placed-based approaches to realise ia-business divide. Entrepreneurial skills can the potential of non-wood products and the be introduced in the life science and biotech soft values of forests and forested landscapes curricula along with improved access to early (e.g. linking ecotourism and health, water stage funding. Support to pilot plants and up- provision with fire prevention, developing scaling is necessary. Making new businesses synergies between wood and non-wood for- creating on current side streams a priority, est products, etc.). Greater emphasis on so- existing industries can help overcome limita- cio-economic research and social innovation tions in the biomass supply, while also helping might be required in addition to technological to strengthen, rather than to compete with, innovations. Finally, the social economic sec- traditional bioeconomy enterprises. This can tor can make significant contributions. be achieved through more systematic business discovery processes and by promoting cross- sectoral interactions and partnerships be- 4.2 The bioeconomy needs to be tween established companies and innovative sustainable start-ups to create new industrial ecosystems. The World Economic Forum (2016a) also The bioeconomy relies on natural resources stresses the need for increased cross-sectoral for energy, material production, nature-based collaboration and public-private partnerships solutions and green infrastructure. For the in order to advance towards climate friendly bioeconomy to succeed, nature, the environ- industrial systems. In addition, distributed ment, must be at the core of the economic pre-processing to aggregate biomass and a development model, supporting the economy priority on value over volume, reducing the and human wellbeing. This is implicit in the needs for economies of scale are possible ways motto of the French bioeconomy strategy, forwards (Bio-TIC 2015). Attention must also which placing photosynthesis at the core of be paid to improved collaboration and ben- the economy, and also in the Italian strategy, efit sharing along the biomass value chains which speaks of a unique opportunity to re- to guarantee the long-term engagement of connect the economy with society and the producers. environment (see section 2.1). For this to be possible scientists call for a nested, strong On the other hand, an improved policy frame- approach to sustainability recognising that work to facilitate access to markets, de-risk nature and the environment are the basis for investments and secure sustainability and economic development and social wellbeing. societal support (e.g. green public procure- Natural capital cannot be traded-off for hu- ment, environmental taxation, product and man constructed capital as both are comple-

European Forest Institute • 83 mentary and synergic. This departs from weak What are the sustainability risks sustainability that sees social, economic and and opportunities of the bioeconomy environmental elements as independent pil- for southern Europe? lars. Accepting trade-offs between natural cap- ital and economic development makes sense The bioeconomy holds a promise to sustain in a fossil-based economy, where economic wealth creation while reducing or reversing cur- growth is mainly fuelled by non-renewable rent environmental effects. Positive effects are fossil resources and materials accumulated related to the environment (e.g. climate change during millions of years of the Earth’s history. mitigation, reduced use of materials and waste) It certainly makes less sense in an economic and wellbeing (e.g. increased energy security, paradigm that depends on the capacity of na- employment, rural livelihoods and economic ture to provide goods and services. The bio- growth), as can be read, for example, in the economy must identify and realise synergies drivers for bioeconomy strategies. This im- between environmental protection and hu- proved environmental performance requires man development. A worst-case scenario for reduced material intensity and reduced carbon, the European Mediterranean region emerges water and other ecological footprints or, more precisely from accepting excessive trade-offs in general, maximising the ratio between the between economic development and environ- benefits and the impacts derived from every mental sustainability, in a context of climate unit of resource used (Sfez et al. 2017). change (World Economic Forum 2011).

STRONG WEAK SUSTAINABILITY SUSTAINABILITY

Environment Environment

Society

Economy Economy Society

Figure 12. Strong vs weak sustainability approaches.

84 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe There is a generally positive attitude towards cially if collection and recycling rates are not the potential of science, technology and indus- radically improved. Other bio-plastics such try to create new, more sustainable products as Polylactic acid (PLA) bioplastics are biode- from biomass (Pfau et al. 2014). It is acknowl- gradable and are more promising, although edged that, generally, bio-based products have they do not fit all applications. Reducing plastic clear advantages over those based on fossil use through changes in consumer behaviour fuels and non-renewable materials. They and improving circularity will need to work tend to have reduced carbon footprints and in parallel with developing a new generation are usually less toxic and more biodegradable, of bio-based biodegradable plastics (World which make it easier to re-use, recycle and Economic Forum 2016). The textile sector, dispose of them. In their analysis of current dominated by fossil-based materials, is also wood flows in Switzerland and using a Live a relevant source of waste and pollution. As Cycle approach, Suter, Steubing and Hellweg bio-textiles gain traction, their environmental (2017) found an average positive impact of 0.5 performance is increasingly being examined. tonnes of carbon dioxide equivalent per cubic Some bio-based textiles can have high water metre of wood used to replace other materials, footprints (e.g. cotton), require toxic chemicals but with large differences for different uses. in their production (e.g. traditional viscose), This is in line with research findings done in or use toxic elements in tinctures, imprints other countries with a variety of methodo- and/or functional additives (e.g. alkyl phe- logical approaches (see Sathre and O’Connor nols, phthalates, etc.), creating negative envi- 2010, for a literature review). In general terms, ronmental impacts and also making them less the substitution effects are bigger when solid recyclable (Shen et al. 2010). In a recent LCA materials are used to replace high embedded analysis conducted by SCS Global Services14, energy materials such as concrete or steel, and it was concluded that the environmental per- when combined with bioenergy use at the end formance of a cellulose based bio-textile will of the product life cycle. heavily depend on the source of biomass and the production process along complex global Bio-plastics and bio-textiles that can replace value chains. For example, viscose produced their fossil-based counterparts are gaining from recycled clothing has a much better per- traction and can contribute to reducing carbon formance than average Asian production based footprints, marine litter, hyper-accumulation on European or Canadian boreal forest pulp or of waste and pollution. Research shows that Indonesian rainforest pulp. New technologies they hold great potential, but also that they are improving the environmental performance are not the panacea (World Economic Forum of cellulose-based textiles, reducing water foot- 2016). Among the bioplastics that can directly prints and the need for toxic chemicals and in- substitute for plastic, for example, bio-ethanol creasing recyclability (e.g. Lyocell, Spinnova). based polyethylene terephthalate (PET) can The take-home message is that assuring sus- be used to replace current plastic bottles. Al- tainability goes beyond the bio-based origin though PET is durable and recyclable, it is not biodegradable. For this reason, PET will have 14 https://www.scsglobalservices.com/new-study-reveals-light- er-environmental-footprint-for-fibers-sourced-from-flax-and- a limited positive environmental effect, espe- recycled-clothing

