Cefic welcomes European Commission’s initiative to boost biotech, biomanufacturing in Europe

The European Chemical Industry Council (Cefic) said the European Commission’s recent communication, “Building the future with nature: Boosting Biotechnology and Biomanufacturing in the EU,” could pave the way for an EU Biotechnology Act under the next European Commission mandate, said Chemweek.

This potential act should, however, address concerns around raw material availability and include all industries using these technologies, Cefic said.

“Cefic welcomes the communication’s acknowledgement of biotechnology and biomanufacturing’s potential to enhance Europe’s competitive edge and innovation landscape. The introduction of regulatory sandboxes represents a significant move towards a more adaptable and supportive regulatory framework, which is vital for the progression of biotech innovations,” it said.

The communication, however, overlooks a significant challenge about the availability of large quantities of feedstocks, like biomass for industrial use, which are crucial as primary raw materials for biotech-based processes, Cefic said.

In addition, the issue of higher raw material costs in Europe compared to other regions, such as Brazil or the US, poses a competitive disadvantage, and there is a crucial need to restore Europe’s competitiveness as outlined in the Antwerp Declaration for a European Industrial Deal, Cefic said.

Targeted market measures and compensation schemes to alleviate the cost pressures on European biotech firms are required to make them more competitive globally, Cefic said. These measures should encourage the use of European biomass, reducing our industry’s dependence on imports, it added.

“EU policies dealing with the bioeconomy must implement the ‘cascading use’ principle to ensure that biomass is used where it makes the most environmental, economic and social sense for circularity, value creation and jobs,” Cefic said.

Meanwhile, equally important is the need to extend support to a broad spectrum of organizations employing biotechnology, including startups, small and medium-sized enterprises, and multinational corporations, according to Cefic. “This reflects the technology’s widespread application and potential for innovation across the European economy,” it said.

We remind, circular plastics now account for 13.5% of the content in new plastic products manufactured in Europe, according to industry association Plastics Europe (Brussels). The association today published its biennial “The Circular Economy for Plastics: A European Analysis” report, which noted that the figure means the European plastics sector is more than halfway toward the interim ambition of Plastics Europe’s Plastics Transition roadmap to use 25% of plastics from circular sources in new products by 2030.

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Gazprom is sticking to its goal of achieving 100% of the technically possible level of network gasification by 2030, and is actively working with the regions via five-year programs, Deputy Chairman of the Board of Gazprom Oleg Aksyutin said in an article in the company's corporate magazine, said Interfax.

"It is expected that due to gasification and post-gasification alone, the increase in demand in the domestic market could reach nearly 20 bcm by 2030," the article says.

The long-term potential for growth in Gazprom's gas consumption due to the development of the gas motor fuel market, which has potential for both road, rail, sea and river transport, is estimated at 10 bcm.

In addition, the multi-component composition of Gazprom's resource base opens up opportunities for business diversification through the development of gas processing and the gas chemicals business.

Gazprom is implementing two new unique projects: the Amur Gas Processing Plant and a complex for processing ethane-containing gas near the village of Ust-Luga. The implementation of just two of these projects will triple Gazprom's gas processing volumes. Meanwhile, the total processing capacity of raw materials will exceed 150 bcm, Aksyutin said.

The company is guided by forecasts of growth in global gas demand, mainly due to Asian countries. "The demand for natural gas in the world will increase from 2022-2050 by more than one-third, which confirms the growing importance of this resource for the changing landscape of the global economy. The main center for gas demand will be the Asia-Pacific region, where consumption will almost double to over 1.6 trillion cubic meters in 2050, equivalent to the current consumption of North America and Europe combined. China will be the driver of gas demand growth in the Asia-Pacific region," the article says.

"Expected economic growth, combined with socio-demographic factors, will support an increase in energy demand of over 20% from 2022 through 2050 from 14.6 to 17.9 billion tonnes of oil equivalent. The structure of energy demand in the period under review will go through some significant changes. Shares of oil and coal will significantly decrease from 30% to 24% and from 26% to 13%, respectively. The share of renewable energy sources should increase to 17%, the forecast says. Gazprom believes it is important that natural gas take a leading position in the structure of the world fuel and energy balance by 2050, providing more than a quarter of the global need for energy sources," he said.

Gazprom also intends to create competitive domestic technologies in hydrogen energy. However, "the global transition to hydrogen energy is hampered by the lack of a global hydrogen market. Therefore, when developing hydrogen energy, it is important to assess all kinds of risks, observe the principle of technological neutrality, and proceed not from geopolitical preferences and popular trends, but from economic feasibility," Aksyutin said.

We remind, Gazprom Neft has opened a plant to recycle plastic packaging into secondary granules in Gatchina, Leningrad Region with annual capacity of 8,600 tonnes. The new plant will handle the complete cycle of recycling plastic packaging made of polypropylene and polyethylene into feedstock for subsequent use, the company said.

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Russia is increasing fuel production and eliminating logistics constraints following incidents at oil refineries in the country, Energy Minister Nikolai Shulginov said, as per Interfax.

"The situation on the domestic market is under constant control. Due to the incidents at oil refineries, a set of measures is being taken - increase of production and elimination of logistical constraints," Shulginov said at a meeting of the State Duma Energy Committee.

