Innovating and Governing for a Sustainable Nordic Bioeconomy

Successful and sustainable development and adaptation of bioenergy in the Nordic countries depends very largely on local and regional action. Therefore, it is essential to work with local bioenergy partnerships to understand the whole picture. What can local governments and agencies do to create a humane, socially acceptable and environmentally and economically sustainable bioeconomy in rural regions?

Municipalities have many tools at their disposal to encourage such processes and bring together potential partners. However, regional and national policies and activities are still important in providing an enabling or constraining environment for local action.

To dig deeper into the question of the role of local governments, the interdisciplinary team from NIBIO in Norway – NORDREGIO, covering Finland and Sweden, and CISA in Italy – worked with local citizens, enterprises, foresters, municipalities, and experts creating and adapting forest-based bioenergy enterprises.

We worked with local partnerships adopting and adapting bioenergy to understand the processes involved, the role of different partners, and the impacts of their activities on local economies, people, environment and climate. We found good examples of effective partnerships between local municipalities, foresters, timber processors, citizens and experts that created innovative bioenergy projects. In several cases, these projects extended far beyond bioenergy into a sophisticated bio-cluster, with bioenergy as a by-product.

Key motives for municipalities and others are the desire to be seen as ‘sustainable’ and climate-friendly, to contribute to local employment and incomes, and to create greater security of local energy supply. Although money is always scarce, municipalities can do many things to encourage sustainability processes, including bringing together potential partners, taking decisions about heating their own public buildings, regulating new buildings and investing in pipe reticulation. At the same time, EU, national and regional policies can provide greater or lesser flexibility for local action and create a policy context that can help – or hinder – local action.

The Triple Bottom Line Outcomes for Bioenergy Development and Innovation in Rural Norway (TRIBORN) research team analysed bioenergy case studies in Norway, Finland, Sweden and Italy over a three-year period from 2014 till 2017 to understand the whole picture. The interdisciplinary team brought broad viewpoints to the study. Social scientists analysed the social and economic aspects – asking: Do people support it? Does it pay? Does it help rural employment and incomes? How is it organized? Where does the money come from? What is the role of the local authorities? What kind of mix of international, transnational, national and local policies produce the best outcomes for people, the economy and the environment?

Foresters and natural scientists looked at the impacts on climate, the natural environment and landscapes – asking: Does it reduce harmful climate emissions compared with fossil fuels, and by how much? Does it harm the existing biological diversity? Does it harm the landscape and its recreational value or people’s perceptions of it? What impacts does it have on the water system? How and why do the answers to such questions vary in different countries, regions and municipalities?

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Local partnership for mutual benefit
We observed many examples in Finland, Sweden and Norway of partnerships between local foresters, enterprises such as sawmills, energy companies, local authorities and a range of experts coming together to create new district heating or biogas and biofuel systems. Typically, these entities use waste timber and thinnings, as well as municipal biowaste and other raw materials. Using this methodology, they are developing a local ‘circular economy’ to the good of the environment, people and local economies.
Local authorities commonly play a crucial role in such processes. First of all, they can provide the rationale and the motivation to create a ‘green brand’ or ‘sustainable label’ for their local communities, for example, through a strategy of relevant activities and competence. Second, they can get the stakeholders together by identifying local actors and interests and creating space and encouraging these actors to engage in a collective learning effort.

They can go on supporting such groups into appropriate partnerships to plan and invest, and helping to gain support and acceptance of the local community. Where there are information and knowledge gaps – for example on technicalities of transformation of waste to heat – they can identify people and institutions that can fill the gaps.
Most importantly, local authorities can help to build stable markets for bioenergy through their own heating choices for public buildings – offices, schools, meeting places, hospitals – through regulations for new homes and other buildings, and through investment in the central network of district heating pipes. They can also prepare tender documents in ways that help local enterprises. In these and other ways, local authorities can create a more secure and long-term climate for investors in bioenergy and other related activities.

In the wider bioeconomy context, local authorities can map the existing industrial side streams and by-products in the region in order to increase utilization of industrial waste as a substitute for raw materials by creating connections and industrial symbiosis between companies in the region.

This may contribute to developing new business opportunities based on collaborations between forestry and other industries, as in the Örnsköldsvik Industrial Symbiosis. Such collaborations can also create local research funding for the development of innovative technologies alongside applied research and linkages to high schools and universities.

Empowering local entities to reach global goals

Examples from Norway, Finland and Sweden shine a bright light on the pathway towards a sustainable bioeconomy in which local authorities are not just ‘players’ but form the keystone in building that future. Without clear and motivated action by the local authorities, the bioeconomy simply will not happen. Either local people will oppose it because to them the costs exceed the local benefits, or the essential elements for its development and adaptation will be absent.

National climate, bioenergy, forestry, energy, local development, and local government policies need to recognize this. This requires a ‘joined up’ approach by the national public authorities, and an enabling and empowering approach towards the local authorities. The bioeconomy is of course about ‘science’, but it is also crucially about locally embedded people and institutions.