European Forest Institute • 85 of products. Lignocellulose-based textiles can central and Nordic Europe) the debate about greatly contribute to a new textile economy, if land-use impacts in forestry is dominated by circular economy principles are applied from two contrasting approaches to sustainable cradle to cradle. In this process, well-designed land management, called land sparing and LCAs should track environmental and social land sharing (Phalan et al. 2011). According impacts in globalised value chains. to the land-sparing approach, productive ar- eas are segregated from conservation areas. Greater concerns, even sceptical views, arise Part of the land is set aside for conservation, in relation to the capacity to sustainably sup- while the rest is dedicated to intensive for- ply increased demands of biomass (Pfau et al. est production (e.g. industrial plantations). 2014, Robledo-Abad et al. 2017), and have to The land-sharing approach advocates for do with the potential negative effects on the multifunctional management of all forests, natural capital and the social fabric of bio- modulating management intensity through, mass producing regions and communities. for example, close-to-nature and retention They can be summarised as: forestry (Gustafsson et al. 2012), in order to supply multiple ecosystem services along with • Risks associated with intensification. Breed- wood and non-wood products. ing, fertilisation and improved forestry prac- tices can significantly increase productivity • Risks associated with social exclusion and re- but can also have negative effects (e.g. biodi- source grabbing. The larger proportion of EU versity, soil or water quality). In some cases, forests are owned by families, ­municipalities when forest governance is weak, increased and governments, so there is a large social demand for biomass can lead to resource de- base supporting the forest bioeconomy. Nev- pletion (e.g. overharvesting, illegal logging, ertheless, unequal participation in the value etc.) or to unsustainable practices (e.g. soil chains and unequal sharing of the nuances degradation). This in turn can affect prima- and benefits of bioeconomic activities are still ry productivity, creating a negative feedback relevant issues. Effective public participation loop, and affect other components of the eco- at local, regional and national levels and main- system (e.g. carbon balance, water quality). taining the local control of natural resources are seen as a necessary condition for mitigat- • Risks associated with land-use change. Most, ing these risks. At the global level, the risk of if not all, EU bioeconomy strategies embrace land grabbing, displacement of small-scale the principle of food-first. It places the fo- farmers, deterioration of food security lead- cus of the bioeconomy on non-food biomass ing to rural poverty and increased inequalities (e.g. agro-food waste streams and forestry). remain a significant concern. Nevertheless, EU imports of biomass could still increase competition for land-use in third In relation to these risks FSC and PEFC countries. Increased demand of biomass can schemes are quite active in many southern also lead to conflicts between nature protec- european countries. Moreover, through par- tion and biomass production. In regions with ticipatory processes (not very frequent in a high utilisation rate of forest resources (e.g. the Region) they have developed country or

86 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe regional certification schemes suited, to the Different land uses provide direct sets of eco- much diversified local conditions. Standards system services that must also be balanced at have been developed also for some NWFP the landscape level. In this respect, there is and FSC is now testing new indicators for increasing scientific evidence that a consider- the certification of the sustainable supply of able amount of land, globally and regionally, ecosystem services, using also Mediterranean needs to have a predominantly unmanaged case study areas. status, ensuring biodiversity conservation, e.g. space for conservation and evolution of the crop’s wild relatives, which is essential for the How can the bioeconomy live up to its bioeconomy (Lefèvre et al. 2014), and global sustainability expectations? ecosystem services like climate stabilisation and rainfall recycling over land (Ellison et al. A first essential element of the sustainable bio- 2017). Set-aside policies can constrain the economy derives from its intimate dependence biomass supply. In a sustainable bioeconomy, on the Earth’s natural capital and its ecosystem this is not to be considered lost land as it con- services. Researchers (Costanza et al. 2014) tributes highly to the Earth’s resilience to the have estimated the value of global ecosys- benefit of all. These areas can provide also -lo tem services as USD 125 trillion (in 2011), cal economic benefits as through nature based with a loss of between USD 4.3 trillion and tourism. In fact, the value of these benefits USD 20.2 trillion per year between 1997 and can exceed that of biomass in many regions 2011, equivalent to some 6 % to 27 % of global (Croitoru 2007). Also, set-aside policies can GDP. These figures, no matter how big, under- be combined with intensive management in estimate the relevance of ecosystem services other areas, securing efficient biomass supply. the same way that the value of agriculture for Forestry in many Atlantic regions is close to human wellbeing goes far beyond its generally this approach, as production is concentrated low contribution to the GDP. They are mainly in planted areas, while semi-natural forests useful to raise awareness and to better guide sustain much lower management intensities political and economic action. An essential and productions. There are, however, concerns element of the bioeconomy must be to monitor on the sustainability of these large, planted and account for natural capital and ecosys- monocultures for a number of reasons (e.g. tems services and to set up policies to avoid higher incidence of pest outbreaks, more vul- unwanted market externalities, also creating nerability to climate stress), and also concerns the appropriate economic drivers needed to about soil degradation in forestry operations support sustainable value chains. and, also, negative societal perceptions (Valero et al. 2014). In addition, protected areas could A second element is the landscape/territorial prove to be too small to halt biodiversity loss, if approach. The bioeconomy needs certain di- not surrounded by suitable land uses (DeFries mension and economies of scale. Direct farm- et al. 2007). Increasing the multi-functionality er-to-market approaches have shown their of planted and other managed forests through, limitations even for high-value agricultural especially in ecological corridors, connecting products. A territorial dimension is needed. conservation areas, can contribute to greater

European Forest Institute • 87 system stability. In contrast, in Mediterra- the whole life cycle of products and services, nean regions, land abandonment and low from resource extraction over the produc- management intensities are leading to rapid tion process to the use phase, and eventu- forest expansion and biomass gains. This has ally the multiple re-use of recycled resources positive consequences for soils, climate change in new products. At the end of life, waste is mitigation and forest dependent biodiversity. minimised through energy use and recupera- However, forest continuity and biomass ac- tion of ashes as a fertilizer, for example, or as cumulation increases the risks of catastrophic building material. Unavoidable waste can be fires, also heavily affecting protected areas dealt with through phytoremediation further (San-Miguel-Ayanz et al. 2012), it represents closing nutrient cycles. Life-cycle thinking a threat for species depending on open spaces can be mainstreamed by policies stimulating (Ostermann 1998, Plieninger et al. 2006) and industrial symbiosis, giving value to waste, can also have an effect on available water due and putting a high price or ban on disposal. to the higher evapotranspiration (del Campo Well-designed Life Cycle Assessment (LCA) et al. 2017). Increased management intensity eco-design and environmental screening of seeking multifunctional and resilient land- new products and business models at the scapes can make an important contribution design phase become essential tools for the to the sustainability of Mediterranean forests. bioeconomy. There is a wealth of knowledge, from research and experience, that must be Overall, southern Europe has a fantastic op- incorporated into the bioeconomy, reducing portunity to combine set-aside strategies with material intensity through resource efficien- different intensities of forest management, cy, higher product longevity , hierarchy of including agroforestry systems and open uses of biomass (e.g. material uses vs. energy areas. There are many potential synergies uses), biomass partitioning (e.g. optimal use between reduced fire risk, increasing water for each biomass fraction), cascade use (se- flows, reduced hydric stress, biodiversity pro- quential recycling for material uses before fi- tection and the creation of wealth and rural nal energy use and disposal) (Brunet-Navarro livelihoods. The bioeconomy can provide the et al. 2016) and use of waste streams (e.g. side economic engine to activate sustainable man- products of one process as inputs of another agement (Corton et al. 2013). Knowledge on process) in industrial symbiosis and also fire behaviour, forest dynamics, tree physiol- through new business models linked to the ogy and the functional role of biodiversity sharing, performance and platform econo- needs time and focus to further develop from mies (see Table 2 in the introduction). fundamental research to viable land manage- ment systems (Liang et al. 2016, van der Plas A fourth key element of the sustainable bioec- et al. 2016, van der Plas et al. 2017). onomy is the need to address both production and consumption patterns. As an example, A third critical element of a sustainable bio- one of the reasons for increased water and economy is circular economy thinking. Posi- energy footprints in the region is the shift tive environmental and social impacts (e.g. away from the more sustainable and healthy employment) should be maximised along Mediterranean diet as increased consump-

