Time to invest in Europe’s bio-clean tech delta

February 4, 2010

Luuk- Luuk van der Wielen is at BE-Basic and Delft University of Technology; Roger Wyse is Managing Director, Burrill & Company, San Francisco. The opinions expressed are their own.-

Today the global megatrends of food security, energy security, global climate change and sustainability command the attention of nations worldwide.  Confronting these challenges will test political systems, drive policy and stress international relations.

To address them successfully, nations and companies are making massive investments in R&D, seeking solutions that will drive global innovation for decades.  The application of modern discoveries in biology and biocleantechnology will be a major enabling force to address these issues.

Indeed, the application of bio-clean technology can potentially mitigate many of Europe’s ecological and economic challenges.  The markets for bio-based (or green) products and technologies made from agricultural waste — instead of oil — are currently large and open.

However, the public and private sector must act now otherwise we will miss a huge opportunity to generate economic value and delay will only worsen our environmental predicament.  Access to innovation must be global in nature as no country has the resources necessary to discover, develop, and implement solutions.  Furthermore, the problem and therefore the solution knows no national boundaries.

The Netherlands are a first-class example of how bio-clean technology can and should drive a new wave of innovation.

Much of the Dutch economy is founded on the immediate post-Second World War industrial wave that brought the likes of Shell, DSM, Phillips and Unilever to global prominence.  In recent decades, the economy consolidated with competitive and entrepreneurial potential under-utilised.

A new wave of industrial innovation for the country is now badly needed to tackle the rise of the BRIC-economies (Brazil, Russia, India and China), the recent financial down-turn, not to mention the vulnerable, climate-sensitive Dutch delta region (with about 50 percent of the country below the rising sea level) which will be affected by the consequences of energy security and climate change.

Bio-clean technology can power that new wave of innovation.  The Netherlands have consistently worked to implement a number of national public-private innovation programmes around the topic of bio-based and other clean technologies that are now starting to pay off in a major way, and within which there will be attractive near- to mid-term private-sector investment opportunities.

Earlier this month, a new wave of public-private R&D investments exceeding 0.5 billion euros was launched, including:

*       large-scale initiatives on industrial biotechnology and biorenewables (BE-Basic),
*       direct solar to chemicals and energy production (Biosolar),
*       process intensification, carbon capture and storage (CATO) and others.

This large package of bio-clean technology also forms the backbone of the recently awarded CLIMATE KIC by the European Institute of Technology.

The participants in the Netherlands’ public-private programmes include major Dutch companies (DSM, AKZO Nobel) and Universities (Delft University of Technology as well as Groningen, Utrecht and Wageningen Universities) and also other premier European academic institutes such as London’s Imperial College, the German technical universities of Dortmund and Karlruhe, and also a number of institutions outside Europe such as the Energy Bioscience Institute of UC Berkeley.

An important driver is the potential to establish a sustainable bio-based economy for the production of chemicals, materials and transportation fuels.  This could also add further value to the residues of a food producing agricultural sector.  We are well on our way to converting biomass into a range of renewable chemical and materials.

Applications of biotechnology in the chemical and energy industries are already resulting in sustainable sources of second generation biofuels, biocatalysts and renewable chemicals, meeting the growing demand for energy and renewable materials.

Thus, bio and clean technologies will be major contributors to addressing the challenges posed by the global megatrends of food security, energy security, climate change, and sustainability.  With the continued success of these technologies, exciting investment opportunities exist within and across the agricultural, chemical and energy sectors.

Prudent investments in technology-rich, private companies that contribute viable solutions should generate attractive returns to venture investors while addressing important societal issues.

This requires investments in companies at two stages;

*       early on, in companies with potentially disruptive or broadly applicable technologies, and,
*       later on, in the adaption and commercialization of proven technologies for new markets.

Companies invested in this way will be well positioned to succeed in global markets and be attractive acquisition targets for global chemical, energy and agricultural companies or for IPOs in ready markets throughout the world.  At present, Northern Europe is a most promising place for these governmental and private investments given the solid home market with a clear consumer awareness about sustainability and resource security, a world class R&D potential, and a well established industry and logistic infrastructure, that needs to be reshaped toward the challenges of the future generation.

However, two key challenges lie in the way of us realising this vision.

First, Europe needs to better connect the flow of scientific and technological concepts from the large pool of sustainable bioclean technology initiatives into the generation of new companies, jobs and economic growth. Given the substantial amount of public resources in these programmes, novel mechanisms will have to be implemented to guarantee clear returns to the public purse.

The second challenge is to stimulate activities that also lead to climate adaptation (most bioclean tech programs target mitigation only).  This is crucial, for instance, for the Netherlands given that 50 percent of its land is below the rising sea-level.

The well known Dutch expertise in water and delta management — much of which was developed at Delft University of Technology — has to be advanced further.  Interesting examples have arisen, for instance, in the BE-Basic program from the exploration of biogrouting,  bioconstruction materials and other completely new bio-based mechanisms leading to new ways to build dikes and enforce weak soils.

If we can surmount these twin challenges, and by harnessing the major biocleantech innovation wave, the prize for Europe will be not only positive climate effects and energy security but the foundation-stone for a new generation of sustainable, economic growth.

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