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Short summary: The proposal to reduce the VAT rate for e-books will not necessarily reduce the current price of e-books, as publishers may not pass this reduction to the end consumer. On the other hand, if the VAT increases for print products, this will inevitably reduce print book sales, as consumers will need to pay more. If the proposal leads to replacing printed books with e-books, we would find it unfair and not aligned with the general interest. These concerns should be addressed by maintaining the current reduced VAT rates for paper books, newspapers and periodicals and ensuring an equal and neutral treatment for both technologies. In addition, the Commission should encourage Member States to make full use of the possibility to reduce the VAT rate they apply to both printed products and e-books.
As of 5 September, Sylvain Lhôte is at the helm of CEPI. Appointed by CEPI’s Board in June 2016, Sylvain brings 25 years of government and public affairs expertise working with leading material technology and manufacturing industries on climate and energy policies, sustainability and industrial affairs, as well as competition and international trade issues.
Prior to joining CEPI, he was Vice-president Governmental Affairs and Business Development in the EMEA Region for Alcoa, the aluminium and metals engineering group. He previously directed EU and sustainability affairs for the Borealis Group, in the base chemicals and plastics industry. He also chaired FleishmanHillard’s Public Affairs practice in Europe and headed its environment department advising major trade associations and industries in the field of sustainability policies and PA strategies. Sylvain started his career in parliamentary cabinets at the European Parliament and at the French National Assembly.
A French national, Sylvain studied political sciences, international law and business administration at Strasbourg and Paris-Sorbonne Universities and post-graduated cum laude in European Administration at the College of Europe in Bruges.
This article was written by Petri Vasara from Pöyry Management Consulting. Pöyry is one of our Partners. Read more about them here.
Our industry faces exciting times ahead. The world needs a ‘recarbonisation revolution’ of global material flows as we must increase biomass and decrease non-renewable materials such as metals and minerals in the movement of global trade. Additionally, recarbonisation requires moving from fossil carbon to biocarbon. The re-carbonisation revolution offers a simple way to define the bioeconomy: re-carbonise materials, de-carbonise energy.
Society’s concern with climate change has shaped our language to always refer to “decarbonisation” policies and attempts to create a “low carbon economy”. Whilst these sentiments are honourable in their intention, they neglect a key truth – that carbon is the basis of life. The only area where the removal of carbon should be focused is in fossil-based carbon fuels. Outside of fuel - in a vast range of other materials - carbon is needed in the form of biomass to create a truly renewable and sustainable loop.
What does a recarbonisation revolution mean for our industry?
Imagine a solution where we recarbonise just 1% of the market of some key global material flows. The packaging market in 2013 was worth 590 billion euros alone with plastics and fibre producing 220 and 215 billion euros in turnover respectively. Therefore, if 1% of the packaging market which is currently created from fossil plastics was moved to biopackaging, it would equate to 6 billion euros in turnover.
Likewise, plastics correspond to about 300 million tons, meaning that moving 1% from fossil plastics to bioplastics would represent about 3.5 billion euros of new biobusiness. Finally, imagine that 1% of the global volume of fossil fuels is taken and substituted with biomass, and that biomass is processed further in the forest industry – this would mean a green recarbonisation of a part of the world’s materials flows. This could result in an estimated 30 billion euros of annual new biobusiness.
When combined these three 1% substitutions would provide an estimated 40 billion euros per annum to a new sustainable bioeconomy. The calculations above can be debated of course, but they are indicative of the potential size of the opportunity.
Whereas in the past this level of change may have been implausible, new developments in technology and materials sciences have made it both possible and desirable. Four materials - Lignin, sugar, nanocellulose and graphene - stand out as examples of where recarbonisation can be truly effective. The first three are carbon-based and graphene is pure carbon meaning they have the potential to radically change the materials world.
As well as being technically possible, there is also a demand for these solutions from some of the world’s global brands such as IKEA, Toyota, Procter & Gamble and Coca-Cola. All have their own reasons for pushing biomaterials, both for functional or cost-related reasons. For example, biocomponents in cars weigh and cost less than metal or companies view it as a way of building brand image.
No revolution is easy, and the ‘recarbonisation revolution’ is no exception, but there is scope for many winners. Whilst alliances across sectors are not yet the norm, a transformation of the value chain must and is taking place. Companies operating in our industry must think ahead and align to benefit from this transformational shift.
We are only at the beginning of the recarbonisation journey and in many applications plastic is still much more competitive. However, even achieving a mere one per cent of the market would be a business worth billions of euros; the foundations are solid for this to happen and companies and brands from different sectors are already seriously looking at a biobased future. This is a positive sign for us all as the recarbonisation journey gets underway.
On the occasion of ‘BioEconomyUtrecht2016’, the fourth Bioeconomy Stakeholders’ Conference, the European Bioeconomy Alliance (EUBA) calls on the EU to lead a worldwide transition towards a renewable, low-carbon economy. Europe has all of the means necessary to become a global leader in the bioeconomy, if its potential is realised and embraced by European policy makers.