88 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe tion of meat and dairy products replace olive ing society from the current consumption oil, unrefined and (Global and production patterns requires a positive Foot Print Network 2015), increasing obesity engaging narrative (EFI 2017). Society needs (Papandreau et al. 2008)15. A general concern to visualise sustainable and desirable futures, comes from the fact that expected environ- because negative messages will not function. mental gains (e.g. resource efficiency, waste Costanza (2014) proposes participatory sce- reduction, carbon emissions, etc.) can be re- nario planning at multiple scales as a tool duced and even reversed by a concomitant to develop common desirable futures across increase in consumption rates as the current societal groups. dominant consumerist world view maximises growth of the economy (GDP) as the primary In summary, the main sustainability issues path for solving societal challenges (Constan- of the forest-based bioeconomy are related za et al. 2014). This is known as the rebound to sustainable production, biodiversity, con- effect (Brookes 1990) that was formulated for servation, social justice and equity. Its main energy efficiency but that can also be applied sustainability benefits are bio-production, to material efficiency. This needs to be address climate mitigation and water management. with economy-wide measures. Overarching There are plenty of opportunities to find syn- targets to reduce material, water and car- ergies between them. How these are identified bon intensities must guide the bioeconomy and given value, monitored and steered will along with developing bio-based sectors. This be key for a successful bioeconomy. They will will require strong societal engagement and require a combination of improved manage- shifting the focus from economic growth to ment of natural resources (at multiple scales, human wellbeing (UNU-IHDP and UNEP from the genome to the landscape) and a 2014)16. Activating societal change will re- strong focus on maximising environmental quire acting on multiple levels of the social- and social benefits produced per unit of bio- ecological system, from changing mindsets mass used or hectare of land managed (Sfez (visions, values) to developing new rules et al. 2017), with an increasing reliance on (standards, incentives, punishments, con- natural-based solutions. This, in turn, will be straints) and adjusting economic parameters based on technological, managerial and social (i.e. taxes, subsidies) and also unleashing the innovations for efficient transformation, use, creative potential of people (Meadows 2010). re-use, for sharing, recycling and disposing of The role of mind-sets in shaping human ac- biomass and bio-based products and creating tion cannot be easily overestimated, as mental wealth from the ecosystem services and soft models and images directly influence human values of forests. behaviour (Smajgl and Ward 2013). Unlock-

15 Papandreou, C., Mourad, T.A., Jildeh, C., Abdeen, Z., Philalithis, A. and Tzanakis, N. 2008. Obesity in the Mediterranean region (1997–2007): a systematic review. Obesity Reviews, 9: 389–399. doi: 10.1111/j.1467-789X.2007.00466.x 16 UNU-IHDP and UNEP. 2014. Inclusive Wealth Report 2014. Measuring Progress toward Sustainability. Cambridge University Press, Cambridge.

European Forest Institute • 89 4.3 Adapting to and mitigating bioeconomy. The latter could bring support climate change to adaptation and depend- ing on climate change and socio-economic Adaptation is necessary and requires scenarios. The quantitative assessment of this economic support support is beyond the scope of this report.

Climate change is particularly challenging for the forests in southern Europe that are How adaptation strategies and the bio- already experiencing harsh conditions. Dif- economy can support each other ferent climate scenarios in this region predict increased summer temperatures and reduced Adaptation of Mediterranean Forests to cli- annual precipitation (Jacob et al. 2014), lead- mate change can be operationalised through ing to severe heat shocks and drought events, three objectives: further leading to increased hydric stress, greater potential susceptibility so some pests • attenuation of risk and diseases and forest dieback. In addition, • increased resilience favourable conditions for catastrophic fires • support for restoration will extend both temporally (i.e. extended fire season) and spatially, reaching new areas to Table 12 summarises management measures the north and east. to address these objectives as proposed by Bi- rot et al. (2011). Forest policy makers and managers need to be proactive and reactive in facing these challenges. Anticipatory adaptive strategies are aimed at reducing the risks, to increasing Table 12. Tentative list of specific measures to adapt forest resistance and resilience, to fostering or restore forests in the context of climate change forest adaptation, and to preserving multi- beyond normal practices and materials potentially ple options to cope with huge uncertainties provisioned for bioeconomy sectors in future scenarios. Nevertheless, precaution and prevention strategies will not prevent all catastrophes and, in many cases, healing and restoration measures will be needed. Proac- tive and reactive measures have a cost (e.g. thinning too dense forests, increasing agro- forestry practices, changing species compo- sition, converting coppices to high forests, regenerating ageing unstable forests,...); they also produce different types of products that could feed the bioeconomy. Here, we question the potential qualitative match between the products of adaptive practices and the circular

90 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe Objective Measure Material produced Frequency per site

Fire prevention Fuel breaks and wildland Large and small , Once, scheduled urban interface (WUI): logs, fire wood, wood establishment scraps, wood waste, green waste

Fuel breaks and wildland wood chips, wood waste, every 2 to 4 urban interface (WUI): green waste years, depending Maintenance on site produc- tivity

Open areas and agroforestry Large and small lumber, Once, scheduled schemes: Establishment logs, fire wood, wood scraps, wood waste, green waste

Open areas and agroforestry Pasture, livestock, small Nested cycles, schemes: Maintenance logs, fire wood, NWFPs depending (aromatic plants...), crops product and on products and site productivity

Drought Additional thinning to Small lumber, logs, fuel Every 15 to 25 tolerance reduce Leaf Area Index. wood years, depending Conversion of coppice to on tree species high forests. Change is age and site quality structure

Attenuation Shorter rotation Large and small lumber Once, scheduled, of risks less than every 50 years, gener- ally

Restoration Post-fire salvage logging Burnt logs, fuel wood Occasional, (woodchips), wood scraps unscheduled (particle boards), wood waste

Clearing after storm Logs, fuel wood (wood- Occasional, chips), wood scraps, wood unscheduled waste

Clearing after mortality Fuel wood (woodchips), Occasional, events (dead trees) wood scraps, wood waste unscheduled

Sanitary clearing (infested Wood scraps, wood waste Occasional, trees) unscheduled

In the erosion-prone climate and orography in post-fire restoration activities, must be a that is predominant in southern Europe, soil clear priority. In addition, provenances better organic matter and soil physical structure adapted to future climates can be gradually in- play a central role in soil resilience, produc- troduced in existing stands, facilitating what tivity and water reserve. Protecting soil condi- could be a natural, but slower, migration of tion, especially during forest operations and genes and species. Eventually, species shifts

