Biobased Industry Growing, but Needs More Federal Help, Report Says
by Philip Brasher (Agri-Pulse) Production of biofuels and biobased products such as plant-derived plastics already support 4.2 million jobs, but the industry’s future growth rate depends in part on oil prices and the availability of new government incentives, according to a study commissioned by the Agriculture Department.
The study, authored by experts at Duke University and North Carolina State University, also said that the federal government itself has been slow to use the products despite USDA’s efforts to promote them.
The job estimate includes 1.6 million jobs directly involved in the biobased sector. Another 2.6 million jobs are indirectly created in its supply channels or through additional purchasing by households that benefit from the industry’s impact on employment and production.
The industry added $393 billion to the economy in 2014, including $127 billion from sales, the study found. USDA’s definition of biobased products excludes livestock, food, feed and pharmaceuticals.
But the study also found that biobased products remain relatively unknown in the federal government, despite USDA’s efforts to promote their usage. The products also face challenges with the public because of widespread opposition to GMOs and concerns about the use of crops for fuel and other products, the authors say.
The study said there is a “lack of widespread awareness” within the General Services Administration and federal agencies about the availability and use of biobased products. One company executive, who was not named, told the researchers that the USDA Certified Biobased Product level is important but “is not providing the level of market benefit and impact at the consumer level that it was believed would emerge.”
(Agriculture Secretary Tom) Vilsack indicated that he is particularly optimistic about the growth of biobased jet fuels because of the relatively small distribution system required: About 40 airports account for 90 percent of the aviation fuel usage. “The future is quite bright,” he said.
Excerpt from Biofuels Digest: The Good News and the Bad News — Well, it’s a staggering number, isn’t it? Especially considering the “early days” nature of so many of the technologies and companies. And the numbers are rosy — that’s the good news.
But they are growing far more slowly than expected — up from $369B in 2013, that’s a growth rate of 6.5% which is impressive when compared to the anemic US economic growth rate, but is less than should be expected for an early-stage industry, and is less than China’s growth rate, to give an example of what a “tiger economy” can do.
Also, most of the impact is indirect — $266B is the indirect economic impact. Doubtless that impact is there, but since the vast majority of these products are generally substitutes for their petroleum brethren, is that really value-added to the overall economy. To use an example, switching to a clear plastic Plant Bottle definitely creates value-add for a renewable paraxylene producer and all its supply-chain partners, but we’re not sure it creates a net added value to the economy since a petroleum-based plastic bottle would have created value add for its supply-chain.
Sswitching to domestically-produced materials from imports — that’s a strong benefit. We wish this report had delved into that. READ MORE