Finland’s Bioeconomy Strategy: The Fab Finns set their course

Finland’s new bioeconomy strategy is out — and you can read the 55 pager here. When a country sets a strategy and puts the bioeconomy at a central place in the national plans, that’s a laudable thing, so let’s be fulsome in our praise.

Having made our praises, it is pretty straightforward to understand what a Finland bioeconomy strategy should be and must be, because everything in the bioeconomy begins with the feedstock. The very first question: what do you have that is sustainable, in abundance? The second question: what technologies are available that convert this to something useful and valuable?

If the answer to the first question is “Nothing”, you’re out of the bioeconomy, excepting as a technology supplier or investor. If the second question’s answer is “none as of yet,” you’re in the early-stage R&D business. And if you haven’t licked the question of economics because the feedstock or the process is too expensive, you’re in the late-stage R&D business of yield optimization.

If you can answer affirmatively to both questions and there are willing buyers on hand, you’re in the money.

So, a bioeconomy strategy is really a matter of answering the first two questions and dealing with the consequences. That’s all there is to it. For Finland, the answers to the first question are “water and wood”, and the answer to the second question is “yes, but not affordably just yet”. So, Finland is in the late stage R&D business of getting the feedstock costs down or the processing yields up. Or, getting to economies of scale that obliterate the problem. Or, putting together a carbon regime that gives the sustainable product an edge in the marketplace that it did not have. And that pretty much sums it up. Oh, we can complicate all this into a 40-pager, assigning roles to a cross-cutting army of stakeholders, forming consortia, supporting R&D, and so forth. But the bioeconomy is not built of meetings, it is built of molecules.

A little attention to the scale of markets goes a long ways. Nutritional supplements are wonderful things, but no one, I repeat no one, is going to take on the fearsome investments relating to process R&D, scale-up, marketing and infrastructure — on a scale that would materially impact climate or the national economy — for nutritional supplements. Throw in surfboards, vegan meats, skis, yoga pants, ink, and leather without the cow, while we’re at it.

The big markets are the ones that move the needle — fuels, plastics, power, construction materials. Things that are measured in millions of tons — that’s where national interest becomes engaged, and the multi-national interests which generally revolve around climate and security.

Good news for Finland, water and wood are relevant at a macroeconomic level. Finland’s economy could be somewhere around 25 percent based in the bioeconomy if they worked at it, more or less. Takes some doing in shifting the power mix, the market share owned by various fuel sources, and perhaps a shift in plastics.

Those are big tasks, and part of a bioeconomy strategy is honing a broad plate of opportunity into a couple of lines of sustained action. Making renewable power with wind, some rooftop solar and biogas, splitting water to make hydrogen, converting trees (and especially forest residue) to plastics and fuels. That’s a tall order, gives Finland plenty to do.

Thankfully they have a sustainable spirit, a sense of sharing the burden that is perhaps spurred by the cooperative attitudes that allow people to survive at high latitudes, and some great companies already in place, around which to build an export business and maximize domestic use. Companies like Neste (fuels), MetGen (catalysts), and UPM (forest resources). Meanwhile, about a tenth of the surface area of Finland is represented by lakes, and FIWA is a great co-operative of the water (and wastewater) industries. 

It’s not all that hard. Build R&D clusters around these companies that have already achieved commercial scale, aimed at optimizing feedstock costs and process yields. The VTT Technical Research Centre is an amazing resource. Then, create financing instruments that double or triple the normal commercial rate of deployment. A marketing consortium like Business Finland could be tapped to foster the establishment of export as well as domestic markets. Should the incumbents (such as fossil fuel companies in light-duty transport) prove unwilling — then, government has a job where it may employ carrots, or sticks, according to the combination that best fits the Finnish way of thinking.

That’s about it. It’s tempting to add market targets like 30 billion of this by 2030 or 60 billion of that by 2035. Wise governments avoid the temptation. Should the targets prove too conservative they form a bottleneck to deployment. Too aggressive, they become a target for pooh-poohing by the usual suspects. Too hard to get exactly right and they only work if exactly right.

Cost goals are worthy. “X cost by no later than Y date” will do nicely. But one has to be prepared to keep resources in reserve, just like generals keep forces in reserve when launching an offensive. There’s a temptation by stakeholders to deploy everything right away lest the government or investor group claw back the allocation at some stage. It is just so essential to keep money in the back pocket to reinforce successes, mitigate failures, push the mission to reach its stretch goals by the surgical application of supplemental funding at the later stages when success is on the line.

In the end, a good strategy is vague. “An opening to China” was the US strategy in the 1970s, and successful it was, but highly unspecific. The actors in that initiative were wise to respond to events as they unfolded, rather than form prescriptive plans that were bound to be embarrassed by circumstances as they evolved.

“The cardinal sin of a commander in the field is to form a picture”. A commander must not assume all the variables, all the counter-moves, all the outcomes. Who said it? Napoleon Bonaparte did. Circumstances change, there’s a fog in war and in innovation too.  That’s why we keep strategies specific in the goal but vague in the target.

So, Finland. Water, wood. Fuels, power, plastics. Optimize. Cluster, Finance, Deploy, deploy, deploy. That’s really what you need to know. Hopefully that’s what Finland intends. You can read about how they scripted their strategy here.