EU-initiated impact fund for a bio-based circular economy

The end of the previous month caught us by surprise when the European Circular Bioeconomy Fund (ECBF), which the European Union initiated in bioeconomy and circular economy, received more funds than it initially set out to attract. Originally they targeted receiving €250 million but raised about .€300 million. The fund aims to finance growth companies in the bioeconomy and biobased circular economy. The money will be allocated among such companies to strengthen the commitment to the integration of environmental, Social, and Governance (ESG).

As the ECBF states as their mission on the website, “While visionary founders often lack the necessary growth capital to scale their solutions internationally, the ECBF closes this financing gap in cooperation with private and public investors.”

According to the experts, a new wave of bio revolution changes from our old linear and fossil-based economy to a sustainable, circular, bio-based economy. The new fund is backed by investors including Landwirtschaftliche RentenbankAllianz FranceInvest NLGCFirmenich, Stellar Impact (a vehicle managed by Telos ImpactDr. Hans-Riegel HoldingBellevue Investments and companies such as NesteNestléBÜFANRW.BANKVolkswohl BundCorbionDr. Hettich BeteiligungenKoehler Group and Wortmann Family Office. The group of investors now includes 25 shareholders.

Initiated by the European Commission (EC), The Venture Capital Fund was established in 2020 with a pledge of €100 million from the European Investment Bank (EIB). The commitment incentivized additional investors to invest. What was outstanding regarding the collection of the money was that the fund managed to attract €50 million more than expected, showing a particular interest in the new economic model. By mobilizing and educating private and public investors alike and providing a background for scientific and strategic decision-making, the ECBF significantly contributes to a climate-neutral Europe. This is definitely a positive sign.

The Co-Founder and Managing Partner of ECBF, Michael Brandkamp, commented on their success: “We are proud and grateful to have received investors’ trust from seven different countries to advance this important growth sector. Exceeding our initial target of €250 million is a big commitment. With the necessary expertise and the strong dedication of the ECBF team and the right partners, we can make our vision of a bio-based economy a reality. Many European founders have enormous potential to help ride the wave of the Bio Revolution, and we will do our utmost to support them. This is the only way we can significantly support a sustainable economy – and thus a secure future for all”.

Christian Kettel Thomsen, Vice-President at the European Investment Bank, said: “We are very pleased to have been an anchor investor of the European Circular Bioeconomy Fund, which provides crucial financing for innovators in the bioeconomy sector. From water stress management solutions to insect-based ingredients or the valorization of orange peels that would otherwise go to waste, the first investments made by the fund show the potential of the bioeconomy sector to help address the environmental challenges of our time and contribute to the European Union’s transition to a carbon-neutral and circular economy.”

The bioeconomy offers excellent opportunities to achieve a competitive, circular and sustainable economy with a solid industrial base and less dependence on fossil carbon.

A sustainable bioeconomy will contribute to climate change mitigation, like oceans, forests, and soils are significant carbon sinks and contribute to harmful CO2 emissions.

Andrea Nyilas is a Life Cycle Assessment and Sustainability Consultant and a Sustainability and Environmental journalist. She holds a Master of Science degree in Environmental Sciences and Policy from Central European University, in addition to a Master of Arts degree in Economics from the Corvinus University of Budapest. She is particularly interested in circular economy, natural resource management, and waste reduction.