European Forest Institute • 91 can be facilitated in semi-natural forests or ity and dimensions than timber with certain directly established in plantation forestry. dimensions and mechanical properties. Other This, however, could require a mental shift, types of materials (e.g. composites) and uses since regeneration and restoration with lo- of solid wood (e.g. wood-based panels) can cal genetic material is generally advised now benefit from lower quality, raw material. At when not explicitly enforced with regulation. the extreme, bioenergy could potentially use A common argument is that promoting mixed all types of biomass qualities from harvest stands can reduced the risk of dieback due to residue to shrubs and lignocellulosic mix- environmental conditions, pest and diseases. tures all the way to post-consumer wood. It Radical changes in forest composition (e.g. is important, therefore, to develop a product species shifts) or conversion to new forest sys- mix (and downstream value chains) that can tems, could have complex and indirect effects secure the profitability of biomass extraction. on sustainability and markets and should be The viability of biomass as feedstock and raw carefully considered, including by evaluating material depends heavily on the amount pro- the adaptation capacity of existing popula- duced and on the cost of extraction and trans- tions. At the landscape level, the combination port to destination. Policy, social, managerial of dense forests with agro-forestry systems and technological innovations are needed to and open areas (e.g. pasturelands) could con- reconcile climate change adaptation priori- tribute to more resilient territories. There is ties with biomass supply in quality, quantity more knowledge on the effect of landscape and cost. Finally, well developed forest value structures on fire-spread speeds, water pro- chains can be instrumental in mitigating the duction or biodiversity. There is much less ca- negative impacts of large catastrophes (e.g. pacity to create the governance and economic storms, fires) when responses to mobilise and frameworks to make these smart landscapes a transform huge amounts of damaged timber reality, especially in the context of fragmented become necessary. ownerships (see chapter 4.4).

Planned proactive measures aimed at reducing How can forests support climate risks and increasing resilience to drought can change mitigation? be designed to produce materials in certain quantities, qualities and timing, and they are The essence of climate change mitigation is clearly better than imposing reactive meas- reducing carbon emissions or compensat- ures. New models and guidelines are emerg- ing for them with increased carbon sinks in ing to better incorporate forest fire risk and natural or artificial reservoirs. The contribu- water balances in Mediterranean forestry (e.g. tion of forests can be enhanced through two Piqué et al. 2017). These new approaches look approaches: for synergies between adaptation to climate change and the supply of different types of 1. Increasing carbon stocks in different forest biomass that can match bioeconomy devel- reservoirs (trees, deadwood, litter and soil): opments. Certain sectors (e.g. engineered increasing these stocks can be achieved by ex- wood) are more demanding in terms of qual- panding forest areas, increasing biomass and

92 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe replenishing carbon in soils. Generally, this carese et al. 2014). This hierarchy of uses must approach is favoured by fast growing species, be implemented through cascade approaches high density plantations and reduced manage- (e.g. giving priority to long-life material uses, ment intensities (reduced wood extraction) to re-using, sharing, recycling, while restricting speed up biomass build-ups. This enhanced bioenergy uses to end of life uses as an alter- sequestration approach has several limita- native to disposal) and through optimal parti- tions. As forests mature, carbon is stocked at tioning of biomass (e.g. using each portion of decreasing rates, as decomposing dead wood biomass for its most valuable possible use). As and litter, compensates for new growth. As competition among different uses and market the expansion of Mediterranean forests in conditions will drive the system, it is important recent decades shows, forest continuity and to create adequate policy frameworks for max- high biomass loads increase the risk and rate imising positive climate effects. of catastrophic fires, generating uncontrolled carbon emissions, economic losses and even In this respect, the carbon balance of energy- cause the loss of human lives. only approaches has received great scrutiny in recent years (Berndes et al. 2016, Brack 2. Reducing emissions through increased sub- 2017; Robledo-Abad et al. 2017). Bioenergy stitution of fossil fuels and high carbon foot- is generally considered carbon neutral, which print materials with forest-based products means that its emissions are re-absorbed by that generally have lower carbon footprints the regrowth of the harvested stand over time. (e.g. wood, cork, natural resins): this approach However, as woody biomass is less energy focuses on carbon flows from the atmosphere dense than fossil fuels, and contains higher to forest products and requires increased pro- quantities of moisture and less hydrogen, ductivity and more intense management. As burning wood for energy usually emits more discussed briefly in the preceding section, greenhouse gases per unit of energy produced. measuring substitution effects requires a life- The final carbon balance of wood bioenergy cycle approach and case by case analysis. In must be calculated case by case as it depends general terms, the substitution effect is greater on several factors, such as (EASAC 2017): when forest-based materials (e.g. engineered wood products, cork) substitute energy inten- • The source of biomass (plantation, short sive materials (e.g. concrete, steel, plastics) in rotation coppice, waste), the intensity of op- long life-span uses (e.g. timber construction, erations, the emissions produced during for- Roux et al., 2017, Keegan et al. 2013) and where estry operations, harvesting and transport, cascade approaches are implemented. This is and changes in forest dynamics. partly due to the carbon stored in the harvested wood products, but mainly due to the very low • The regrowth period depending on site pro- energy embedded in wood and cork-based ma- ductivity, forest operations and harvesting terials. In this respect, priority should be given intensity, as this can affect in different ways to the wood construction and engineered wood the growth rates of the remaining forest and sector, then to the advanced bio-products sec- reduce or increase its susceptibility to forest tor and, ultimately, to the bioenergy sector (Cic- fires, storms, pests and diseases.

European Forest Institute • 93 • The alternative use for biomass. If the bio- Conclusion: conditions for the best mass will decompose anyway (forest resi- match between bioeconomy dues), the impact will tend to be positive; if and adaptive measures the alternative is long-term carbon storage in the forests or in wood products, the impact • Adaptation to climate change requires de- will tend to be negative. veloping adaptive management strategies17. Active, adaptive management can alleviate hy- • The technology, size and efficiency of the dric stress and the risk of forest fire, while also energy conversion, ranging from individual increasing water availability downstream. The boilers to industrial power plants and from circular bioeconomy can provide economic heat, CHP electricity or biofuels. support to adaptive measures, and there are some emerging examples. But, the bioecono- • The energy mix that will be substituted. As my can also become a driver of global change the share of renewables increase (wind, solar), when the demand reaches the point of disrup- comparing biomass emission with fossil fuel tion of ecosystem functions. Climate change emissions makes less sense. adaptation can benefit from different manage- ment intensities in the landscape, including Generally, bioenergy is and can be produced agro-forestry approaches. Policy, social and in combination with other forest products technological innovation is needed to link and services, contributing to their economic adaptation priorities with biomass markets viability (e.g. in factory bioenergy consump- and the bioeconomy, creating more resilient tion or based in residues, bioenergy linked landscapes. to fire-prevention). Even more, every single stem produces different qualities of wood • There are significant synergies between -ad that enter different material and/or bioenergy aptation and mitigation to climate change. value chains. In some cases, notably in the Forests managed for adaptation will maintain Mediterranean region, bioenergy can be the significant carbon stocks above ground and, only economically viable alternative, and is especially, in soils as carbon depleted after the economic engine needed, to manage the centuries of agricultural use is replenished. forests, reduce fuel loads, encourage forest Increased carbon stocks in soil, will improve continuity and prevent megafires(Verkerk et productivity and will help reduce water stress, al. 2018). In these cases, bioenergy should be as soil organic matter plays a key role in both a tool to improve forest conditions, to increase processes. Managed forests can supply low- the value of managed stands, and to increase carbon-footprint raw materials and feed- the sustainability and resilience of the land- stock reducing unwanted carbon emissions scape, and not as a long-term solution in itself. in uncontrolled forest fires. Due to the huge For the above reasons, the carbon balance of diversity of local forestry contexts and sce- biomass should consider together the full set narios of change, and due to the importance of forest-based products and services that are and will be co-produced (Berndes et al. 2016). 17 A clear conceptual scheme of adaptive management strategies is given by the California Department of Fish and Wildlife: http:// www.dfg.ca.gov/erp/adaptive_management.asp

