EU's new bioeconomy strategy intends to harness sustainable innovation in life sciences and healthcare

The European Commission has unveiled its bioeconomy strategy to drive green growth, competitiveness and resilience across the EU. It aims to make better use of Europe's biological, scientific and industrial resources and to develop practical solutions that support economic prosperity and circular production models.

The strategy defines the bioeconomy as "the activities that deliver sustainable solutions based on biological resources [including genetic resources] to create added value", including products, services, science and technologies. It encompasses a range of sectors from agriculture and forestry to value chains based on biomass processing, biomanufacturing and biotechnologies such as in food, health, energy, industry, ecosystem and other services. 

The bioeconomy strategy, coupled with the forthcoming EU Biotech Act and the EU's new life sciences strategy, presents opportunities for life sciences and healthcare companies – for example, streamlined and accelerated regulatory timelines, improved access to scaling-up funding, increased use of genetic resources and easier routes to market. 

What will the impact of the strategy be on life sciences and healthcare companies, and what steps can they take to ensure they are well positioned to maximise the opportunities?

Four pillars

The strategy aims to build a competitive and sustainable EU bioeconomy by 2024 through four pillars: 

• Scaling innovation and investment.
• Creating markets for bio‑based materials and technologies.
• Ensuring a sustainable biomass supply.
• Harnessing global partnerships and market access.

These pillars shift focus from "vision" to industrial deployment and scale‑up of bioeconomy innovations across the single market.

Streamlining regulatory barriers

The strategy notes that international competition and "persistent barriers in the single market" are slowing down the deployment of bioeconomy innovations and risk diverting innovation to non-EU markets. It therefore focuses on two areas: streamlining requirements and facilitating market entry, and financing.

Regulatory complexity is a particular issue, especially as it often slows down bioeconomy market entry due to uncertainty in classifying novel bio-based products that do not easily fit within existing recognised product categories. Divergent national rules and interpretations between Member States also adds further complexity and market fragmentation.

The Commission intends to simplify and increase the predictability of regulatory requirements and accelerate product authorisations through the EU Biotech Act, which will be split into two phases. The first phase will focus on health, clinical trials, in vitro diagnostics, medical devices, food and feed. It is expected to be published on 16 December 2025. The second will focus on industrial policy and is expected in the third quarter of 2026.

The Biotech Act is due to introduce regulatory sandboxes, fast-track authorisation procedures for microbial solutions for industrial use, and streamline permitting for biomanufacturing projects. The Commission will establish a European Bioeconomy Regulators and Innovators' Forum to exchange best practices relating to risk assessments of novel bio-based solutions, monitor progress and engage with businesses in the space. It will also coordinate national and EU actions to fast-track authorisations for new market entrants.

The Commission also aims to publish guidance on how to classify new bio-based products and create a single online entry point so that businesses need only submit product information once. This will help risk assessments to be better coordinated across EU agencies, avoid duplication and reduce waiting times. Additional support will be provided for small-and-medium sized enterprises (SMEs) in scaling up, with a particular focus on those developing products based on advanced fermentation.

Financing

The strategy acknowledges that bio-based technologies and industrial biotechnology are capital-intensive. They require upfront investment in research and development (R&D), demonstration and manufacturing infrastructure, but funding opportunities are insufficient for start-ups and scale-ups. The Strategy for European Life Sciences and the EU Start-up and Scale-up Strategy provide the framework to accelerate innovation, improve market access and support scale-up.

These will be complemented by other measures, such as the Commission's proposal for the next Multiannual Financial Framework (MFF) (2028-2034) increasing funding for the bioeconomy through the European Competitiveness Fund and the Horizon Europe Framework Programme policy window on health, biotech, agriculture and the bioeconomy. Programmes under the current MFF also remain available to address the bioeconomy's needs.

From 2026, the Commission will improve access to finance for start-ups and scale-ups via the Scale-up Europe Fund and other European Innovation Council instruments.

To bring these different instruments together, the Commission is planning to convene a Bioeconomy Investment Deployment Group on finance and investment, which will combine R&D, demonstration and scale-up financing across the EU and at national levels. It is intended to bring together public and private financing and create a "pipeline of bankable projects", share risk more effectively and bring in private capital.

