BioEconomy Initiative – Background
Why is the initiative necessary?
- Over the last decade, Alberta’s industry, communities, R&D providers and government have all played a role in examining bio-based economy.
- Based on the preliminary findings and recommendations made by all stakeholders, Alberta has invested almost $300 million CAD since 2006 to support bio-based economy initiatives, mainly in:
- feedstock improvement;
- biomass conversion; and
- product development.
- In 2011, at the end of this first five years of support, the timing is right for a “Reality Check” to take stock, re-evaluate, re-focus and align our collective efforts.
- Alberta Innovates Bio Solutions is charged with taking on this task with the support of others in the Alberta Innovates family, not-for-profit agencies and government ministries directly involved with aligning their strategic plans to enable a bioeconomy to flourish.
What stakeholders are involved in the initiative?
- Alberta Innovates
- Alberta Research and Innovation Authority
- Alberta Advanced Education and Technology
- Alberta Sustainable Resource Development
- Alberta Agriculture and Rural Development
- Alberta Environment
- Alberta Treasury Board and Enterprise
- Alberta Energy
What processes will guide development of the initiative?
- CREATE a forum for cross sector, interdisciplinary discussion that enables better understanding of the opportunities, issues and constraints facing Alberta in the bioeconomy.
- EXPLORE the innovation ecosystem requirements to take advantage of the unique opportunities in Alberta’s bio-based economy.
- DETERMINE how best to overcome the constraints and challenges related to Alberta’s bio-based economy.
- IDENTIFY and ENCOURAGE areas of convergence that will lead to new collaborations and open innovation (most importantly the development and application of new knowledge) for Alberta’s bioeconomy.
- DEFINE future direction and investment priorities to advance and position Alberta’s bioeconomy.
This initiative is supported by a Steering Committee and Working Group, formed by the agencies and ministries responsible for ensuring the bioeconomy has every opportunity to succeed.
What is the bioeconomy opportunity for Alberta?
- The Alberta bioindustrial sector (non-food and non-pharma) of the bioeconomy is at a very early stage of growth; however, experts predict this burgeoning sector holds as much promise for Alberta as the oil sands did 60 years ago.
- Experts value the total addressable bio-industrial market at $8.3 trillion dollars in global annual economic activity (Source: Biofuels digest).
- Expansion of the bioindustrial component of Alberta’s bioeconomy, provides value-added opportunities to grow our agricultural and forest sectors in an economically and environmentally sustainable way, offers green products and green solutions to augment our petrochemical industry, and enhances rural development through new jobs and globally competitive businesses.
- Integrated biorefineries are facilities that use biomass feedstocks from agriculture, forest and municipal solid waste for the efficient conversion of biomass into affordable biofuels, energy and a wide range of high value biochemicals and biomaterials. This is similar to the petrochemical refinery model where only 8 per cent of the crude oil feedstock is dedicated to chemical production but it generates 25 to 35 per cent of the annual profits. (Source: OECD 2011).
- The world biochemicals market has been predicted to grow from 20 to 25 per cent in 2010 to 45 to 50 per cent in 2025 (Source OECD 2011).
- Some of the largest volume plastic products in the market (such as plastic grocery bags made from cornstarch) already have bio-based plastic versions which reduce carbon dioxide emission or are derived from renewable sugar rather than non-renewable oil feedstock (Source: OECD 2011).
- A 2008 study predicted growth rates for bio-based plastics would be 17 per cent per year through to 2020 (Source: OECD 2011).
- European Union has proposed a 20 per cent cut in greenhouse gas emissions by 2020. (Source: OECD 2011).
- Alberta’s next wave of greenhouse gas emission reductions and mitigation strategies is forcused on bioindustrial technologies and products and could result in as much as 20.7 Mt CO2e/year in reductions (CCEMC 2010).
What is Alberta’s competitive advantage in the global bioeconomy?
- The bioeconomy opportunity in Alberta is immense because of our province’s abundant natural resources, clean air, water, 21 million hectares of agricultural land, 38 million hectares of forest land and a highly skilled workforce. All of these resources are located in close proximity to a dynamic energy industry that serves as a local market and a source of technical expertise and is set in a stable jurisdiction with supportive policies and communities. This combination of resources and assets is unique in the world.
- Alberta is home to supportive research, product and business development organizations and world-class research and development infrastructure, which is documented in more detail at http://www.bioeconomyalberta.com/research-development-and-commercialization.
- Alberta’s modern infrastructure supports business development and growth and includes advanced technology and communications networks, extensive transportation networks of roads, rail, air, refineries and pipelines, and high-quality education and training facilities. Learn more at http://www.bioeconomyalberta.com/integrated-infrastructure.