94 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe of transport costs, good synergies between a • Coping with multiple uncertainties, adap- circular bioeconomy and adaptive measures tive measures are, by definition, flexible and are more likely to be seen at the local geo- regularly adjusted. Therefore, matching bio- graphic scale, while large-scale bioeconomy economy and adaptation requires flexibility sectors are expected to be more distant from in both domains. Preserving this flexibility local requirements. while progressing jointly in both directions is a challenging matter of innovation.

Box 5. The bio-economy to natural vegetation encroachment after ag- as an opportunity to tackle wildfires ricultural lands have been abandoned. Wood extraction represents a small fraction of the The Mediterranean basin is a global wildfire increment and low active forest management hotspot and wildfires in just five Mediterranean generally characterizes Mediterranean forests. countries (France, Greece, Italy, Portugal and Consequently, the young, expanding and large- Spain) currently have an effect on approximate- ly unmanaged forests contain high fuel loads ly 450 000 ha per year, representing annual and favourable conditions for rapid and large economic damage of about EUR 1.5 billion, spread of wildfires. Basic forest management just considering forest losses as perceived by practices can contribute to reducing wildfire stakeholders. A much larger figure will be ob- risks by reducing fuel loads and altering fuel tained if direct and indirect damages to eco- continuity at the landscape level. Forest and system services and property are accounted fire management could be integrated to jointly for (San Miguel and Camia, 2010). To tackle reduce wildfire risk and to supply high-quality wildfires, these five countries invest approxi- timber or biomass, as well as other ecosystem mately EUR 2.5 billion annually on prevention, services, in the context of urbanisation, glo- mostly on suppression. Despite a decline in balisation and climate change. Human actions the number and area affected by wildfires in are the main cause of wildfires as ignition is Europe and globally, the damage from wild- mostly due to runaway agricultural fires, neg- fires (expressed in the volume of wood that ligence and arson, indicating a perceived low is lost) increased over the twentieth century. value of forests. Therefore, to effectively ad- Moreover, this trend is expected to continue in dress the problem of wildfires, a new paradigm the next decades due to global climate change, is needed that recognises forests as a valuable which requires rethinking how to effectively resource that provides important, renewable, tackle wildfires in the future. In a context of biological resources and other ecosystem ser- climatic conditions favouring wildfires, the vices. A transition towards a bioeconomy will changing forest resource - in terms of area, offer opportunities to finance and operation- growing stock and structure - has been a key alise long-term, landscape-scale management factor in the increased frequency and effect of strategies. Adequate policy frameworks and wildfires in the European Mediterranean re- policy incentives are crucial to attract the nec- gion. Forest resources have greatly expanded essary investments and support the structural in the region due to active afforestation and development of specific Mediterranean value

European Forest Institute • 95 chains and infrastructures. These investments Mediterranean forests - and ultimately soci- are needed to finance and develop sustainable, ety - to confront the problem of wildfires. For integrated forest and fire management activi- more information, see Verkerk et al. (2018) ties that can help to ensure the resilience of the and references therein.

4.4. Defragmenting ecosystem services provided increasing the forest ownership challenge for policy-makers who must con- sider a broader range of private forest owners Southern Europe needs to overcome the prob- for policy development (Bengston et al. 2010). lems caused by extreme fragmentation in forest ownership and management to secure the ben- The increasing diversity of forest owners in efits from ecosystem services. Research findings Europe has resulted from ownership fragmen- on the effects of fragmentation and abandon- tation which occurs when an area of forest is ment are summarised. New governance ap- divided, or fragmented, into several smaller proaches and institutional arrangements are patches of forest habitat (Wilcove et al. 1986, presented. Some initiatives are highlighted. Collingham and Huntley 2000, Fahrig 2003). The main cause of ownership fragmentation is inheritance, with the land being distributed Introduction among all heirs instead of being inherited by only one child, as in some regions in the Ger- In Europe, forests cover 215 million ha, ac- man legal framework) (Sklenicka 2016). The counting for 33 % of the total land area (Forests distribution of land by all heirs can happen Europe 2015). Of these, about 50 % are pri- physically, i.e. the unit of land is divided in vately owned and mostly small scale with less smaller plots or into co-ownership, where all than 5 ha (Schmithüsen and Hirsch 2010). Ac- heirs share the property rights over the land cording to Živojinović et al. (2015), the diver- (Noev et al. 2003). Ownership fragmentation sity of forest owner types in Europe has been can be the result of various other institutional, increasing in the past years. Lahdesmaki et al. political and sociological factors such as ur- (2016) demonstrated significant demographic banisation, property restitution, transaction changes in the forest ownership structure in costs in land markets, expropriation from the northern Europe, namely more non-farming, original owners and dividing the land among female and elderly owners. Several studies new owners (King and Burton 1982, Blarel et (e.g. Hugosson and Ingemarsson 2004, Inge- al. 1992, Sklenicka et al. 2014). According to marsson et al. 2006, Karppinen and Tiainen Latruffe and Piet (2014), ownership fragmen- 2010) consider that the increasing number of tation is a multifaceted concept that encom- new forest owners and the consequent demo- passes five dimensions: (1) number of plots; graphic changes in the ownership structure (2) plot size; (3) the shape of plots; (4) distance are reflected in the values and objectives of of the plots from the farm buildings; and (5) forest owners by making them more versatile. distances between plots (or plot scattering). This might affect the quantity and quality of

