Opportunities for innovation in the bioeconomy

Key EU sectors driving environmental impact

An analysis of 65 economic sectors in the EU — using an environmentally extended multi-regional input-output approach (EE-MRIO) (ETC BE, 2025) — identifies the key drivers of resource consumption and CO₂ emissions. This footprint-based analysis complements territorial approaches (see Box 1) by assigning responsibility for emissions and environmental impact based on an end-consumer principle; the approach therefore includes cross-border imports and excludes exports. The findings revealed a critical challenge: the EEA-32 region’s ecosystems provide only half of the biocapacity needed to sustain current resource use. This imbalance highlights a heavy reliance on external resources and growing exposure to global supply chain disruptions.

Estimating environmental impacts: an overview based on the ecological footprint

Nearly 31% of the EEA-32 region’s ecological footprint — an umbrella indicator for the human demand on six land components — is driven by just five of the 65 economic sectors, with construction, food and transportation playing key roles (see Table 1). The footprint analysis shows that these three economic activities place the greatest pressure on the Earth’s carbon sequestration capacity, followed by the ability of croplands and forests to produce biomass (ETC BE, 2025; Galli et al., 2023; Richardson et al., 2023). Among the key sectors, construction stands out as a major contributor, with particularly high impact on both carbon and forest footprints. This reflects the broad resource demands and embedded emissions in construction supply chains, particularly when assessed through a footprint-based lens that includes upstream impacts beyond EU borders. While a relative index (e.g. footprint per capita or per unit of GDP) could provide additional insights into environmental pressures, this analysis primarily focuses on absolute figures, highlighting the countries generating the highest impacts — which, unsurprisingly, tend to be those with larger populations and higher GDP. Specifically:

• the construction sector accounts for 9% of the total ecological footprint, with France, Germany and Türkiye being the largest contributors;
• accommodation, food and service activities represent 7%, with Italy, Germany and France as the main drivers; and
• food products falling outside of typical classification systems (i.e. ‘not elsewhere classified’ or n.e.c.) contribute 6%, primarily driven by Germany, France and Spain (ETC BE, 2025).

Overall, the ecological footprint is driven by countries with the highest total ecological demand, notably Germany, France and Türkiye. The sectors driving these national footprints also place significant pressure on external biocapacity; key inputs like forestry, cereal grains and electricity are predominantly sourced from outside the EEA-32 region (ETC BE, 2025). This reliance on resources from abroad underscores the need for more sustainable sourcing strategies and reduced dependencies on countries with high environmental impact (e.g. China, Russia and Brazil). A deeper assessment of sectoral contributions (Table 1) can inform policies to address these challenges.

Table 1. Key sectors driving the EEA-32 region ecological footprint

Carbon footprint: emissions from high-impact sectors

Carbon emissions remain a key challenge in Europe; five sectors are responsible for over 36% of total emissions in the EEA-32 region (see Table 1). The carbon footprint — a measure of CO₂ emissions from human activities — highlights construction, transport and electricity generation as the biggest contributors.

The construction sector alone makes up 10% of the EEA-32 region’s carbon footprint, mainly due to carbon-intensive materials like cement and steel (see Table 1). The carbon footprint is further increased by its heavy reliance on electricity and transport services. Germany, France and Türkiye are the main contributors, with Germany accounting for 16% of EEA-32 emissions in this sector followed by France with 14% and Turkey with 12% (ETC BE, 2025).

The transport sector follows closely, contributing 8% to the EEA-32 region’s carbon footprint (see Table 1). Italy, Germany and Türkiye lead here as well, with emissions mostly linked to domestic transport and petroleum use. Although electricity generation represents less than 1% of final demand the EEA-32 region generates around 7% of emissions, mainly due to continued fossil fuel use in power generation, especially in Germany, Poland and Türkiye (ETC BE, 2025).

