Overview of the current situation in Adrion Region

The overview of the ADRION region based on prepared national SWOT analyses and work group meetings provides the insight into the bioeconomy of the region dealt with in the project and the disparities that exist within it.

At the same time it lists the possibilities and opportunities which should be pursued with the aim to improve the regions framework condition for improving the bioeconomy RDI level, bioeconomy cluster maturity and for supporting the Biobased (BB) product market uptake.

There are many differences between the partner countries / regions involved in terms of overall economic development and the current economic situation as well as in terms of demographic development and geographical characteristics. These differences are also reflected in the bioeconomy development of respectable countries /regions.

The biomass potential of the region is high. However, its exploitation in terms of bio-economy - that is, the development of new innovative materials and products, and the replacement of non-renewable energy sources with biomass - is rather poor.

The most developed in a sense of bioeconomy is the region Umbria in Italy. The major sources of biomass in it are coming from agriculture, zootechnic industry and from residual of wood industry supply chain. Also relevant is the waste specially the food industry waste. Despite the importance of wood surface and agrifood industry in Umbria, the main bioeconomy sector in this region is represented by the bioplastic supply chain using agricultural biomasses as raw material. This supply chain is based on a strong collaboration between bioplastic industries (Novamont, Tarkett) and agro industries and it stimulated the emergence of many companies involved in the packaging value chain in the region. The region developed an advanced bio-based product industrial sector with high level of research driven innovation and integration among bio-based product industries and biomass productive sector. Several bioeconomy products have been developed and reached the market, mainly in the sector of bio-polymers. While agricultural biomass is well exploited in bioeconomy the rest of biomass available in the region such as wood is mainly used for energy purposes. The presence of large bio-industry and of bio clusters present in region (green chemistry cluster SPRING and Agrifood cluster) also have a lot of credit for good cooperation between R & D and industry, and in some cases even for the establishment of private research institutions, as well as for the creation of a Biomass research center (CRB) within the University of Perugia. The clusters are also well involved in the political creation and implementation of bioeconomy strategy in region and in the country.

Despite all these advantages, the region still faces a low level of demand for bioeconomic products and a poorly developed market for Biobased products.

According to the above said, one can imagine why the situation in other parts of ADRION region is at a much lower level. There the economy is significantly less developed, the economic standard at a much lower level and some parts of region are still facing high unemployment rate (Greece). The market consists of predominantly small sized companies, and the investment potential is low. Last but not least, the recent history and lack of political strategy and will in the direction of the bioeconomy, does not help the overall situation. We could say that this part of the region is still being introduced with the term bioeconomy, so producers and consumers have not yet recognized all of its benefits, and policy has not yet put it into their agenda. Bio-economy is relatively poorly developed, and biomass is mainly used for energy and heating plants and for the production of biogas and biofuels. In some countries, we find some good examples of using local biomass for development of new products and materials with a higher added value, but this are mostly niche products.

Slovenia and Croatia, that according to the bioeconomy RDI level and business maturity fall into categorization “drive to maturity” have developed some models of collaboration among applied research and industry for technology transfer; however the biobased product market in both countries is still largely undeveloped. Although competitive bioeconomy products in the markets exist and are sold on the market, commercially viable products are scarce. Mostly these are niche products. But the countries have some very good experiences in the research area in particular in the utilization of residues deriving from wood industry, invasive plants and aquaculture industry as a raw material for bio-based product which could be transferred in the whole area.

In Slovenia there is a sufficient amount of biomass resources such as wood, its residues and waste, as well as biomass from other bio-waste such as bio-garbage, agricultural waste, food waste, waste from livestock production, municipal wastes, sewage water etc. However most of this biomass is significantly unexploited. Wood and wood biomass are the most abundant in Slovenia (due to the fact that almost 60% of the area is covered with forest), and in addition, wood was also recognized as a strategic renewable resource at the state level. Yet its use is very poor. Due to the collapse of the wood processing industry, mostly private forest ownership and therefore lack of more sustainable forest management, most of the timber harvested is exported to neighbouring countries. The residues are mostly processed into pellets and used for energy and heat. According to the research, the amount of wood biomass, despite the improvements in ownership and the wood processing industry, would be hardly sufficient enough to trigger higher production of bio-economy products. Therefore, in the field of bioeconomy and the use of wood biomass for these purposes, it would be worthwhile to think in the direction of content route to bioeconomy by processing small scale, high added value products where high knowledge is needed and to look for opportunities for products from wood biomass in the chemical, automotive, cosmetic, construction industry.