96 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe Ownership fragmentation can lead to negative small scale forestry is very marked, especially externalities, such as problems of economic in the north and central regions. efficiency in forest management (higher har- vesting and transaction costs), disincentives for investment in forest practices, and greater Governance approaches to mitigate the management problems related to providing negative externalities associated with ecosystem services, including wildlife, water, small-scale forestry recreational opportunities and soil security (Hatcher et al. 2013). Stoddard (1942) found Securing the provision of forest based goods that the size of a forest holding influenced and services requires a landscape approach that the behaviour and management objectives of negotiates the various trade-offs among differ- non-industrial private forest owners. Muench ent goods and services reconciles stakeholders’ (1965) found that the size of a forest holding multiple needs, preferences and aspirations and its associated characteristics, namely, oc- and minimises the negative externalities as- cupation, education, and land tenure, were sociated with small-scale forestry and land positively related to landowner adoption of fragmentation and (Sayer et al. 2013). incentive-based forestry practices. Nybakk et al. (2009) established that forest size moderates Joint forest management and joint forest the effects between forest owners’ innovation ownership are examples of landscape ap- and economic performance, suggesting that proaches. The inherent aim of jointly owned large-scale forest owners benefit more from forestry is to make forest management easier the innovative use of forest land for economic for the forest owners and simultaneously cre- purposes. Stanislovaitis et al. (2015) found that ate more efficient and larger areas to increase pursuing income from forest management is the profitability of the forest economy (Ko- strongly linked to the size of forest holdings rhonen 2010). Several European countries re- and that only larger private forest owners re- port cooperation in forest management. This gard income as a top priority. More recently, can take various forms such as forest owners Feliciano et al. (2017) concluded that the size of associations, cooperatives and associations the property influences private forest owners’ for joint management. In some countries conceptualisation of management when age (Balkan countries, Romania, Portugal, Bal- and education of forest owners are considered. tic countries), joint forest management is a In addition, new owners usually have differ- recent approach to managing forests, in oth- ent management objectives from older forest ers (Austria, Norway) it was introduced long owners (Weiss et al. 2017). This chapter focuses ago. In addition, advisory, consultancy and on ownership fragmentation related to the de- managerial services targeted to forest private crease of plot size and consequently, small scale owners can help reduce some of the nega- forestry. It presents problems and opportuni- tive impacts of land fragmentation. A good ties associated with fragmenting forest hold- example is the French Centre National de la ings and, consequently, small scale forestry, Propieté Forestiere and its network of regional giving the example of a country in southern centres. Europe – Portugal - where the phenomenon of

European Forest Institute • 97 Table 13. Examples of landscape approaches in forestry across Europe

Name Definition Type Countries

Municipal forest These are claimed to be distinct from public ownership because of Joint ownership Several Euro- ownership the closeness of the management (municipalities, communities) pean countries to the multiple local beneficiaries (citizens). More than 10 % of all public forests in Europe are in municipal ownership.

Common property “Commons” are forests owned by a group (co-owners) who hold Joint ownership Italy, Poland, regimes (CPRs) exclusive rights and share duties towards that resource. It is per- Hungary, Slo- haps better understood as a group-owned private forest. This type vakia Sweden, of property exists in several parts of Europe, such as Italy, Sweden, Spain and the Portugal and Switzerland. Communal forest properties have United King- several advantages: they keep large resource systems intact without dom. having to divide them into small pieces. Community-owned or -managed forests were established as an outcome of land reforms in the 18th and 19th centuries.

Forest cooperatives Their scope and objectives depend on their individual statutes, but Self-organised Several coun- and forest associations mostly the cooperation itself provides opportunities for knowledge management for tries in Europe exchange among the members, more efficient and effective forest the benefit of the (north, south, management, and facilitates implementation of policy pro- members - not southwest) and grammes. In these countries, forest owner associations are seen as joint ownership former socialist promising organisational structures to channel state support with countries the aim of technology transfer towards sustainable and profitable forestry under the new regime.

Jointly owned forest As a potential means of preventing fragmentation and improving Joint ownership Finland the effective utilisation of the forest resource, Finnish forestry has and joint manage- introduced the idea of an investor-based, jointly-owned forest ment (JOF). A JOF can be defined as an area of combined holdings intended for the practice of sustainable forestry for the benefit of the shareholders. The first JOFs were established in Finland in the late 19th century, primarily by the authoritative orders. (Source: Lahdesmaki et al. 2016).

ZIFs – Zones of forest ZIFs are a combination of voluntary collective action of forest Joint manage- Portugal intervention owners with public authority established in Portugal. Around ment but not joint 20 700 forest owners are members of ZIFs, covering an area of ownership about 846 137 ha. The ZIF approach is considered promising for managing small-scale forest holdings by technical and political stakeholders. The first ZIFs were implemented in Portugal in 2006. The main objectives of the ZIFs are to mitigate the risk of forest fires and to cut the costs of wildfire prevention.

A Case study: Portugal about the size distribution of forest holdings in Portugal, the contrasting regional differ- In Portugal, about 93 % of the forest is pri- ences in property size are well known. Small vate (Mendes 2005). The area under private scale forestry predominates in the northern ownership is 3 129 000 ha. There are about and central regions with about 50 % of the for- 400 000 private forest owners in Portugal and est land concentrated in holdings of an area 6.5 million of forest holdings. In the north up to 10 ha. In the southern regions, more and centre of the country, most of the for- specifically in the Alentejo, the property size est holdings have less than 0.5 ha and are is large scale with most forest holdings of an populated by maritime pine and eucalyptus. area larger than 100 ha. While there is no quantitative data available

98 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe Forest Owners’ Associations • training courses for forest owners; • certification advice; and Even though there is in Portugal a high per- • forest works such as shrub cleaning and for- centage of highly fragmented forestland un- est fire prevention actions undertaken by der private ownership, the phenomenon of forest sappers, who are trained and coor- collective organisation of private forest own- dinated by the forest owners’ associations. ers began only approximately 30 years ago. These organisations appeared with rather mi- In economic terms, the range of services pro- nor involvement of the forest services in pro- vided by forest owners’ associations falls in the moting forest owners’ associations. The state following categories (Mendes 2006): only played an indirect, but rather important, catalysing role mainly due to grant-driven af- • private services: e.g. technical advice, har- forestation programmes and other incentive vesting, or marketing services provided to schemes that were implemented after Portugal each individual member; entered the EU. This funding helped to sup- • club goods: e.g. implementing forest certi- port the implementation and operating costs fication schemes; and of forest owners’ associations and encouraged • public goods: e.g. contributing toward re- forest owners to ask for technical advice about ducing the risk of forest fires or to provid- the grant schemes and other services (e.g. ing more positive forest externalities such mapping properties). as landscape quality, climate regulation or recreation. Torrijos et al. (2003) notes several advantag- es of forest owners’ associations, namely for There seems to be a positive correlation be- promoting action among small-scale owners, tween the number of members and the di- improving the profitability of non-industrial versity of services provided. This implies private forestry, promoting forest multi-func- circular causation, i.e. on the one hand the tional uses and promoting the sustainable use increasing number of members generates a of forest resources. higher demand for the provision of services, and on the other hand, the increasing number The following is a non-exhaustive list of ser- of services provided by forest owners’ associa- vices provided by forest owners’ associations tions attracts more members (Feliciano and in Portugal: Mendes 2012).