It is also worth noting that countries like China and Russia contribute indirectly to Europe’s carbon footprint by supplying energy and raw materials to these sectors (ETC BE, 2025). Cutting emissions in these high-impact sectors will require targeted efforts, for example investing in renewable energy, energy efficiency, promoting cleaner transport and using lower-carbon construction materials. While these transitions are essential, it is important to recognise that producing renewable technologies is itself resource-intensive and their footprint varies depending on where and how they are manufactured.

Figure 1. Light bulb in moss - Innovating in the bioeconomy to use renewable resources sustainably while reducing human footprint

Enrico Obergefäll/Adobe stock 525995511

Cropland footprint: pressure on agricultural land

Beyond emissions, land use is another critical dimension of environmental impact. The cropland footprint — a measure of the agricultural land needed to support production and consumption — in the EEA-32 region is heavily concentrated in a few key sectors. The top five sectors contribute over 56% of the total cropland footprint (see Table 1), while accounting for just 9.2% of the EEA-32 region’s overall final demand for agricultural products and land-based goods.

Among these, the food products n.e.c. sector has a high cropland intensity - meaning it uses a relatively large amount of cropland per unit of output. Combined with its large total production volume, this results in the highest total cropland footprint across all sectors, accounting for 18% of the total cropland use across all sectors (see Table 1). It is not just the intensity per unit of output, but also the overall scale of production that drives this footprint. This sector is followed by the accommodation, food and service activities sector, which contributes 11%, with the wheat sector contributing just over 10% of total cropland use (ETC BE, 2025). The wheat sector’s cropland intensity is noticeably higher than the average across all 65 sectors, with an intensity 139 times greater than the weighted sectoral average. Germany, France and Türkiye are key contributors to the cropland footprint within the food products n.e.c. sector; Spain, Italy and Türkiye are prominent in the accommodation, food and service sector. Wheat production in Italy, Türkiye and Germany is almost entirely reliant on domestic sources, highlighting the importance of each country’s own agricultural capacity.

The dependency analysis reveals that reducing the cropland footprint in the food products n.e.c. and accommodation, food and service sectors would require targeted investments in sectors such as oil seeds, cereal grains and wheat. This is the case both within the EEA-32 member countries and globally, particularly in regions outside of the EEA-32 like Ukraine and Russia (ETC BE, 2025).

Forest footprint: demand for timber and fuelwood

In addition to cropland, the demand for forest resources further illustrates the pressure on ecosystems. The forest footprint — which measures the demand on forest ecosystems to supply goods and services — shows that just a few key sectors dominate in the EEA-32 region. The top five sectors account for 56% of the total forest footprint (see Table 1), while their final demand represents 17.3% of the EEA-32 region’s overall demand.

Forestry and construction are the largest contributors, together making up over 40% of the forest footprint. The forestry sector alone represents 22%, driven by its high demand for forest resources; construction accounts for 19%, influenced by the sector’s significant use of wood (ETC BE, 2025). As the footprint results are based on a final-demand perspective, the contributions of forestry and downstream sectors like construction are non-overlapping. The manufacturing n.e.c. sector ranks fifth in this analysis but makes a far smaller contribution of less than 6% (see Table 1).

Germany, France and Türkiye are key players in the forestry sector; they source most of their forest resources domestically. For construction, France, Sweden and Finland are the top contributors, also relying heavily on local forestry. In manufacturing, Germany, France and Türkiye depend on both domestic and external resources, particularly from Poland and Ukraine (ETC BE, 2025).

To reduce the forest footprint, focusing on sustainable domestic forestry practices and strengthening ties with external suppliers will be essential, especially for sectors such as construction and manufacturing that rely on domestic and external sources (ETC BE, 2025). Such shifts should improve supply chain resilience, but will only reduce the footprint if the sourcing practices themselves are more sustainable.