One of the potentially very attractive biomass in Slovenia, where research is already underway, is biomass from invasive alien plants, where attempts are being made to use them in the chemical and paper industry.

There is also great potential for the use of waste biomass from bio-municipal waste, livestock waste, where certain solutions already exist (biogas, methane).

The main obstacle to the use of all these biomasses for high added value products is the lack of technology for its processing- biorefinery. However, as all biomasses mentioned, have a problem of seasonal availability and spatial dispersion an opportunity in seen in local small biorefineries and in the closure of local circles.

However, the bio-economy in the country is present in value chains (automotive, packaging, chemical), but the companies in them usually represent a small part of larger value chain and usually do not use local biomass resources but imported.

The research on the other hand is on a very high level and the direction in the production of small scale and high added value products where high level of knowledge and services is needed represents the direction in which it is worth proceeding.

Croatia has a relatively high biomass potential which besides forestry and wood industry residues, comprises residues from agriculture and biomass obtained from animal carcasses and by-products. Aquaculture and fisheries are also significant sources for biomass exploitation, especially when the total Croatian mariculture production, freshwater fish production, and fisheries catch are considered, as well as the fish processing industry. Besides meat processing industry and almost entire food industry, fish processing industry is one of the most significant environmental pollutants. The country has a well-developed aquaculture and fisheries sector as well as forestry and wood industry, but the problem is again in the consistent provision of quality biomass resources, since the availability of it is restrained by technical, economic and environmental factors.

In Region of Western Macedonia which is alo called the "Energy heart of Greece", the following biomass is available: biomass from agriculture (energy crops and residues), biomass from livestock (manure and animal residues) and wood and wood waste biomass. At the moment the majority of biomass is used for biofuels and energy production. Cultivation of energy crops is still rather in small scale and should be examined carefully taking into account competitive cultivations and energy crops demand on resources (water).

Forest biomass is not exploited sufficiently due to terrain morphology (unreachable forests) and the non-cultivation of forest trees.

Since there is no chemical industry in the region the green chemistry has not yet been exploited. But at the region there are a lot of mink farms, and some first attempts to use the mink urine as fertilizers were the first attempts toward the green chemistry although event that only reached the small scale pilot phase.

Biomass represents a significant energy potential of the Republic of Serbia. The biomass potential is estimated at 3.448 million ton and the share of RES accounts for 61%. The biggest part of this potential lies in wood and agricultural biomass (comprising also residues in agriculture, cattle breeding, fruit growing, viticulture and primary processing of fruits), while the potential of biodegradable municipal waste (comprising also waste edible oils and animal waste (waste slaughterhouse waste) in a lot lower.

However, while the degree of utilization of woody (forest) biomass potential is relatively high (66.7%), the potential of agricultural biomass is slightly used (~ 2%), while the potential of biodegradable municipal waste is not used at all. But having in mind the existing structure of industries in Serbia, there is no doubt that agriculture; including both plant-biomass and animal breeding are the fundamental for the development of bioeconomy in the country, as well as in the region of Vojvodina, which is countries basis for agriculture.

Food and feed procesing industries are also very important, while forestry, pharmaceutical industry chemical and biodegradable materials industry, construction industry and bio-energy sector are not to be neglected.

Albania has high amount of biomass production. Due to the significant forest surfaces, large number of processors and timber suppliers and co-production of sawmills, the wood biomass is abundant. Also agricultural waste coming from large areas of cultivation of grain crops, corn, soybeans, and significant areas of fruit trees, olive trees (cultivated for oil production) and citrus fruits represent another source of biomass with high exploitation potential.