• information about the public incentive schemes for forest investment; Forest fires and ZIFs • preparation of forest plans to apply for funds from those programmes; Forest fires are an old phenomenon in Portu- • monitoring forest plans and afforestation guese forests. What is new, and has become works carried out by private contractors; more frequent, is the scale reached by these • technical information about forest manage- forest fires in 2003, 2005, 2016 and especially ment operations; in 2017 when more than 100 people died and

European Forest Institute • 99 approximately 500 000 ha of area were burnt The ZIFs emerged in 2005 (Law-Decree no (Figure 13). For many years, the cork oak for- 127/2005 from 5 August) as a proposal for the ests in the south were not affected and the eu- organisation of the Portuguese non-industrial calyptus forests, mostly managed by the pulp private forest owners. The ZIFs are areas of con- and paper industries, were usually less affect- tinuous forest managed under the same forest ed by forest fires. More recently, forests burn management plan. The forest holdings cov- everywhere, including the highly managed ered by ZIFs can be owned by different types forests such as eucalyptus forests. After the of forest owners: private (e.g. individual, in- big fires that occurred in2003 , the Portuguese dustries), state, commons. The management Government approved a Permanent Forest entity of ZIFs oversees implementing the forest Fund to support forest expansion, protection management plan. The ZIFs aim to provide ef- of existing forests and provision of forest pub- fective and suitable management of forests to lic goods and services. Later, the Government overcome the constraints of small-scale forest recognised that forest fires were a complex holdings, and, in addition, to reduce the risk problem and approved a new instrument to of forest fires and to promote the recovery of tackle the problem. This instrument is called burnt forest areas. Currently, these zones have ZIF – Zonas de Intervencao Florestal (Zones a national distribution and occupy a total area of Forest Intervention) and its main objective of about 8 % of the country’s mainland. ZIFs is to reduce ownership fragmentation and to usually have a management entity (entidade cut down wildfire prevention costs. gestora) that is often a forest owner organisa- tion. Forest owners with forest stands within the perimeter of a ZIF are obliged to follow a Figure 13: Area burnt in Portugal between 1980 and forest management plan, which had to be ap- 2017 (Source: PORDATA1 and ICNF2) proved beforehand by the general assembly of the ZIF (Fernandes 2008, Marques 2011, Va-

1 https://www.pordata.pt/Portugal/ lente 2013). Around 20 700 forest owners are 2 http://www.icnf.pt/portal/florestas/dfci/relat/rel-if/2017 members of ZIFs, corresponding to an area of

100 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe 846 137 ha (Valente 2013). ZIFs provide a good Despite the successful participation of for- opportunity for forest owners who have inher- est owners and forest owners’ organisations ited their forest holdings but live in the city or in in implementing ZIFs, early enthusiasm has other countries and have no capacity to manage faded in the last few years because measures the forests by themselves, to outsource forest and actions were not effectively implemented management to the ZIF management entity. (Valente et al. 2013). Several problems might The objectives of ZIF are to allocate concrete have contributed to this situation. Mendes and responsibilities to the management entity, to Fernandes (2008) pointed out the high level structure the territory, to homogenise local and of bureaucracy associated with implement- regional policies and to integrate different an- ing ZIFs and the lack of financial incentives to gles of the local and regional policies. The ad- help forest owners who were undertaking the vantages of this joint management mechanism actions required by the approved forest man- for the forest owners are: mitigating transaction agement plan. The financial incentives were costs, having political representation (lobby), to be delivered through the Permanent Forest coping with free-riding problems, claiming for Fund (Fundo Florestal Permanente) and the, compensation for the public goods and servic- now extinguished, PRODER (Portuguese Ru- es provided, and as a framework to exchange ral Development Programme), but the money knowledge and to promote social cohesion. The was not always transferred to the management ZIF approach is considered promising for man- entity on time, and this constrained the forest aging small-scale forest holdings by technical work. With high management costs, the fail- and political stakeholders. ure of financial incentives is a shortcoming for implementing ZIFs. Other barriers are issues ZIFs are organised by: related to property rights. Because a ZIF has no juridical capacity to intervene in the forest hold- 1. internal regulation, which defines the objec- ings, some of the necessary forest works are dif- tives of the ZIF and the power and duties ficult to undertake. The council of Mação, one of members; of the Portuguese councils with ZIF approval 2. forest management plan (PGF), which de- since 2005, was in 2017 still seeking funding fines the areas for production, protection to implement the actions described in the ZIF and forest work; and management plan, including joint forest man- 3. specific plan of forest intervention (PEIF), agement and maintenance and construction of which defines the actions for preventative fire breaks. In2017 , it was estimated that 80 % forest works (e.g. forest fire protection plan, to 90 % of the area of Mação was burnt18. pest and diseases protection plan). In 2008, Mendes and Fernandes made some The forest owners’ associations located in recommendations for successfully imple- the regions of small-scale forestry in north- menting ZIFs, but these were never fulfilled: ern and central Portugal have been the most active players in establishing and managing ZIFs and in preparing and implementing the 18 http://observador.pt/2017/08/17/incendios-autarca-diz- que-80-a-90-do-concelho-de-macao-ardeu/ (Accessed forest management and fire protection plans. 30/01/2018)

European Forest Institute • 101 1. public funding should be given in the me- Conclusion dium-term and with a cap; 2. management entities should be given free- Innovative methods for forest management dom to set objectives to accomplish the can mitigate some of the problems associat- management plan and should be evaluated ed with small-scale forestry and ownership for effectiveness by independent entities; fragmentation. In Portugal, the ZIF approach 3. eligibility of public funding should be has been recognised as a promising for man- linked to the effectiveness of the manage- aging small-scale forest holdings by a wide ment entities; and range of stakeholders (policy makers, forestry 4. management entities should be severely engineers, researchers). However, the barri- punished in cases where the managers take ers for implementation have contributed to advantage of the public funding provided. the failure in delivering the main objectives, mainly preventing forest fires and contribut- As described above, the development of the ing to sustainable forest management. Until ZIFs has shown some promises but also sig- 2017, numerous ZIFs (150 in 2013) have been nificant limitations and highlights the need approved and management plans have been for policy innovation to address forest owner- designed, but there has not been money to ship fragmentation and its related challenges implement the planned actions. Due to the (e.g. forest abandonment). The long standing enormous fires in 2017, forest policy has associations foncières in France, their recent been discussed and is now being reformu- Italian incarnation in Associaizoni Fondiarie lated. It is crucial to allocate a percentage of or the Galician Sociedad de Fomento Forestal the permanent forest fund to managing ZIFs, (SOFOR) can provide important lessons and to revise this at least every second year, and can help provide relevant solutions for other also to undertake the forest holding map- territories. ping (cadastre) for Portugal so the planned actions can be enforced. Decision-making regarding ZIF management should be an in- clusive process, taking into consideration the views of the wide range of local and regional stakeholders. This would reduce any existing prejudices and scepticism about ZIFs, and it should contribute to increasing the social le- gitimacy of the management entity of ZIFs to pursue sustainable forest management. Public campaigns should be organised to increase the public’s awareness about the importance of forests in providing ecosystem services for human wellbeing and the advantages of joint management approaches for maintain- ing those services.

