Bioeconomy – Reorganising value chains.
Or: From oil to plants – How the chemical industry must change
If the chemical industry is to operate without crude oil and natural gas, it is not enough simply to replace the traditional raw materials with plant-based and other renewable carbon sources. The transition will fundamentally change the way raw materials are sourced, processed and distributed throughout the economy.
Instead of huge, centralised industrial plants, a networked system is emerging that calls for new approaches to collaboration.
1. The quantity problem: Why biomass cannot replace oil on a 1:1 basis
Public debate tends to underestimate the quantities of raw materials required by the chemical industry. Whilst the chemical industry worldwide incorporates only around 3 per cent of the fossil carbon extracted into its products – the rest is predominantly burned to generate energy and power transport – in absolute terms, this demand is enormous.
A study on the future of the Central German Chemical Triangle (1) highlights the scale of the issue: To produce the raw materials for the chemical complex from the cracker at the Böhlen site using only wood as a substitute for crude oil, far more than Germany’s total annual timber harvest would have to be processed – with very poor efficiency. This quantity could never be sourced, as the existing material flows are channelled into Germany’s highly efficient timber industry or used for energy purposes.
The conclusion: Biomass alone can never meet the chemical industry’s carbon requirements. However, it will be part of the solution.
2. Decentralised collection rather than pumping from the pipeline
Today’s chemical industry is based on a small number of huge hubs. Crude oil and natural gas flow steadily through pipelines to refineries and cracking plants, where they are broken down into the same basic building blocks time and again. This makes use of economies of scale and reduces costs.
Biomass behaves completely differently:
Diverse sources: Renewable raw materials grow in fields and forests and are produced as waste products in sawmills, the food industry or during recycling.
Fluctuating quantities and quality: Harvests are seasonal, storage capacity is limited and the quality of the raw materials varies.
Similar collection problems also apply to secondary raw materials from separate plastic collection schemes or even from household waste.
Instead of processing the material at a single large-scale site, initial processing must take place close to fields and forests or urban centres (secondary raw materials). Biomass is dried, shredded and broken down into its basic components. Only then are the individual materials sent to specialist processors. This requires close coordination within the network – a form of shared use and distribution. The same applies to carbon from recycling loops.
3. Harnessing nature’s contribution: creating value rather than destroying it
Would it not be economically and environmentally unwise to completely break down complex plant components, using a great deal of energy, simply to produce simple, standard chemicals from them? Nature has already created valuable structures through photosynthesis (e.g. in wood or vegetable oils).
These pre-built structures and their functionalities should be utilised as directly as possible:
Utilising entire structures: Using wood and fibres directly as stable materials in the construction or automotive industries.
Utilising specific building blocks: Using complex molecules derived from plants in products where they can demonstrate their particular benefits – for example, in fine and speciality chemicals, in medicines, cosmetics or personal care products.
It is in such high-quality products that the real economic value lies. Biomass is simply too valuable to be turned into basic bulk chemicals or to be used solely for its energy content.
4. Cost-effectiveness can only be achieved through collaboration
As a single main crop product can rarely cover the high harvesting and processing costs on its own, the system only works if all by-products are fully utilised:
Some of it is turned into high-quality ingredients for cosmetics.
Another part is used as a protein source for nutritional purposes.
A further part is broken down into simple carbon molecules and processed into basic products.
Other residues are used to generate energy.
No single company can manage this chain on its own. Farmers, forestry businesses, processors, chemical companies and waste management firms must work together in close-knit networks. Only when every by-product makes its own contribution to the overall picture will the overall concept become economically viable.
5. The unanswered question: the overall economic benefit
Among experts, it is undisputed that biomass is in short supply and must be used in a targeted manner. The real unanswered question is: How do we measure the economic benefits? How should a bio-based economy be organised? And what costs and potential for value creation are associated with it?
The bioeconomy is often viewed primarily in terms of its contribution to the transition away from fossil fuels and climate protection. But is that enough? Shouldn’t environmental factors be assessed in conjunction with economic value creation and raw material scarcity? Such an economic perspective is needed to develop the bioeconomy in Germany in a way that is both environmentally and economically sustainable.
We would like to engage in this discussion with you and lay the foundations for an economic approach to research and evaluation. Join the TransBIB Network’s expertise pool and share your expertise. LINK to register
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The authors are Romann Glowacki and Dr Manfred Kircher, both consultants specialising in bio-based economies. They share their expertise in the TransBIB competence pool.
(1) The Central German Materials Network 2035. The raw materials transition in the chemical industry. Dr Andrea Weiße1, Robert Röllig2, Lisa Plümer1, Hem Dipakbhai Thothawala1, Felix Schwarzenberger1, Mario Sternberg3, Prof. Dr Thomas Kirschstein1,4 (1 Fraunhofer IKTS; 2 BioEconomy e.V.; 3 Fraunhofer IWES; 4 RheinMain University of Applied Sciences) or link: https://www.house-of-transfer.de/wp-content/uploads/2026/04/Studie_Der_Mitteldeutsche_Stoffverbund_2035-2.pdf