Despite the significant biomass source in the country, its exploitation is very low and benefits for bioecomy at this stage are small. Wood biomass in mainly used for heating, while there is no use of agricultural waste biomass at the moment.

Two highly potential sources of biomass were defined in the country which could be interesting for the development of bioeconomy. Due to high production of olive oil and a network of olive oil extraction plants (about 400 factories) a high amount of waste such as pits, the vegetal waters, or pulp is produced which represent a huge burden for the environment and are responsible for the pollution of great number of water and ground ecosystems.

Another source of potentially interesting biomass also comes from agriculture, more specifically from poultry business where different kinds of poultry biomass can be found. From chicken manure, which is currently in the sense of bioeconomy in some good practise cases in the country dries and turned into organic fertilizer in agricultural economies, instead of just disposed in the field; and in the waste of poultry farms and egg farm. The potential is seen however in the transformation of it into bioenergy. Another opportunity is seen in using the eggs which are out of standard, cracked or broken by establishing a plant where such eggs could be converted into frozen or powdered form which can be used in food production.

The research part varies among countries but is mostly very good in all involved regions. A wide range of knowledge and research organizations makes a good basis for knowledge exchange between countries within the region. The problem present in most countries is however a transfer of this knowledge from research institutions to industry and integration of research outputs to industry and then further on to market (the exception here is Umbria, where the link between the biopolymer industry and the research organizations is very good and the level of research results transferred to industry is higher).

The poorly developed markets and low demand for bio based products; low awareness of the full potential of bioeconomy among entrepreneurs (SMEs) and consequently the weak industry's interest in investing in bio-economy are on the top of the list when we try to find the reasons for it. Lack of innovation culture among entrepreneurs and therefore lack of their incentives and funding the research are also very common. The biggest challenge for the industry in the region remains the development of new markets as well as the high investments that usually accompany the transition to the production of bio-based materials and products.

One of the characteristics of this area which is not helping the situation is also the weak linkage between industry and research organizations. These linkages could be significantly improved by clusters. The positive example can be seen in Umbria, where the presence of bio clusters has made huge improvements in regional entrepreneurship and their understanding of bioeconomy. In other parts of the region bio clusters are rear and usually still in initial stage. Therefore, their role as a catalyst for bioeconomy has not yet been fully developed and their progress is not yet visible. However, traditional industrial clusters (potentially dealing with bio-based industry) are present and can be the driving force in the development of bioeconomy clusters.

One of the areas where cluster active involvement could also have a huge impact is policy. Region seriously lacks supportive policies in this area. While policy is slowly getting to know bioeconomics, its behaviour is too slow and too decisive for more visible progress (excluding the Umbria region). None of the region countries, with exception of Italy, have bioeconomy strategy. In some regions bioeconomy has been partially integrated into the Smart Specialization Strategy and in some much more focus has lately been given to the attempts to adopt the circular change concept. Also noticed in majority of region is that the area of bioeconomy, which is indeed large, is usually dispersed among various governmental bodies, which complicates and slows down the management of the area. In all countries it was observed that communication to policy makers is a challenge. Their involvement in the projects is usually negligible, which makes it difficult to make progress. Often we are witnessing non-cooperation among different levels of government and among different ministries, which should work closely together if the country wants to make such big moves as is the move toward more sustainable and circular bioeconomy.

Most of the countries are included in several EU programmes for funding which gives them the opportunity to obtain funds for research projects in this area. However all countries are lacking the EU and national funds for transfer of research outputs to application level and for development of new products. Heavy bureaucracy associated with obtaining EU funding discourages industry to enter the EU and national projects and partnerships, which further slows down the transfer of research results to application-level and the development of new products.

The biomass applications with higher added value in the region are rear (except in Umbria where different biomass is used for production of different kind of plastic products) and biomass is usually used for energy and heating. The cascade use of biomass is rear or almost none existing. There are more reasons for it but one is certainly the existence (or better the non- existence) of biorefinery in the respected countries.