102 • Chapter 4. Unleashing the potential for the forest-based bioeconomy in southern Europe 5. Concluding remarks

Forests have rapidly expanded in southern actors in the private and public spheres, from Europe over the last decades. They offer a large corporations to social entrepreneurs, from bi- and diverse portfolio of ecosystem services omass providers to industries and distribution ranging from provisioning services (wood, networks, and from governments to citizens. lignocellulosic biomass, non-wood products), A positive, shared vision on sustainable, feasi- regulating services (preventing soil erosion) to ble but also desirable futures is needed. These cultural and immaterial services (recreation, futures must be co-created through system- mental health, cultural identity). All these for- atic, informed participation and envisioning est services will play a significant role in the exercises at multiple scales, from local to re- bioeconomy. This reporthas explored some gional and global. A critical element will be of the most relevant challenges and oppor- to move away from considering growth as tunities ahead to realise their potential, con- the solution for all economic problems and sidering the ecological, economic and social instead focus in the content and quality of eco- specificities of southern forests. The following nomic growth, in order to achieve social and paragraphs summarise the key findings and environmental sustainability. The principles recommendations for action. elaborated on in the context of the circular economy are pertinent because they empha- sise sharing, reusing, recycling, resource de- Shared visions for a bioeconomy in coupling and zero waste. Trade-offs between southern Europe economic growth and environmental protec- tion will become less and less acceptable and a The circular bioeconomy is crosscutting in stronger focus must be placed on identifying nature. It requires a deep transformation in and realising promising synergies. Avoiding the way we manage and use natural resources environmental degradation must become a and the way in which we design, produce and shared objective across societal actors. En- consume goods and services. This is only pos- vironmental accounting can help visualise sible though the concerted action of multiple the real value of natural capital and improve

European Forest Institute • 103 policy and economic decisions. Only through • Improved access to finance and reduced engaged citizens, cities and regions will the risks through, for example, public-private bioeconomy become a thriving reality. partnerships, long-term loan guaranties and green bonds in which a third party shares the risk of the project with the actual investors A stable enabling environment that might not have that capacity. Targeted instruments for the early stage and up scaling Transforming the current petrochemical sec- are required. tor will take decades and requires a long-term enabling environment that takes the specifi- • Integrated industrial ecosystems. One-feed- cities of the bioeconomy into account. The stock-one-product approaches will be subject bioeconomy is characterised by a large diver- to high technical and market volatility that gence of value chains, in which a given batch can be overcome through multi-feedstock bio of biomass can be used for multiple products refineries producing a larger set of products and can follow many possible technological in a regional industrial complex. Combin- pathways. In a context of emerging technolo- ing high-value specialty products with larger gies, evolving markets and fierce competition volume commodities and the ability to shift with non-bio-based products and materials, to the best available feedstock, responding it is often difficult to foresee which technolo- to seasonality in supply, can reduce risks. It gies or products will succeed. Moreover, with has, however, significant technological chal- few exceptions, it will be difficult to match the lenges and requires decisive action to bring economies of scale typical of the petrochemical multiple actors together in value chains that industry and will require smaller bio-factories, are separate today. closer to source areas. These competitive dis- advantages and increased uncertainties are the • Exploiting the intrinsic quality and prop- main obstacles in the way of expanding the erties of forest biomass (e.g. cellulose fibres, bioeconomy and must be overcome through: solid and engineered wood or cork materials. etc.) will contribute to a long-term competi- • A favourable policy environment that offers tive advantage as those products and materials security to investors. It must be technology will be less easily replaced in a very dynamic neutral to avoid bottlenecks and technological technological and market landscape. They will lock-ins and to favour innovation. It should also provide a good basis for a larger portfolio include product standards and regulation to of products based on side streams. set up a predictable playing field, improving societal awareness and securing positive envi- • Innovation capacities must be overhauled. ronmental and social impacts. A high enough Investments in research and development carbon tax, reducing perverse subsidies on must be increased to catch up with efforts fossil fuels and product regulations (e.g. man- being made by other European regions, but datory targets to reduce or substitute certain special attention should be given to bridging products or processes) are frequently consid- the knowledge innovation divide. The lack ered as necessary game-changing initiatives. of funding and adequate facilities to test and

104 • Chapter 5. Concluding remarks upscale research results is considered one social implications of its mobilisation. It is of the main hurdles in the way of develop- important to communicate findings transpar- ing the industrial bioeconomy in southern ently to allow public and private operators Europe. The technological push (supply side to make sound investment decisions. As has policies) needs to be better coordinated with happened with wood, cork or resin, mobili- the market pull or demand side policies (e.g. sation efforts will frequently not be enough innovative green public procurement). In ad- and broader strategies for biomass production dition, cross-sectorial connections should be might be needed (e.g. expanding the resource encouraged to help businesses discover the base, sustainable intensification). Frequently, bioeconomy, developing, cross-sectorial bio- bioeconomy activities are based on imported economy clusters and implementing niche in- resources and it is important to set up well novation approaches (e.g. through living labs recognised standards to assess their environ- and co-creating solutions along and across mental and social footprints. value chains). At the same time, more em- phasis will needed in social and managerial • Forests and agro-ecosystems provide much innovation as a necessary complement to more than biomass and frequently the eco- technological innovation. New sets of skills nomic relevance of natural and cultural herit- might be required, notably those emerging age can surpass that of material value chains. from a cross-fertilisation between biology, These ecosystem services must be well under- engineering, entrepreneurship and social stood and monitored, including its differential sciences. At this early stage, increased cross- beneficiaries and economic relevance. They regional cooperation might be needed to set must be considered and integral part of bio- up required training programmes in a cost- economy strategies. effective way. • Overcoming the fragmented nature of for- • Securing the supply of biomass and ecosys- est ownerships is a necessary condition to tem services. Ensuring an adequate supply of securing the long-term provision of biomass quality biomass is frequently identified as one and other ecosystem services, and it requires of the most critical barriers in the way of the urgent political attention. bioeconomy, and it is extremely relevant in southern Europe where biomass resources are diverse, and where there is, in many regions, limited wood mobilisation capacity. It is im- portant to better understand and characterise available biomass (e.g. which agro-residues and agro-food wastes are produced in very significant quantities along with forest bio- mass) and to better estimate the future avail- ability of forest biomass considering not only physical availability but also regrowth rate, mobilisation costs, and environmental and

European Forest Institute • 105 A regional approach and location-based strategies

The bioeconomy could take completely dif- ferent shapes in different regions. At any given location, it will require an innovative combination of biotechnological approaches, biomass processing capacities and agro-eco- logical developments, including local sup- ply chains and nature-based-tourism-type strategies. In this sense, a focus on the goods and services of forested landscapes rather than on traditional forestry will be needed. The regional dimension is necessary to be able to create industrial ecosystems and the adequate economies of scale. Each regional approach will need to make the best of avail- able natural resources, building on regional competitive advantages and reflecting policy and societal choices. It must also address the deep social and economic transitions induced by the urbanisation and the tertiarisation of the economy, with the related displacement of the centre of gravity from rural areas to cit- ies and from goods to products and services. These location-based, regional bioeconomies will require increased policy coherence and can probably be better embodied in a next generation of rural development plans and regional smart specialisation strategies.

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