The future landscapes of bioeconomy: Hungary A Climate-KIC Bioeconomy platform study Final draft, February 2014 1 This study was accomplished within the frame of the Climate-KIC Bioeconomy Platform and carried out by the following Hungarian experts: Zsolt Barta, PhD graduated from Budapest University of Technology and Economics (BME) in 2007 receiving a master degree in bioengineering. Between 2007 and 2010 he took part in the doctoral school program at BME in the field of second generation bioethanol production. During his PhD studies he spent several months at Lund University in Sweden and at CIEMAT Research Centre in Spain, where he performed research on biomass conversion into ethanol and biogas. In 2011 he successfully defended his PhD dissertation, and he received his PhD. Since 2011 he has been employed as assistant lecturer at the Department of Applied Biotechnology and Food Science, BME. Currently he carries out research on biorefining of corn fibre into value added products (xylitol, arabinose) and energy carriers (bioethanol, biogas) with three PhD students. His research group also performs techno-economic evaluations of biomass conversion processes, primarily investigating the biochemical route. Miklós Gyalai-Korpos, PhD graduated from Budapest University of Technology and Economics (BME) in 2007 with MSc in bioengineering. Between 2007 and 2010 he participated in the doctoral school program of BME working on second generation bioethanol production, then in 2012 he successfully defended his PhD dissertation. During the doctoral school he was involved in education too, giving lectures on bioenergy and supervising undergraduate students. Between 2010 and 2013 he was employed by the Ministry of National Development of Hungary at the department responsible for long term energy policy and international energy relations. He participated in the drafting of the National Energy Strategy approved by the Hungarian Parliament in 2011. These experiences helped him to gain a complex insight into the energy landscape with emphasis on sustainable energy alternatives. In April, 2013 he joined the Climate-KIC Central Hungary team. András Molnár, PhD is a Research Associate at Research Institute of Agricultural Economics, working in the area of agricultural and rural development policy assessments, recommendation, data analysis. He also works at National FADN Liaison Agency. He has strong competence on the field of sustainability assessment, with particular emphasis on climate change and bioenergy. He has been actively involved in FP6 and FP7 projects on the field of sustainability and sustainable farm management of soils. As a short term expert, he contributed to biomass project feedstock feasibility studies and in various policy assessments related to renewable energy. His PhD thesis analysed the possibilities of a new sustainable assessment method in the agricultural sector. In 2009 he participated in the “Intensive Program in Biorenewables” summer school at Iowa State University, Ames IA, USA with a certificate of excellence. Gábor Dénes Szabó is an economist graduated from Corvinus University of Budapest (CUB) in 2009 with MSc in economics, specialized in Environmental Management and Rural Development. During the last year of his MSc in 2008, he started to work for a rural development advisory firm as economic analyst dealing with financial calculations of development plans. In 2009-2010 he worked at an agricultural research institute in Germany where he prepared cost-benefit analyses for Miscanthus production. He started his PhD studies in 2011 at CUB with a research topic of „bioenergy from the aspects of rural development” focusing mainly on economic aspects of bioenergy supply chains and second generation biorefineries. During his PhD studies he has collaborated as a research fellow with WWF Hungary, Aston University and Imperial College London. The authors gratefully acknowledge the contribution of Edward Someus1 to chapter 2.3.2 and his useful advices on biochar production and regulation, as well as Dóra Dienes, PhD for her critical proofreading of the whole document. 1 3R Zero Emission Pyrolysis processing & carbon refinery, http://www.3ragrocarbon.com 2 1 Introduction ..................................................................................................................................... 5 2 General overview ............................................................................................................................ 6 2.1 The drivers of the bio based economy .................................................................................... 7 2.1.1 Environmental and climatic drivers ................................................................................. 7 2.1.2 Economic drivers ............................................................................................................. 8 2.1.3 Policy drivers in the EU & the USA .................................................................................. 9 2.2 Supply side – sustainable biomass sources ........................................................................... 12 2.3 The conversion – routes and platform products ................................................................... 15 2.3.1 Feedstock dependent routes ......................................................................................... 16 2.3.2 Feedstock independent routes ...................................................................................... 21 2.4 Emerging market for bioproducts ......................................................................................... 24 2.4.1 Case of drop-in chemicals – analogues for the oil refinery ........................................... 24 2.4.2 Novel products .............................................................................................................. 25 2.5 Vision ..................................................................................................................................... 28 3 Climate-KIC and its bioeconomy platform .................................................................................... 29 3.1 European Institute of Innovation and Technology (EIT) ....................................................... 29 3.2 Climate-KIC ............................................................................................................................ 30 3.3 Bio-economy platform........................................................................................................... 31 4 Hungary’s relevance in the bioeconomy ....................................................................................... 33 4.1 Methodology of the survey ................................................................................................... 33 4.2 Relevant national policy documents – assessing the drivers ................................................ 34 4.2.1 Renewable Energy – Hungary’s Renewable Energy Utilisation Action Plan ................. 34 4.2.2 National Energy Strategy 2030 ...................................................................................... 35 4.2.3 Hungarian National Environmental Technology Innovation Strategy ........................... 35 4.2.4 Darányi Ignác Plan Framework Programme for the Implementation of the National Rural Development Strategy ......................................................................................................... 36 4.2.5 National Research and Development and Innovation Strategy 2020 ........................... 36 4.2.6 New Széchenyi Development Plan ................................................................................ 37 4.3 Supply side assessment ......................................................................................................... 37 4.3.1 Sustainable biomass potential of Hungary .................................................................... 37 4.3.2 Available literature and data gaps ................................................................................. 41 4.3.3 Stakeholders in feedstock data analysis ........................................................................ 41 4.3.4 Opportunities and challenges of stakeholder engagement .......................................... 42 4.3.5 Addressing the feedstock needs of KBioE projects ....................................................... 43 4.4 Converting biomass into value-added products in Hungary ................................................. 43 4.4.1 Overview of existing processing plants and refineries .................................................. 43 4.4.2 Key R+D stakeholders and research centres ................................................................. 55 4.4.3 Industry engagements: Clusters and industry associations .......................................... 64 3 4.4.4 Addressing the data and refining needs of KBioE projects ........................................... 68 4.5 Demand side assessment of bioeconomy products in Hungary ........................................... 69 4.5.1 Market assessment to establish range of substitutable products ................................ 69 4.5.2 Demand side stakeholder engagement ........................................................................ 69 4.5.3 Gaps and possibilities – potential connection points to KBioE ..................................... 69 4.6 Promoting KBioE and bioeconomy in Hungary ..................................................................... 69 4.6.1 Stakeholders