In Washington, the USDA reports that the total contribution of the biobased products industry to the U.S. economy in 2014 was $393 billion in value added and 4.223 million jobs. Every 1,000 jobs in the biobased industry supported 1,760 additional jobs in other parts of the economy.
The 1.528 million jobs directly supported by the biobased industry supported 2.695 million indirect and induced jobs. Similarly, the $127 billion in value added from sales by the biobased products industry generated another $266 billion in indirect and induced sales.
The projections were released in the new report, “Economic Impact Analysis of the Biobased Products Industry 2016” from the USDA, which can be downloaded here. The report includes detailed case studies of companies and their biobased products, as well as a state-by-state assessment of biobased product production and sales activity.
The Sectors analyzed
The report excluded fuels and energy productio, and focused on:
• Agriculture and Forestry
• Biobased Chemicals
• Bioplastic Bottles and Packaging
• Forest Products
About the BioPreferred Program and biobased products
A primary driver in adoption of biobased products by the US government is the BioPreferred program, established by the 2002 Farm Bill and expanded in the 2008 and 2014 farm bills. Overall, 20,000 products are registered with BioPreferred and in this most recent report USDA projects that there are 40,000 existing biobased products.
Beginning in 2005 with its first designations of six product categories, the Program has now designated 97 product categories representing approximately 14,200 products on the market today. With the Federal Government spending about $450 billion annually on goods and services, there is an incredible opportunity to increase the sale and use of biobased products as required by federal law. Executive Order 13693, Planning for Federal Sustainability in the Next Decade, increases federal agency accountability for achieving biobased purchasing requirements.
Barrels of oil avoided, emissions reduced
In this report, the research team utilized newly available data and scientific literature which, when modeled, estimate petroleum displacement of up to 6.8 million barrels in 2014. In additio, the report authors note that “using the upper range of GHG emissions reductions potential, the analysis indicates that up to 10 million metric tons of CO2 equivalents may have been reduced in 2014. Given the increasing interest in and use of biobased products, it is essential to conduct additional analyses of their potential impacts on water quality, water use, land use and other environmental impact categories.”
The Good News and the Bad News
Well, it’s a staggering number, isn’t it? Especially considering the “early days” nature of so many of the technologies and companies. And the numbers are rosy — that’s the good news.
But they are growing far more slowly than expected — up from $369B in 2013, that’s a growth rate of 6.5% which is impressive when compared to the anemic US economic growth rate, but is less than should be expected for an early-stage industry, and is less than China’s growth rate, to give an example of what a “tiger economy” can do.
Also, most of the impact is indirect — $266B is the indirect economic impact. Doubtless that impact is there, but since the vast majority of these products are generally substitutes for their petroleum brethren, is that really value-added to the overall economy. To use an example, switching to a clear plastic Plant Bottle definitely creates value-add for a renewable paraxylene producer and all its supply-chain partners, but we’re not sure it creates a net added value to the economy since a petroleum-based plastic bottle would have created value add for its supply-chain.
Sswitching to domestically-produced materials from imports — that’s a strong benefit. We wish this report had delved into that.