- Bioeconomy Alberta Team (www.bioeconomyalberta.com) provides a competitive advantage for Alberta through the coordinated leveraging of knowledge and infrastructure by a multi-sectoral group of implementers drawn from across government, agencies and academia. This team of more than 20 individuals actively helps to coordinate:
- Investment attraction
- Trade development
- Commercialization of business in Alberta
- Global/local partnering for AB companies and researchers
- Annually since 2005, this team has provided an Alberta presence at the World Congress on Industrial Biotechnology and Bioprocessing with a focus on attracting companies to Alberta to invest in R&D or do business. This six year commitment is showing results. As a result of the team’s efforts at the most recent Congress in May 2011, successful follow up initiatives include:
- establishing a collaborative commercialization initiative with a Tier 1 automotive company for a transformative biocomposite product from agriculture and forest biomass that will be the first of its kind in the world at a large scale.
- Alberta becoming a key development partner with an international biotechnology company to develop technology platforms for conversion of agriculture and forest biomass into cost competitive high performance materials that can directly replace glass fibre and non-renewable plastics.
- multi-national companies seeking Bioeconomy Alberta Team members such as the Alberta Bio Materials Development Centre and Biorefining Conversions Network for specific collaboration on long-term projects to develop new products. This is a major shift for these multi-nationals who mostly do their development work in-house and are wary of public sector processes.
What is the current state of Alberta’s bioeconomy?
- Alberta’s current bioeconomy of $24 billion in annual economic activities is about one-third the value of Alberta’s hydrocarbon economy. Our bioeconomy is comprisedmainly of agricultural ($201. billion) and forest ($3.6 billion) industries.
- Alberta’s current production of bioindustrial products such as biochemicals, biomaterials, and bioenergy products is a small but growing portion of our bioeconomy and uses feedstock from agricultural and forest biomass and municipal solid wastes. Bioindustrial products include: specialty chemicals, plastics, composites for building materials and automotives, green textiles, biodiesel, bioethanol, bioenergy and much more.
- Alberta’s bioindustrial research and development is focused on value-adding to Alberta’s natural resources and to conventional products. The scope of research spans feedstock development, conversion technology and product development, pilot-scale testing, and is followed up by investment by the private sector for commercialization at an industrial scale. In addition, the bioeconomy is supported by research in environmental sustainability, life cycle assessment, etc.
- Since 2006, Alberta’s investments in developing the provincial bioeconomy have included $166 million for research and development, $85 million for R&D infrastructure.
- Alberta has about 35 bioindustrial researchers and about 50 companies working in biomaterials, 7 in biochemicals, and 14 in bioenergy. In 2010, bioenergy generated the greatest value of about $233.4 M.
- By contrast, from 1974 to 1999, the Alberta Oil Sands Technology Research Authority (AOSTRA) invested more than $2 billion in research and development, resulting in foundational technology for steam-assisted gravity drainage, breakthrough method of underground bitumen extraction (Source: Alberta Oil 2010).
- This patient investment of funding from that early period is now paying dividends in billions of dollars in oilsands economic activity, engaging more than 700 scientists in oilsands research in Alberta.
What is the “bio-economy” and “bio-industrial” sector?
- Defining the bio-economy can be challenging given that this is a relatively new term and involves different sectors and markets, both existing and new. Measuring the value of a jurisdiction’s bio-economy typically considers the markets that are being served with new bio-based products and services.
- For the purposes of this Alberta Innovates Bio Solutions initiative, the focus is on Alberta’s “Bio-industrial” sector – specifically growth opportunities through new products, technologies, and services based on forestry and agricultural sector biomass resources and municipal organic waste.
- This includes taking forestry, agricultural and municipal primary or waste products and turning them into new, higher value-add bio-based chemicals, materials, energy, and fuels that can serve new or existing markets.
- It is important to note that this emerging sector – bio-based “value-added” – is more than just seeking markets for new products. It includes rethinking traditional industry practices, strategies and mindsets such that unique opportunities are found through collaborating across new value chains and creating cross-sector partnerships.
- As a result of the drive to tap into new value-add products available from wood and agriculture fibres (primary or waste), grains, animal waste and fats, and municipal organic waste, new technical innovations are continually being advanced in Alberta. As well, new sets of services are being created; this includes the commoditization of ecosystem services, whereby industry and government increasingly recognize the financial value of natural services that provide societal benefits, such as clean air, clean water, soil protection, and carbon sequestration.
What is not included in the working definition of a bio-industrial sector for the BioE initiative?
- This particular initiative does not include advancing food products, life sciences, health, medical, or pharmaceutical industries within or outside Alberta. The bio-based aspects of these industries are certainly a core component of any “bio-economy” and are significant markets for a bio-products sector, and advancing growth in these industries is a key focus for the province, including for Alberta Innovates and BioAlberta; however, these industries are outside of the scope of this initiative
What is a biorefinery?
- Over the past five years Alberta has made large strides in the area of biorefineries, which are an important example of the developing bio-industrial sector in Alberta and a potentially central element of a vibrant and mature sector. A biorefinery is an integrated system that combines technologies with a set of management processes, taking a wide range of bio-feedstocks and converting them to produce a wide range of bioproducts. Biorefineries make full utilization of their biomass feedstock to extract the greatest value and high-value products.