Bio-based innovations across key sectors

Building on the previous sector analysis, several high-impact sectors consistently emerge across the different components of the environmental footprint in the EEA-32 region, notably construction, food, agriculture, transportation and energy. These sectors are not only major contributors to emissions and land pressures (see Table 1), but they also represent strategic areas where bio-based innovations can play a transformative role. Bio-based alternatives offer sustainable substitutes for conventional materials and processes; they can support the shift toward circular and low-carbon practices. However, the large-scale adoption of these innovations comes with challenges. While they can reduce resource depletion, emissions and land pressures, they may also have unintended consequences, for example changes in land use that reduce carbon sinks or threaten biodiversity (Kovacic et al., 2020). A careful evaluation of their environmental trade-offs is therefore essential to ensure they contribute positively to sustainability goals.

Through a screening process based on a detailed review framework (see ETC BE, 2025), 26 key parameters across four pillars (i.e. economic context, environmental contributions, socio-economic impact and implementation potential) were used to identify and assess bio-based innovations. Some 23 innovations were selected for detailed analysis, covering the most important feedstocks and sectors and with a focus on close-to-market innovations. These illustrative innovations are derived from one or more of the five key biomass types — agricultural biomass, forestry residues, marine algae, fishery discards, and industrial and municipal waste — and are implemented across the six key sectors that drive the ecological footprint of the EEA-32 region. Figure 2 illustrates these connections, with the biomass origins shown on the left and their application in economic sectors on the right. The shortlisted innovations were assessed regarding their scalability and potential in reducing environmental pressures.

Figure 2. List of 23 bio-based innovations shortlisted for analysis

The shortlisted bio-based innovations rely on various identified biomass sources, many of which stem from waste or by-products, offering sustainable and circular solutions across industries (see Figure 2, left). The shortlisting process considered potential trade-offs to ensure selected innovations show promise for environmental benefits while minimising unintended consequences (ETC BE, 2025). These sources include:

• Agricultural biomass (eight innovations), the most used source, is derived from residues or waste from primary industries (e.g. bagasse, husk, stover and stubble) and processed food waste. This biomass plays a key role in providing alternative, sustainable material.
• Forestry residues (six innovations) come from the pulp and paper industry, and by-products of forestry activities. These materials are repurposed for creating bio-based products, reducing waste from forestry operations.
• Marine algae (six innovations) act as primary biomass, offering renewable materials for various applications, including biofuels and bio-based chemicals.
• Fishery discards (four innovations) consist of waste from the fishing industry, such as fish bones and scales, and contribute to sustainable material use and waste reduction from fish-related operations.
• Industrial and municipal waste (three innovations) include urban sludge and organic waste, which are repurposed into new bio-based products, reducing the pressure on landfills and enhancing waste management.

These diverse biomass sources underpin the implementation of bio-based innovations across multiple sectors, each with distinct ecological footprints and sustainability potentials (see Figure 2, right). The transformation of biomass into sector-specific applications demonstrates the multifunctionality and cross-cutting impact of bio-based solutions (ETC BE, 2025) as summarised below:

• Food sector (11 innovations): the most prominent application area, covering processed animal- and plant-based food products. According to ETC BE (2025), approximately 60% and 22% of the sector’s total environmental footprint are attributed to cropland use and carbon emissions, respectively. These figures underline the sector’s significant land and climate impacts. Bio-based innovations aim to reduce these effects through more sustainable production and processing techniques.
• Agriculture (three innovations): innovations focus on bio-fertilisers and agroforestry practices, which enhance soil health and resource efficiency, contributing to more sustainable farming methods.
• Construction sector (three innovations): bio-based building materials help to reduce reliance on traditional resource-intensive materials and improve sustainability in construction practices.
• Textile industry (five innovations): bio-based materials offer more sustainable alternatives to synthetic fibres, such as bio-polymer-based textiles.
• Energy and electricity sectors (six innovations): bio-based solutions include the implementation of biogas and biofuels as alternative energy sources, helping reduce reliance on fossil fuels.
• Transportation (two innovations) sector: bioenergy solutions for aviation and shipping contribute to greener mobility solutions and help reduce carbon emissions in these hard-to-decarbonise sectors.
• Other sectors (including bio-chemicals like biomolecules and biofertilisers, as well as biopolymers such as bioplastics, seven innovations) absorb a significant portion of bio-based innovations, offering environmentally-friendly alternatives to traditional materials and chemicals.