Building lead markets for bio-based materials and technologies

The Commission intends to use public procurement to create early demand for innovative materials. It plans to support public buyers who wish to consider bio-based solutions in their procurement processes.

Particular focus is being placed on certain lead markets that the Commission considers have the potential to scale-up, including: bio-based plastics and polymers, textiles from bio-based fibres and fabrics, bio-based chemicals, bio-based construction products, bio-based fertilisers and plant protection products, and advanced fermentation technology. It will support these markets with focused measures.

Harnessing global opportunities

The Commission noted that over 50 countries have adopted bioeconomy strategies and it intends to create global partnerships to facilitate wider access to global markets for the EU's bio-based technologies, innovations, bio-materials and applications. It proposes to use trade agreements, partnerships and regulatory dialogues to support market access and shape the global bioeconomy agenda.

In the UK, the government has prioritised the bioeconomy by identifying the engineering biology industry as one of the "frontier industries" at the forefront of its industrial strategy. The government's proposed interventions to boost the industry cover similar ground to those of the Commission: accelerating regulatory reform, enhancing scale-up and manufacturing opportunities, allocating public funding to drive engineering biology R&D, connecting the engineering biology ecosystem with an Engineering Biology Innovation Network, and shaping international conversations.

Next steps for businesses

Businesses should consider taking the following steps to ensure readiness:

• Assess portfolios for exposure to the Biotech Act and the proposed measures in the bioeconomy strategy. The strategy and the Act will capture a broad range of businesses. Products with biotech elements should be identified to anticipate how they might be affected by the changing regulatory landscape. There may be new obligations imposed on certain products or components and there may be new and accelerated regulatory pathways. With respect to changing sustainability regulations, this includes both the Ecodesign for Sustainable Products Regulation (ESPR) and the Packaging and Packaging Waste Regulation, under which new obligations will be imposed on certain bio-based products or components. For example, under the ESPR, performance and durability requirements are to be introduced for textiles, and these will apply to bio-based fibres.
• Conduct "regulatory readiness audits" to identify which products or pipelines will be most affected by proposed regulatory simplification and acceleration, and the opening up of routes to market. Businesses should participate in relevant regulatory sandboxes to shape regulatory reform in this area.
• Pay close attention to the Commission's guidance on the classification of new bio-based products when it is released. Businesses should act early to identify any borderline products that may be affected by reclassification. This is particularly important for products at an early stage of development, where reclassification could affect development and regulatory strategies and budgets.
• Set up processes to prepare for accelerated regulatory and approval routes. This could include establishing internal workflows, regulatory team training, and stress-testing contract templates, ensuring that they can accommodate compressed timelines and modified compliance obligations.
• Take advantage of new funding opportunities for SMEs looking to start-up or scale-up in the industry, and keep a close watch on the launch of the European Bioeconomy Investment Deployment Group (anticipated timeline of 2026-2028).
• Ensure compliance with international frameworks relating to intellectual property and access and benefits sharing, if companies are making use of genetic resources (the strategy implies the routine utilisation of genetic resources and digital sequence information). These include the Nagoya Protocol under the Convention on Biological Diversity and the High Seas Treaty (once implemented). Attention should also be paid to the proposed relaxation of regulations relating to the use new genomic techniques in plants.

Osborne Clarke comment

The Commission's strategy and its interplay with the EU Biotech Act is ambitious. It is expected to offer considerable opportunities for life sciences companies, including streamlined and quicker health and other authorisation procedures, modernised risk assessments, increased access to scale-up funding, and procurement-led adoption of bioeconomy products and services. So far, it has been welcomed by various industry bodies.

Companies operating in the life sciences sector should expect new obligations around proportionate and accelerated approvals and more structured safety and biosecurity monitoring. These obligations are likely to extend beyond traditional product authorisation processes to encompass supply chain transparency and traceability requirements.

The Commission's focus on improving regulatory timelines for, and increasing the market uptake of, bioeconomy products is a positive sign for businesses in the industry. Similar aims have already been outlined in the UK. However, this raises the potential for regulatory divergence in key areas.

It remains to be seen how these policies will play out in practice, but businesses operating in both the UK and the EU should pay close attention to the implementation of these proposed changes and prepare for possible regulatory divergence.