Executive Summary

The global bioeconomy is a cornerstone in the transition to a more equitable, low-carbon, and climate-resilient, nature-positive economy. The changing world is resetting our appreciation of how an equitable and sustainable bioeconomy can play a pivotal role in sustainable development. The clean tech revolution has provided one viable pathway, especially for decarbonisation. The bioeconomy provides the complementary basis through which we can secure an equitable, sustainable use of nature, particularly biodiversity, a pre-condition to a just-transition to sustainable development.

What’s needed is to turn the vision of an equitable, sustainable bioeconomy into practice. At its core, it is about how we use biological resources in sustainable ways that advance an equitable global economy. The bioeconomy holds cultural value, immense economic potential for significant job creation and economic growth. Beyond such quantitative potential, efforts must support the development of socio-bioeconomies that are localised and sustain cultural diversity embodied by the role of Indigenous Peoples and Local Communities, including farmers, in stewarding the world’s biodiversity.

The global bioeconomy is a cornerstone in the transition to a more equitable, low-carbon and climate-resilient, nature-positive economy. The changing world is resetting our appreciation of how an equitable and sustainable bioeconomy can play a pivotal role in sustainable development.

The bioeconomy is already large and rapidly growing. Today’s global bioeconomy is estimated to be valued at US$4-5 trillion, with growth potential to US$30 trillion by 2050. Despite significant data gaps and weaknesses, there is clear evidence of key growth drivers including climate, environmental, and health concerns, increasingly embodied in market preferences and
regulatory developments. National and regional bioeconomy strategies from countries such as Namibia and South Africa to Mexico and Brazil, and from India and China to Japan, the EU and the US, signal governments’ commitments to harnessing this potential.

The bioeconomy has to be collectively imagined, developed, and governed—and of course financed. The bioeconomy is a spectrum of bio-based enterprises and markets, ranging from local and regional socio-bioeconomies to the businesses, sectors, and economies that blend biodiversity and technologies—from biochemicals and bioplastics through to diverse applications of biogenetics. It is essential that this spectrum be considered as a whole. After all, we all share the same biodiversity resources which have to serve many purposes. We need a commonly agreed approach to managing the nexus between economic and livelihood priorities, and increasingly fragile biodiversity.

The bioeconomy has to be collectively imagined, developed, and governed—and of course financed. The bioeconomy is a spectrum of bio-based enterprises and markets, ranging from local and regional socio-bioeconomies to the businesses, sectors and economies that blend biodiversity and technologies—from biochemicals and bioplastics through to diverse applications of biogenetics.

Brazil has raised the policy bar in encouraging international cooperation in advancing an equitable, sustainable bioeconomy through the G20. The G20 Initiative on Bioeconomy is an exemplary recognition of the need for collective action. Notably, it seeks to converge on a set of high-level principles that can inform policy-making and market development. Such principles will focus on the normative dimensions, such as social equity, livelihoods, and sustainable prosperity, and the need for the bioeconomy to address nature and climate goals. Moreover, they are likely to highlight the need to ground the bioeconomy in good science and to secure common definitions, accounting, and metrics, as well as enabling trade rules and financing arrangements and flows.

Bioeconomy financing challenges can be considerable and have diverse roots. Private investor interest in the socio-bioeconomy can be constrained, for example, by limited scale and restricted commercial rights over traditional knowledge. Nature-intensive bioeconomy enterprises, such as certified bio-products including food, chemicals, and plastics, face unfavorable market conditions, often made worse by perverse fossil fuel and environmental subsidies. The higher-tech bioeconomy, especially early-stage businesses, often need risk capital, often blended with public funding support, which is only available in some parts of the world, restricting opportunities in many parts of the Global South.

Failing to act collectively, and ambitiously, in developing an equitable, sustainable bioeconomy into a major part of the global economy will result in the continued destruction of nature and associated negative climate and social equity outcomes.

Financing the bioeconomy is entirely possible, drawing on a wealth of existing financial instruments. Beyond conventional commercial financing channels, there are a host of existing ‘sustainable finance’ instruments that can be deployed in financing the bioeconomy. Nature credits, for example, including carbon and biodiversity credits, can both augment revenues and
provide long-term income security that de-risks and lowers the costs of capital. Sustainability-linked financing instruments, likewise, especially in corporate and sovereign debt markets, can further reduce the cost of capital, attracting both impact investors and those betting on the potential of bio-products in tomorrow’s, more sustainability-focused markets. Blended,
public-private instruments have an important role to play, highlighting the importance of development finance institutions in advancing the bioeconomy in low to middle-income countries.

