Long-term impacts of bio-based innovation in the chemical sector: A dynamic global perspective

Biochemicals constitute a key sector in the bioeconomy, but their future expansion depends on biomass availability. This study employs an integrated global Computable General Equilibrium (CGE) modeling approach to quantify the impacts on land-use change, greenhouse gas (GHG) emissions and socioeconomic indicators, when reducing biomass conversion costs for global biochemical production by 1.5% annually until 2050. Global demand for crop- and forest-based feedstock by the chemical industry increases sharply in 2050, e.g. by 327% for wheat; driving up agro-food prices, e.g. by 3.5% for oilseeds and 3.9% for sugarcane in Brazil. Chemical output decreases in countries that rely on imported biomass for biochemical production, such as Germany, France or the United States; while it increases, for instance, in Brazil and Australia, which use mainly domestic feedstock. Increased biomass demand entails significant natural forest cover loss across South America and Asia, and, to a lesser extent, in North America. Subsequent GHG emissions from global losses in carbon stocks outweigh GHG savings from reduced fossil fuel consumption, resulting in a net increase in GHGs of 107 Mt in 2050 relative to the baseline. Results suggest that R&D investments in bio-based sectors should be complemented with coherent policies to prevent deforestation and negative impacts on the Sustainable Development Goals. •Biomass-to-chemical conversion is studied in a global dynamic equilibrium framework.•Impacts depend on biomass trade flows and countries’ feedstock availability.•Increased demand for biomass boosts food prices and causes deforestation globally.•Land-use change emissions outweigh GHG savings from reduced fossil fuel demand.•Innovation in bio-based technologies requires complementary policy action.