Continued research and monitoring will be essential to fully understand the long-term impacts of these innovations, particularly in terms of biodiversity, employment and overall sustainability. Additionally, international cooperation and policy alignment will be critical to ensuring that bio-based solutions deliver meaningful environmental benefits without leading to unintended trade-offs.

Environmental benefits of innovations and their alignment with EU bioeconomy goals

To evaluate how the environmental benefits of bio-based innovations connect with broader sustainability goals, it is helpful to place them within the strategic context of the EU’s evolving bioeconomy framework. Box 2 outlines key elements of the EU bioeconomy strategy and its alignment with other major European initiatives. Together, these provide essential context for assessing the relevance and potential impact of innovations considering EU bioeconomy goals.

By situating the selected 23 bio-based innovations within this policy framework, their broader significance becomes clearer: they are not merely technological solutions, but also key enablers of Europe’s transition to a more sustainable and resilient economy. These innovations have the potential to alleviate environmental pressures compared to current practices or products. Such advantages (or potential benefits) are mapped in a qualitative matrix (Figure 3), which shows how each innovation aligns with the five objectives of the EU bioeconomy strategy (2018) (blue-coloured cells) and the transformative pathways outlined by Stark et al. (2022) (orange-coloured cells). This matrix helps visualise the contributions these innovations make to both sustainability goals and systemic shifts in the bioeconomy. Among the five overarching bioeconomy objectives, it is particularly noticeable that the largest number of innovations (14) contribute to ‘reducing dependence on non-renewable, unsustainable resources’. This is followed by ‘managing natural resources sustainably’ (eight innovations). These objectives are particularly relevant for sectors like construction, chemicals and energy.

Regarding strategic transformative pathways,’ ‘increasing biomass use efficiency and new biomass uses’ receives greatest attention (12 innovations) because many innovations focus on utilising by-products and waste. The pathway ‘substitution of fossil-based resources with bio-based alternatives’ follows closely (nine innovations), reflecting the shift towards more sustainable, bio-based materials. The least represented pathway is ‘increasing primary sector productivity’, which is addressed by two innovations, specifically agroforestry and algae cultivation.

A critical knowledge gap exists regarding the employment impacts of scaling these innovations; employment assessments are available for only one innovation (wood materials in construction). However, social acceptance, particularly in relation to behavioural and consumption changes, appears to be more frequently assessed or can be inferred from other literature sources (ETC BE, 2025).

Figure 3. Matrix showing concordance of each innovation with the five bioeconomy objectives and the four transformative pathways

Challenges and scalability of bio-based innovations

Bio-based innovations play a critical role in delivering the objectives of the EU bioeconomy strategy (2018) by reducing reliance on non-renewable resources through the use of food waste, agricultural residues and forestry by-products. Some innovations, such as alternative fuels for aviation and biopolymer production from urban waste, address climate change by reducing carbon emissions while also boosting European competitiveness through the development of high-value bio-based industries.

Algae, a key feedstock, support biorefineries, bioenergy and sustainable food and chemical production. These innovations follow two transformative pathways: enhancing biomass efficiency and developing new applications to replace fossil-based resources (ETC BE, 2025). However, despite their potential, algae-based innovations often face challenges related to economic competitiveness, particularly when compared to more established biomass sources and fossil-based alternatives. These constraints limit their large-scale adoption and market integration.