Financing the bioeconomy is entirely possible, drawing on a wealthof existing financial instruments. Beyond conventional commercial financing channels, there are a host of existing ‘sustainable finance’ instruments that can be deployed in financing the bioeconomy.

Investors will be more attracted to the bioeconomy where governments and regional bodies have put in place integrated bioeconomy strategies and associated executable plans. Less likely to work are isolated bioeconomy funds, high-level bioeconomy strategies lacking market buy in or execution capability, and public support for new bioeconomy enterprises and sectors absent of links to enabling trade policy. What’s needed is an ‘integrated’ approach that for example, connects
enterprise and market development with growing public awareness, suitable infrastructure, and enabling fiscal arrangements, education, and research institutions and capabilities.

National and regional strategies and actions have to be complemented by international cooperation. International cooperation is essential for scaling the positive impacts of the bioeconomy and mitigating its risks. There is much that can be done at the national and regional levels, as witnessed by the growing number of sophisticated bioeconomy strategies. While
national and regional actions are crucial, they must be complemented by global efforts to ensure a sustainable and equitable bioeconomy. The following priorities are critical for this endeavour:

1. Principles

We cannot afford to allow the emergence of a ‘buccaneering’ bioeconomy—there is a need to converge on what public interest outcomes the bioeconomy needs to align with, an approach exemplified by the high-level principles being advanced by the G20 under Brazil’s Presidency.

2. Measuring Progress

The lack of common measurement standards and related data makes it hard to measure, or more importantly, guide progress. This is not just a matter of measuring its breadth and size but ensuring a common ‘operating system’ rooted in the science of natural capital accounting and building out through financial accounting to asset valuation and investment decisions.

3. Strategies and Plans

Strategies and plans, including core economic and industrial strategies. In many cases, these are linked to the development and enforcement of land tenure rights and other mechanisms to secure the rights, roles, and rewards for nature’s stewards, largely Indigenous Peoples and Local Communities, including farmers.

4. Financing

Principles, measurement, strategies, and trading conditions need to be locked into a range of largely existing financing instruments, raising investor awareness, mitigating risks, and opening the way to effective collaboration, in combination with action to reduce, offset, or repurpose perverse environmental and fossil fuel subsidies.

5. Pricing Nature

To accelerate on-going efforts to increase the price of nature in the global economy which will increase investor interest in the sustainable bioeconomy, through improved risk analysis, explicit pricing, regulatory developments including action by financial regulators such as enhanced application of anti-money laundering rules in addressing nature crimes.

6. Trade Rules

Financing is less likely to flow unless the right enabling trade and associated investment rules are in place to encourage principles-aligned bioeconomy-related trade. This can and should be advanced in regional, as well as bilateral and international agreements, with the associated need to address the distorting effects of perverse subsidies, as well as industrial subsidies that can have the effect of restricting low and middle-income countries to move up the bioeconomy value chain.

7. Knowledge and Capabilities

There is a need to overcome the current lack of systematic analysis of the bioeconomy, in part by
overcoming current shortfalls in data, especially to inform the development of robust
bioeconomy strategies and plans as well as providing investors with much-needed information to
support investment decisions.

Broader international policy orchestration is required to ensure effective and timely efforts. The G20 is the obvious platform to take on a broad international coordination role, given its thematic coverage, convening power and signalling influence. Brazil has begun this journey during its Presidency and there is a compelling logic to extending Brazil’s efforts into future G20 Presidencies, notably the South African in 2025, and US in 2026. Complementing this, there is a need for the imperative to rapidly expand an equitable, sustainable bioeconomy in the deliberations of other key regional and international platforms, including the UN Convention on Biological Diversity (CBD) and the UN Framework Convention on Climate Change (UNFCCC). The imminent CBD COP16 in Colombia, and UNFCCC COP30 in Brazil in 2025, offer timely
opportunities to prioritize this important topic.

---

Report produced to support the Brazilian presidency of the G20 in advancing the bioeconomy agenda. Prepared by NatureFinance and the World Bioeconomy Forum with the support of Alana Institute, Amazon Concertation, Amazon Environmental Research Institute (IPAM), Arapyaú Institute, Brazil Climate, Forests and Agriculture Coalition, Brazilian Business Council for Sustainable Development (CEBDS), Brazilian Center for International Relations (CEBRI), Brazilian Federation of Banks (FEBRABAN), Brazilian Tree Industry (IBÁ), CDP Latin America, Climate Policy Initiative (CPI), Conservation International (CI), Dom Cabral Foundation (FDC), Igarapé Institute, Insper Agro Global, Institute for Climate and Society (iCS), Interstate Consortium for Sustainable Development of the Legal Amazon, Natura&Co, The Nature Conservancy (TNC), and the World Wide Fund for Nature (WWF).