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REPORT: Fossil-favouring rules holding back £204bn bioeconomy

The UK could scale its bio-based and biodegradable chemicals and materials sector into a £204 billion annual industry, according to BB-REG-NET.

Compostable soil plant
Image credit: Shutterstock

In order to achieve this, the network stated that the government must deliver a national framework and remove barriers than current favour fossil-based materials.

The Growing the UK’s Modern Industrial Bioeconomy report, launched yesterday (3 December 2025) in Parliament, set out a roadmap to accelerate the deployment of bio-based alternatives across packaging, textiles, construction, transport and healthcare.

The report highlighted that 10% of global greenhouse gas emissions come from producing the chemicals and materials used in everyday products, from clothing and packaging to medical equipment.

BB-REG-NET argued that replacing fossil feedstocks with bio-based and biodegradable materials is now essential to the UK’s net-zero and circular-economy ambitions.

Alistair Carmichael MP, Chair of the Environment, Food and Rural Affairs Committee and author of the report’s foreword, commented: “The transition to a circular, resource-efficient economy is one of the great industrial and economic opportunities of our generation.

“The modern industrial bioeconomy offers huge potential for the UK, providing jobs and economic growth across a wide range of market and industry sectors.”

‘Brain drain’ on UK innovation

Despite “world-leading” UK research in engineering biology, the report notes that too few university spin-outs grow into domestic manufacturing.

Many relocate to markets with more predictable regulation, fairer taxation and targeted investment support.

Without intervention, BB-REG-NET warned of a growing “brain drain” that risks exporting both innovation and economic value.

The report came after the European Commission published its Strategic Framework for a Competitive and Sustainable EU Bioeconomy, a roadmap designed to scale biotechnology, expand industrial capacity and prioritise biomass for high-value materials.

National bioeconomy framework

BB-REG-NET said the UK now needs a similarly coordinated approach. Its proposed national framework spans strategy, biomass, regulation, taxation, investment and standards, and is designed to convert early-stage research strength into industrial competitiveness.

This would include:

  • A national bioeconomy growth plan for long-term direction and accountability
  • A UK biomass utilisation hierarchy, to prioritise biomass for high-value chemicals and materials
  • Regulatory reform to adopt harmonised standards
  • Fair taxation under the Plastic Packaging Tax (PPT) and Extended Producer Responsibility (EPR) scheme
  • Investment into UK innovations

The report emphasised that the forthcoming Circular Economy Growth Plan will be a critical test of whether government intends to put bio-based innovation at the centre of its waste-reduction and material-circulation ambitions.

Jen Vanderhoven, CEO of BBIA and Project Lead for BB-REG-NET, added: “The modern industrial bioeconomy is one of the most exciting growth opportunities for the UK.

“Our report sets out that with coherent policy, fair taxation and science-based standards, the UK can become the world leader in bio-based chemicals and materials innovation and commercialisation.

“But this will only happen if we act now. We must remove the regulatory and fiscal barriers holding back innovative alternatives to fossil-based incumbents.”

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