• Energy Research

AbstractThe great hopes in Brussels that a circular bioeconomy will help bridge the growing divide between urban and rural areas and allow the hinterlands to prosper from ‘green growth’ are addressed in this article, which reflects on insights from three Nordic case studies of brown, green and blue biomass use at different levels of technology readiness. A closer examination of the forward, backward, fiscal and final demand linkages at regional level from increased biomass utilization, from eastern Finland and northern Sweden to Jutland and North Atlantic islands, suggests that linkages are and will remain relatively weak, predominantly dashing the expectations. As suppliers and exporters of natural resources, disadvantaged regions may all too easily get locked into a ‘staples trap’, where the value creation evaporates owing in part to the steep start‐up costs and the associated boom‐and‐bust cycles, which place them in a weak position vis‐à‐vis the resource manufacturers and consumers. To make the prospects of development, employment and prosperity in the hinterlands materialize, measures are needed to strengthen the regional‐level economic linkages. Regional‐level revolving funds based on benefit‐sharing instruments related to natural resources can be used to bolster economic development, as reflected in such schemes present in both China and Canada. We call for further research into whether and how such approaches can be replicated successfully by channeling revenues from biomass cultivation to regional‐scale revolving funds, with mandates to strengthen long‐term economic linkages and prosperity within the hinterlands. © 2022 The Authors. Biofuels, Bioproducts and Biorefining published by Society of Industrial Chemistry and John Wiley & Sons Ltd

In recent years, innovation systems scholars have advanced the understanding of the evolution of industries around renewable energy technologies as well as the role of policy feedback (and indeed politics) surrounding the development of domestic green industrial development policies. To take a step towards combining these literature streams, the purpose of this paper is to investigate the role of policy mixes and policy feedback in the emergence of domestic green industries. This is achieved in the empirical case of biofuels in Sweden, and the findings show that policy feedback dynamics created difficulties in aligning the national policy mix with the technology and industrial developments in the country. The resulting political uncertainty predominantly hampered the scaling up of domestic production capacity, while R&D and import of biofuels instead could grow strong. Based on this empirical case, a process model is developed to explain the role of policy feedback in the development of domestic industries, thus demonstrating how the growth of domestic industries is driven by the interplay of policy effects and various feedback processes. The findings suggest that future research into the role of policies in “green” domestic industry growth should devote more attention to the dynamics driving the co-evolution of policy, technology and industry structures. Validerad;2023;Nivå 2;2023-02-17 (hanlid)