According to the Milken Institute, which has teamed up with the U.S. Department of Agriculture (USDA), the United States could replace 20 percent of petrochemical consumption with bio-based products over the next decade; creating jobs and capturing a large share of the global renewable chemical market.
Timing is everything
However it states that the key is acting soon, before the current technological and agricultural edge is lost to other nations.
Skin care products and lotions are made with biochemical, as well as disposable tableware, printer ink and numerous compounds for industrial use.
"With our strong agricultural and manufacturing sectors, the United States can lead the bio-economy and create good-paying jobs," said Joel Kurtzman, executive director of the Center for Accelerating Energy Solutions at the Milken Institute.
"It is essential we develop new financial and policy innovations to move this cutting-edge sector forward."
To generate ideas for spurring the industrial side of biotechnology, the Milken Institute, in collaboration with the USDA, convened experts from the public and private sectors in a Financial Innovations Lab.
According to a report of the Lab, “Unleashing the Power of the Bio-Economy”, participants representing finance, policy and industry identified three significant barriers to the development of new biotechnology in the United States:
- Financing new projects and bringing them to scale: The development timetable for bio-based chemicals is five to ten years, significantly longer than most investors in new technology will tolerate before seeing revenue or profits.
- Perceived market uncertainties: The relative cost difference of bio-chemicals is largely dependent on the cost of oil and competes with established petrochemical companies.
- Policy uncertainty and complexity: The regulation of bio-based chemicals is complex and sometimes seemingly more onerous than the rules for petrochemicals, which are subject to a number of long-standing exemptions. In addition, traditional means of support from tax credits, purchasing incentives, and grants are becoming increasingly less palatable to policymakers.