Report presenting the results of all simulations and documentation of the model

This report has developed a series of system dynamics models to analyse the impacts of circular bio-based systems in key sectors like construction, plastics, chemicals, and textiles. These models assess environmental, social, and economic dimensions, capturing the complex relationships between factors such as material demand, consumption patterns, and life cycle impacts. Starting with drivers like population dynamics, the models trace a material's journey through manufacturing, use, resale or reuse, recycling, and disposal, highlighting the role of energy consumption and the importance of resource efficiency. The models also focus on product management strategies, particularly the cascading use of bio-based materials, to promote sustainable resource utilization. Each model is tailored to a specific region—Italy for textiles, the Netherlands for chemicals, and Germany for construction and plastics—allowing for detailed analysis and targeted policy development. In essence, these models serve as platforms for scenario simulations, exploring policy interventions that align with EU and regional sustainability goals. This report analyses three scenarios—Business as Usual (BAU), Bio-Transition, and Bio-Revolution— to assess the impact of various policies aimed at advancing a circular bio-based economy (CBBE) across four key industries: construction, plastics, textiles, and chemicals. The BAU scenario projects current trends without additional CBBE ambitions, while the Bio-Transition scenario incorporates existing policy objectives to facilitate gradual progress. The most ambitious scenario, Bio-Revolution, introduces new and aggressive goals to expedite a comprehensive transformation towards full circularity and bio-based practices. Across all industries, policies are categorised into demand-side initiatives, materials and energy efficiency improvements, material switching strategies, and enhanced recycling efforts. In the construction industry, emphasis is placed on increasing building renovation rates, improving material efficiency, substituting cement with wood-based materials, and maximising waste recycling to transform the sector into a carbon sink. The plastics industry focuses on reducing single-use plastics, boosting material efficiency, adopting bio-waste feedstocks, and significantly increasing recycling rates to lead the shift toward circularity. The textile sector targets extended product lifetime, improved energy efficiency, greater incorporation of bio-based materials, and robust waste collection and recycling systems to minimize environmental impact. Lastly, the chemicals industry aims to enhance both material and energy efficiency, increase the use of biobased inputs, and improve waste management practices to achieve zero pollution and align with EU sustainability targets. Each scenario from BAU to Bio-Revolution represents a scaling up in the ambition of the intervention options, reflecting increasing levels of commitment towards achieving a sustainable and circular bio-based economy. In addition to industry-specific scenarios at country level, a more comprehensive national scenario was simulated that reflects CBBE objectives beyond the industrial subsectors analysed. In this case the focus is on advancing towards full use of renewable energy sources in the power generation mix, including solar, wind, and biomass, and increasing the adoption of biofuels in the transport sector, all while aligning with stringent EU sustainability targets. This scenario also anticipates a notable improvement in energy efficiency, guided by EU directives, and a significant rise in waste recycling rates driven by enhanced policies. Crucially, the interplay between industrial practices and national strategies is considered, revealing how advancements in specific industries can influence and be influenced by national, cross-sectoral policies. By examining these interactions, this report aims to uncover the potential impacts and trade-offs of varying degrees of commitment to green technologies and practices, and related policy interventions, providing a comprehensive understanding of how these dynamics could shape the future energy, economic, and environmental landscapes in Germany, Italy, and the Netherlands. The results indicate that transitioning to bio-based products (Bio-Transition) present a compelling economic opportunity, as the value addition generated by the CBBE significantly surpasses that of the BAU scenario. The Bio-Revolution scenario, which is characterized by a higher ambition both in curbing overall consumption and in increasing the use of bio-based products, further enhances this potential. Despite implementing more stringent measures to reduce consumption, the ambitious transition to bio-based products results in a more favourable economic and environmental outcome compared to the BAU scenario. This shift, however, requires increased biomass, the supply of which can be sourced in different, as well as sustainable ways. The following points outline the key findings and implications of this transition, emerging from the simulations created with the Green Economy Model (GEM): Higher Value Addition from the CBBE: ● Bio-based products and practices show increased value addition compared to the Businessas-Usual scenario, both directly and via the reduction of externalities (e.g. air pollution and its impact on human health at the macro level). ● Despite existing policies aimed at reducing overall consumption (e.g. via conservation, efficiency, extended product lifetime), the value addition from the bio-based industry eventually more than offsets the loss of value resulting from lower consumption. Demand for Biomass: ● Recent studies show that the growing demand for biomass can be met sustainably by utilizing marginal and abandoned land, avoiding deforestation and preserving productive agricultural areas (Elbersen, Eupan , Meijinger , Georgiadou, Goumas , & Chiaramonti, 2024)These underutilized lands provide an opportunity to expand biomass production while contributing to soil restoration, carbon sequestration, and environmental conservation. Strategic land-use planning, supportive policies, and community engagement are essential to achieving this balance and aligning biomass production with broader sustainability goals. ● Germany, the Netherlands, and Italy can meet their biomass production needs by repurposing abandoned and marginal lands, despite limited land resources. Our analysis shows that the biomass required in the CBBE scenarios can be produced using a portion (half to one third) of the already available marginal and abandoned land. This considers that, even if abandoned land is less productive than prime agricultural land, the total available land in each country is sufficient to meet the forecasted biomass demand. By strategically utilizing this land, these countries can ensure a sustainable bio-based transition without compromising agricultural productivity, nor increasing deforestation, supporting environmental conservation and soil restoration. Trade-offs and Implications: ● While the economic benefits of bio-based products and practices are significant, careful consideration is needed to balance land use and environmental impacts, as well as reduced economic activity in relevant production and consumption sectors. ● Complementary policy to facilitate the transition (e.g. from cement to wood-based construction materials) and sustainable land management strategies may be necessary to mitigate potential negative effects on employment, as well as on forests and agricultural land, habitat quality, and avoid indirect land use changes.