The Energy Ministry said on March 13 that "measures are being taken to ensure the necessary utilization of oil refining capacity simultaneously with the coordination of the actions of oil companies and Russian Railways."

We remind, Russia announced additional voluntary cuts in oil supply mainly in the form of production cuts rather than exports, as it faced curtailed refining capacity as well as stricter sanctions. Russia has declared plans to cut its oil output and exports by an additional 471,000 bpd in April-June in coordination with some OPEC+ participating countries.

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Shell will revisit local content approaches in its projects in Kazakhstan in order to increase the purchase of local goods and services, the Kazakh prime minister's press service said, as per Interfax.

Prime Minister Olzhas Bektenov held a meeting with Shell Plc CEO Peter Costello to discuss the progress of joint oil and gas projects, according to the press release.

"Following the meeting, the company will review its local content development program in the nearest future to increase the purchase of goods and services on the domestic market," the press release says.

Bektenov said that it was a major priority to increase Kazakh content in the ongoing projects, also including through production localization in Kazakhstan.

"Today, the local content in the project operators' activities is at an acceptable level, while the share of local content in the purchase of goods still remains extremely low. To improve the situation, we need a closer cooperation with local producers," Bektenov said.

In addition, Bektenov and Costello discussed the progress of joint projects in the oil and gas sector.

The Karachaganak expansion project is aimed at maintaining the oil and gas condensate production at 11 million tonnes per year. To this end, the operator will put into operation additional gas reinjection compressors.

The prime minister and Shell CEO also discussed the operation of the Kashagan field. Over the past year, oil production at Kashagan amounted to 18.77 million tonnes and gas output came to 11.86 billion cubic meters, gas reinjection into the reservoir totaled 5.83 billion cubic meters, the press service said.

We remind, Shell Chemicals and petrochemical company Braskem have entered an agreement to bring bio-attributed and bio-circular polypropylene to the US market. Shell will supply the feedstocks to allow Braskem to manufacture polypropylene for sustainable options to meet growing consumer demand in the packaging, film, automotive and consumer goods markets. Shell is replacing hydrocarbon feedstock with a bio-attributed and bio-circular feedstock in its polypropylene product.

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An agreement has been reached to sell the Russian business of French food multinational Danone, Health & Nutrition (H&N), to Russian investors, said Interfax.

The source said dairy company Vamin Tatarstan and Chechen Deputy Prime Minister Yakub Zakriyev, nephew of Chechnya's leader Ramzan Kadyrov, are interested in buying the business. Zakriyev headed H&N from July 2023 to March 13, 2024, while the company was under the temporary management of the Federal Property Agency by order of the Russian president.

The buyers plan to pay for the business equally, the source said, adding that this has already been decided. But "on paper, meaning officially, the company is unlikely to be split in half," the source said.

Vedomosti also reported a source close to the Russian government and a source at a financial company as saying that Vamin Tatarstan and Zakriyev are interested in Danone's assets. The latter said that the French company was forced to agree to a substantially lower price for the business.

Representatives of Danone and H&N declined to comment. A spokesman for Vamin Tatarstan said that "there is no official information" and the companies are not commenting. The press services of the government of Chechnya and Russia's Agriculture Ministry, which is supposed to approve the deal, did not respond to questions, Vedomosti said.

The Financial Times, citing non-public documents, reported in late February that Danone planned to sell its business in Russia to Vamin Tatarstan. According to these documents, Vamin is owned by Mintimer Mingazov, who was appointed to the board of directors of H&N after the company was put under state management Zakriyev was appointed to head it.

In a letter sent to Russian Agriculture Minister Dmitry Patrushev, the director of a recently created company owned by Vamin, Airat Mukhamadeyev said that it had agreed to pay 17.7 billion rubles ($191.5 million) for control of Danone's Russian business, the FT said. Of this amount, 7.7 billion rubles will go toward servicing the debt of the Russian business and the rest will go toward paying for Danone's stake in the company.

Mukhamadeyev said in the letter that the price of the transaction represents a 56% discount to the market value of the business, according to an independent appraisal cited by the company.

He also said that, in order to ensure the continuity of its former Russian business, Danone has agreed to provide support until the end of July 2025, since H&N is continuing to localize production of certain ingredients in order to maintain the "high quality of products that Russian consumers are used to."

The head of Infoline-Analitika, Mikhail Burmistrov was reported as saying by Vedomosti that the fair value of Danone's Russian business, which includes 17 plants, is at least 60 billion rubles without its brand portfolio and about 80 billion rubles with the brands. The amount of 17.7 billion rubles is therefore 67%-72% less than the fair value, making it a "super lucrative deal" for the buyers, he said.

President Vladimir Putin signed a decree in mid-March cancelling the transfer of JSC Danone Russia and JSC Danone Trade to the temporary management of the Federal Property Agency. These Russian subsidiaries of the French company were renamed H&N and H&N Trade, respectively, after they were put under state managed in July 2023.

Danone Russia closed 2022 with net profit down to 5.6 billion rubles from 8.9 billion rubles a year earlier, on revenue up to 92.9 billion rubles from 85.1 billion rubles, the SPARK-Interfax system showed. Danone Trade's net profit fell to 612.7 million rubles from 1.4 billion rubles, although revenue rose to 112.7 billion rubles from 109.9 billion rubles.

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