The bioeconomy encompasses the sustainable production of renewable resources and their conversion into food, feed, fibres, materials, chemicals and bioenergy through efficient, innovative technologies. It is already worth €2 trillion annually and employs 22 million Europeans, but holds the potential to significantly further boost competitiveness and long-term economic growth. At a time when the pressure is on to deliver on post-Paris climate commitments, the bioeconomy offers a viable solution to today’s fossil carbon equivalents and has the potential to save up to 2.5 billion tonnes of CO2 per year.
In advance of today’s conference, EUBA members, together with other stakeholders in the growing bio-based community have produced a set of recommendations on how Europe can promote bio-based products in public procurement. The report, which will be launched today in Utrecht, outlines what needs to be done at EU, regional and national level to create dynamic new markets for home-grown, EU-sourced bio-based products.
Speaking on behalf of the EUBA, Pekka Pesonen, Secretary General of Copa and Cogeca commented: ‘We are at a pivotal moment in the development of the European bioeconomy. The EU’s strategy is currently being reviewed and we find that we have both great achievements to celebrate as well as some much needed new measures to put in place. Financial tools are needed to boost innovation and investment in existing and new bio-based value chains. In addition, boosting public procurement of bio-based products is one example of how Europe can develop renewable product markets and accelerate the move towards a circular bioeconomy.’
Also speaking on behalf of the Alliance, Jamie Fortescue, Managing Director of Starch Europe, a member of the Primary Food Processors added: ‘Europe has, in abundance, the renewable resources, industrial base and know-how to lead its own bioeconomy revolution. What we now need, to attract more contributors and investment, is open and inclusive discussion underpinned by unwavering, cross-sectoral, political commitment. We want to look back at Utrecht in five years’ time and marvel at what has been achieved in the interim.’
EUBA member EuropaBio’s Industrial Biotech Council Chair, Stephan Tanda, concluded: ‘With the steadfast support and leadership of the European Institutions, the Member States and their regions, huge progress has been made over the past five years with many national authorities setting out their own tailor-made roadmaps towards vibrant and regenerative home-grown bioeconomies. In addition, thanks to the development and launch of the EU’s first ever Bio-based Industries Joint Undertaking for €3.7 billion, ground-breaking cross-sectoral innovation has been given a new lease of life. As a result, we will see new partnerships forming across borders and disciplines in the development of smarter, more sustainable products and processes. The potential is there to be harnessed and, with the right support, Europe will lead the way in the development of a world leading bioeconomy.’
Note to the Editor
BioEconomyUtrecht2016 is taking place 12-13 April in Utrecht, the Netherlands, and is hosted by the Dutch Ministry of Economic Affairs and the European Commission, under the auspices of the Dutch EU Presidency. The aim of the conference is to explore how Europe can enhance its bioeconomy and input into the review of the European Bioeconomy Strategy that will take place in 2016.
Commission Expert Group for Bio-based Products, Working Group Public Procurement of Bio-based Products, Recommendations 2016:
Innovating for Sustainable Growth: A bioeconomy for Europe: http://ec.europa.eu/research/bioeconomy/pdf/bioeconomycommunicationstrategy_b5_brochure_web.pdf
A number of the sectors which are fundamental to the implementation of the EU Bioeconomy strategy, represented by the European Bioeconomy Alliance (EUBA), are identified as being subject to the risk of carbon leakage under the Commission’s proposal for the ETS post 2020. These are: starch, oilseeds and protein meals, pulp and paper and sugar. The EUBA supports this approach because there is indeed a real risk that these sectors may relocate their operations outside the EU in the absence of a global level playing field on energy cost.
However the EUBA is also aware of the so-called tiered approach towards carbon leakage put forward by the French and British governments. Under this proposed approach some of the sectors being exposed to carbon leakage would receive more compensation than others. In practise this would mean that fossil-based industries, who are intrinsically most carbon-intensive, would receive 100% free allocation, to the detriment of the sectors which are contributing to the bioeconomy and thus reducing the EU’s fossil fuel dependence (who would receive from 0% to a maximum of 80% free allocation). This would create a competition distortion, undermining efforts to develop renewable bio-based materials to replace fossil fuel based ones.
The objective of the EU Emission Trading System is to combat climate change and reduce greenhouse gas emissions. The objective of the European Commission’s bioeconomy strategy, endorsed by both the Council of the EU and the European Parliament, is that fossil fuels should be replaced with “sustainable renewable alternatives as part of the shift to a post-petroleum society”. The objectives are and must remain complementary and consistent.
According to OECD, “the full climate change mitigation potential of biotechnology processes and bio-based products ranges from between 1 billion and 2.5 billion tons CO2 equivalent per year by 20301”.
Both the EU ETS and the EU bioeconomy strategy are fundamental to the European Union's policy to reduce industrial greenhouse gas emissions cost effectively. The EUBA therefore congratulates the European Commission for being consistent and strongly warns against any attempts by Member State governments to undermine that consistency.