The Nordic countries account for about one-third of European forest resources. They are leaders in renewable energy, CO2 taxation, bioenergy, and the development of a bioeconomy as at least a partial replacement for fossil fuels. Thus, they are important for the development of the European low carbon economy and the circular bioeconomy. Their context, interests and concerns mean that it is important that they work together in EU and international negotiations that affect the overarching policy framework shaped by the Climate Agreements and the EU’s climate and energy policies and regulations.

Forests and forest industries are important for Nordic rural and regional development, especially in peripheral regions. They are set to become even more important in the transition from a fossil-fuel economy to a bioeconomy. As managers of the forests’ bioresources and as residents in rural areas, it is crucial that the rural regions and localities get their fair share of the benefits from this development.

EU and national policy-makers have to recognize the need for an enabling framework where specific regional and local conditions can be taken into account, local authorities are empowered, and local initiative can flower. A rigid, top-down, ‘one-size-fits-all’ approach to natural, economic and social conditions may hamper the transition.

Interview with Erik Eid Hohle CEO Energigården / The Energy Farm Center for bioeconomy in Norway

In the TRIBORN study you focused on the role of local development, why did you find the local level important?
Through some decades of work within the bioenergy sector I have experienced that bioenergy projects in most cases are initiated by local initiatives and stakeholders. The ripple effects of bioenergy projects are often clearer to see on a local level.

What can bioeconomy offer to regions and local development? Is there future potential?
There is for sure a future potential, but I believe a sustainable bioeconomy is dependant on strong value chains and interactions between the different biobased products. Food-production, products from the wood-industries etc. all create large volumes of by products than can and should be used for bioenergy production. This will gain all the biobased productions, and make them more sustainable in both economic and ecological terms. At the same time this will create more jobs within refining biomass in general on a local level.

What would you say is a good starting point for a region when they wish to renew their governance or find new solutions for industries ( e.g. support bioeconomy)?
The region needs to define and organize the local initiatives and stakeholders from the start, either they are representing the public, agriculture and forest interests, industries and others that are needed to take the bioeconomy production further. Roles and tasks must be well defined and distributed.

What was the main factor holding back innovation and new solutions when you studied the rural areas of Norway?
Lack of national support programs and regulations that could stimulate local stakeholder groups, attract green capital and investors and attract the education and research institutions to enter this market. Local and regional interest groups need longterm based support and predictable conditions from the national authorities and political sector if they want the bioeconomy sector to grow.

Did you find significant differences in advancing regional bioeconomy if you compare the Norwegian examples to other Nordic countries?
Unfortunately yes; Norway has lacked the support the other Nordic countries have had from the central authorities in this sector. This is mainly due to factors mentioned in the above answers. Lack of national level support can of course also be explained by Norway’s rich energy resource situation based on hydropower, mineral oil and natural gas. Norway has because of this a longer way to go than our Nordic neighbours in order to reach the bioeconomy goals. Through programs well coordinated by the national
and regional stakeholders we can succeed, but it will take some more time to reach these goals compared to our neighbour countries.

Interview with Risto Poutiainen Region Mayor Regional Council of North Karelia, Finland

Why are you so enthusiastic about innovation in governance?
In governance, you need to renew yourself and follow what is going on around you. Good governance is part of regional competitiveness. The Nordic states have a tradition of good governance. It is our responsibility to continue that process and renew
our governance.

One always hears that money is tight, resources are scarce, and bureaucracy is abundant in the region. How do you innovate under these conditions?
Nowadays, innovative processes take place at the regional, national, and global levels through collaboration and networking between different actors. Engaging with these networks and clusters is of essential importance. Moreover, from the regional perspective, we have effectively managed to put forward public sector collaboration to ensure that scarce resources are used productively. One benefit of being a relatively small region is that we are agile and adaptable when it comes to
dealing with emerging policies.

How do you push for innovation in your administration and region?
In Finland, we are undergoing the biggest regional and municipal reforms since 1865. The idea of these reforms is to strengthen political power and self-governance in these 18 regions so that we can face the coming challenges. However, at the same time, it is a question of good and transparent cooperation between both the regions and municipalities and the regions and the state. We all have our own role to play, but we have to make everything function together. Innovative operating models and experiments are part of that process. This makes it possible to implement new and innovative ways of acting.

Why is the advancing bioeconomy important for regional development?
In our regional smart specialization strategy, we have three spearheads, and the forest-based bioeconomy is one of them. We have also carried out long-term strategical work since the 1990’s in North Karelia. In a nutshell, this strategical work focuses on the workplace and the regional economy, on the ecosystem and high level expertise, and on climate change and the environment. We have achieved good results via this strategical work and focus on the ecosystem.

What is your short- and long-term vision for the Pohjois-Karjala region in terms of bioenergy?
Our goal is to be a completely fossil oil-free region by 2030 and a heating oil-free region by 2020. Our target is to increase the annual turnover of the bioeconomy sector by one billion euros by 2025 (currently 1,7 billion euros). We also want to increase the use of wood energy to 64% (currently 51%) and the use of energy from renewables to 82% by 2020. This also means that we will have to reduce greenhouse gas emissions by 80% (from 2007 to 2030). We are currently on track to achieve these targets.

This article is part of Nordregio News #1. 2017, read the entire issue here.


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