The assessment of 23 bio-based innovations across the EEA-32 region reveals disparities in maturity levels. Northern European countries (e.g. Germany, Poland, the Netherlands and Scandinavian countries) lead in implementation, while southern Europe lags, with some exceptions like bioplastics from poultry feathers in France, lignin-based asphalt in Spain and wood-based materials in Slovenia. Some innovations, such as macro-algae for wastewater treatment, remain at early development stages, primarily limited to laboratory testing. Improved collaboration and increased knowledge exchange across Europe would accelerate large-scale deployment and bridge regional gaps (ETC BE, 2025).

Several key factors influence the scalability of bio-based innovations, outlined below:

• While many technologies are technically scalable, economic viability remains a challenge due to high production costs and limited market adoption. Process optimisation, policy incentives and cost reduction strategies are necessary to enhance competitiveness.
• Although bio-based solutions have the potential to reduce climate impact and land-use change, gaps remain in assessing their effects on biodiversity and ecosystem services. Some feedstocks, like algae and fish waste, present ecological risks if not managed sustainably. Full-scale deployment may introduce trade-offs, such as increased biomass extraction pressures (EEA, 2023b).
• Many innovations rely on limited or geographically dispersed bio-waste, posing logistical challenges. Some feedstocks, such as agricultural residues, may also compete with soil health needs. More precise regional data and improved supply chain coordination are needed for accurate forecasting and sustainable sourcing.
• While these innovations hold job creation potential, detailed impact assessments are lacking. Public perception and regulatory barriers must be addressed for widespread adoption. Certain bio-waste-derived materials, such as insect-based proteins or fish industry by-products, may face resistance due to cultural and consumer preferences, requiring awareness campaigns and regulatory adjustments (ETC BE, 2025).

The 23 assessed bio-based innovations span six sectors: construction, food, agriculture, transportation, energy and textiles. These innovations are most prevalent or most needed in larger EEA-32 countries such as France, Germany, Italy, Spain and Türkiye, which play a significant role in driving ecological footprints and innovation potential. Scaling bio-based innovations in southern Europe requires targeted investment and enhanced knowledge sharing to address existing disparities in infrastructure, funding availability and policy implementation. Additionally, reducing the EEA-32 ecological footprint may necessitate coordinated efforts beyond the region, given the global interconnections of supply chains and resource dependencies (ETC BE, 2025).

Replacing fossil-based products with bio-based alternatives may lead to trade-offs, such as biodiversity loss and ecosystem pressure due to increased biomass extraction (EEA, 2023b). Some strategies, like using food waste and forestry by-products, reduce resource consumption, but full-scale deployment may still impact ecosystems. Innovations that rely on agricultural and forest biomass must carefully manage soil health and biodiversity risks. Similarly, converting marine biomass into food, such as fish pulp and surimi, has strong economic potential but requires clearer environmental impact assessments.

Algal biomass shows promise as it does not compete for agricultural land and aids nutrient removal. However, further study is needed to assess its long-term impact on marine ecosystems, energy inputs required for biorefinery processes and potential trade-offs in large-scale production. Understanding sustainability thresholds for bio-based innovations is crucial to ensuring long-term viability (Tan and Lamers, 2021).

Achieving a sustainable bioeconomy necessitates:

• further research to understand biodiversity impacts, ecosystem services and opportunities for job creation;
• application of ‘what if’ scenario analyses to assess large-scale environmental effects, and to help anticipate and mitigate risks of unforeseen trade-offs, also in the longer-term; and
• sustainable supply chains and resource distribution practices that incorporate social, organisational and structural innovations to minimise resource competition. In this, engagement between different stakeholder groups e.g. governments, industry stakeholders and research institutions, is important.

While bio-based innovations support decarbonisation and sustainability, their expansion must be carefully managed to avoid negative impacts on food security and natural habitats. Applying responsible innovation principles, for example stakeholder engagement, impact assessment and informed policymaking, can help balance economic growth with environmental and social well-being, ensuring long-term viability (ETC BE, 2025).