In Focus: WB potential and opportunities for transition to a bio-based economy

Western Balkans needs a holistic approach in order to ensure peace, security and prosperity of this diverse region. Opportunities arise from the transition to a low-carbon economy and the high potential for energy savings as well. The transition to bioeconomy represents indeed a challenge and an opportunity for growth and jobs creation.

Whilst at EU level development strategies, such as the Europe 2020 Strategy, the Bioeconomy Strategy for Europe and the Research and Innovation Strategies for Smart Specialisation (RIS3) are currently the main guiding principles to bring Bioeconomy in Europe forward, WB countries have not yet developed specific national strategies on bioeconomy , despite the relevant potential in terms of biomass availability.

During the First World Bioeconomy Forum Waldemar Kütt, head of the EU’s Bioeconomy strategy, revealed that the budget for research into food and natural resources – the European Bioeconomy cluster – will double for the period 2021-27 to Euro 10 billion. “This large increase is recognition that we are in an economy that is becoming more and more dependent on biological resources to produce food, energy and material in a way that protects the environment and also reduces greenhouse gases”, said Kütt.

In the WB region we assist, on the contrary, to a lack of supportive policies, programs and measures, specific program for bio-based industry with diversified PPP funding scheme and lack of regional bio-based industry strategies. Another problem is represented by lack of empirically derived statistics for the Bioeconomy sector in this region, as well as lack of understanding and agreement on what sectors are considered to be part of the bio-based industry.

When it comes to economic indicators, growth for the Western Balkan region is estimated to strengthen to 3.5 percent for 2018, according to the latest Western Balkans Regular Economic Report by the World Bank. The report underlines however that it is a higher but fragile growth. Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia are estimated to grow at rates between 2.5 percent and 4 percent.  

The growth is currently supported by public investment and spending. The outlook is, as written above, vulnerable and, for sustaining long-term growth, countries need domestic reforms that unleash private investment and exports. The countries moreover share common history and similar socio-economic challenges experienced. The rich Balkan heritage is a source of innovation and social entrepreneurship in the region that needs to be valorized. Transition to a low-carbon economy and the high potential for energy savings represents an occasion in such a framework. Good opportunities for production of biomass are guaranteed by the large rich biodiversity and natural resources in the Balkan region.

Renewables in the Balkans are sometimes still perceived as extremely costly and somehow also unnecessary for countries that are not prior contributors to the global emissions. The development of renewable energy sources implies a nexus approach, which will consider existing potentials, the impact of built capacities on the environment and other sectors, as well as that on the local populations. Energy efficiency and exploitation of renewables is a great potential for reducing emissions and climate change is something to be tackled through multi-sectoral cooperation. The solution is a transformation towards a greener economy, through a holistic approach that takes care of environment and social aspects.

Serbia and Bosnia & Herzegovina are among those that improved their 2018 scores in the area of green transition compared to 2017, while the scores of Albania, FYR of Macedonia, Kosovo* and Montenegro, remained unchanged, according to the European Bank for Reconstruction and Development’s (EBRD) Transition Report 2018-19. In Serbia, the cement industry is moreover ready to increase the use of biomass as fuel, which would have a positive impact on reducing CO2 emissions while the national budget fund for improving energy efficiency in 2019 will be worth RSD 500 million (about EUR 4.22 million), which was the fund’s overall value over the past four years. As far as Bosnia & Herzegovina is concerned, the Bosnia's Federation government targets a 44% share of renewable energy in the entity's electricity mix in 2020.

Western Balkans can further rely on an increasing number of clusters and cluster initiatives dealing with certain parts of the Bioeconomy value chains, as assessed by the DanubioValnet project. There are emerging innovative SMEs in phyto-pharma, bio-energy and construction sectors. Biotechnology, agriculture and food, energy efficiency are the most represented in innovation oriented R&D activities for instance of the Serbian research community.  Generally in the region there is a relatively developed agro-processing and wood-processing industry. They host the vast majority of EU small-scale farmers, and at the same time, share immense agrobiodiversity and related traditional knowledge that can boost local economies and become the pillars of mitigation of and adaptation to climate change.  Economic prosperity in rural areas is a major driver of cooperation in the Balkans, and thus necessary for the successful integration of the Western Balkan countries into the EU. This is also one of the conclusions of 2018 conference of Terra Madre Balkans network that recognized the potential of small-scale food producers and rural communities from the Balkans to be the driving force for fostering local growth and socio-economic development. Policy processes need to be integrated in the region so as to achieve a transition to diversified agro-ecological approach based on agrobiodiversity, lower dependency on external inputs, social relationships and short supply chains. In parallel also dedicated funding schemes would be welcomed to map food diversity in the Balkans and better integrate its biological, ecological, social and cultural context in the sustainable development of rural areas.

In the Balkans bioeconomy has not been promoted sufficiently on policy level. Thus, there is no strategic framework that can serve to nurture and promote bio-based industries.

Some time ago a research work by the S2Biom project covered the whole biomass delivery chain and eventually recommended a number of new targeted laws, regulations, standards and finance mechanisms

to facilitate integrated design and evaluation of optimal biomass delivery chains and networks so as  to help WB countries realise their potential to contribute to a bio-based economy by 2030.

Western Balkan countries (WBC) are currently embarking on their process of drafting smart specialisation strategies (RIS3). While Serbia and Montenegro are kicking off their Entrepreneurial Discovery Process. Cluster organizations are in position to do a lot on awareness about the potential of Bioeconomy. Thanks to valuable insight knowledge about the sector they are working with, they can provide Inputs for the development of S3 and the Action plans for the implementation of the above mentioned Strategies..

To conclude, policy processes need to be integrated in the region  so as to spread capacity and knowledge being a liaison between industry and research community. Generally speaking more awareness about the potential of bioeconomy for the production of innovative value added products needs to be also created. Meanwhile industry shall engage and provide inputs for the S3 and for the Action plan development so as to achieve a transition to a bioeconomy where to exploit the relevant potential in terms of regional biomass availability.

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