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What will it take to make bio-based products competitive?

November 14, 2026

From agricultural waste turned into textiles to new materials made from seaweed, bio-based businesses are finding innovative ways to create economic value. But bringing these products to market and competing with established industries takes more than a promising product. It requires functioning markets, investment, supportive policies and access to buyers. The Bioeconomy Challenge is helping create the conditions for these products and services to compete and grow.

In Kenya, pineapple leaves that would otherwise go to waste are being turned into textiles. In Ghana, companies are experimenting with seaweed-based coatings. Whilst in France, sugar beet waste is being used to make ingredients for everything from perfumes to medicines.

These examples illustrate how bio-based products can create new income streams for farmers, provide valuable materials to manufacturers and open up opportunities in entirely different industries. Bio-based products and services can also strengthen economic resilience by diversifying supply chains and reducing dependence on imports vulnerable to trade disruptions and price volatility.

Yet developing a promising product is only the beginning. Getting it into the market and making it commercially viable is another matter.

“It’s not necessarily a lack of innovation or product potential that is the biggest barrier to bio-based products, but the ecosystem and the underlying infrastructure that is not designed to facilitate their growth,” explains Indekhwa Anangwe, Africa Co-Lead at NatureFinance.

The Bioeconomy Challenge’s Market Development and Trade Working Group, co-led by UNCTAD and NatureFinance, is examining what needs to change for sustainable bio-based products and businesses to compete, grow and generate more economic value where they originate.

Bio-based products compete on an uneven playing field

Many bio-based businesses are entering markets shaped by decades of investment in conventional industries, including those based on fossil fuels.

Established competitors already have supply chains, processing facilities, distribution networks and predictable demand. They can produce at scale and offer prices that emerging bio-based businesses struggle to match.

Public policies and incentives have also helped these industries grow, making it harder for newer alternatives to compete.

A promising product is only the beginning

Even when a bio-based product can compete on quality, turning it into a viable business presents another set of challenges. Can a company produce enough to supply a major buyer? Can it secure raw materials throughout the year? And how does it finance new equipment and processing facilities before it has reliable demand?

This is the “valley of death” that many emerging businesses face. Without buyers, they struggle to attract investment. Without investment, they cannot expand production. And without the capacity to deliver at scale, securing those buyers becomes even harder.

Addressing this means moving beyond support for research, innovation and production alone. Governments have an important role to play in creating demand and improving the conditions for businesses to operate. Public procurement, targeted incentives, clearer standards and investment in processing infrastructure can all help emerging bio-based businesses compete, grow and reach markets at scale.

“We honestly need to move beyond supporting innovation and production alone,” says Anangwe. “It’s very critical that we build a functioning market where we are thinking about the products and the bioeconomy all the way from sourcing up to the point where the product gets to the users,” she adds.

Why trade rules matter, even when we cannot see them

Tariffs, certification requirements and product standards all influence whether bio-based products can enter new markets and compete on price. But some barriers begin even earlier, with how products are classified and recorded in international trade.

International trade relies on the Harmonized System (HS), a common set of customs codes used to identify goods and track trade. Many emerging bio-based products do not yet have distinct codes and are recorded alongside conventional alternatives.

Consider a country trying to build a market for a new bio-based material. If it cannot track how much is being traded or where demand is growing, how can it identify export opportunities, attract investors or make the case for policies that support the industry?

“Better classification, more visibility. If we have more visibility, then we are able to track and measure how the bioeconomy is contributing to our larger, bigger economy,” Anangwe explains.

The Market Development and Trade Working Group has begun examining HS classifications for bio-based products, including through early engagement with the World Customs Organization. Securing changes to the international system will require support from individual member countries, with better classification giving governments and businesses a much clearer picture of trade flows, emerging markets and new commercial opportunities.

Keeping more economic value where products originate

Many biodiversity-rich countries are locked into a pattern of exporting raw materials, only to buy them back as higher-priced finished products. Africa, for example, captures less than 10% of the value generated from processing its biomass. The industries, skilled jobs and profits that come with manufacturing remain largely concentrated elsewhere.

Consider agricultural waste that could be used to make textiles or packaging. Instead of exporting the raw material, countries could process it locally, supply manufacturers and build businesses around the finished products.

But that requires more than access to natural resources.

“Having the biological resources is good. But having these biological resources is not enough,” says Anangwe.

Businesses need machinery, reliable electricity, trained workers, financing and buyers willing to purchase their products. Governments can help by investing in infrastructure, putting the right industrial policies in place and creating incentives for local processing.

Crucially, the benefits need to reach beyond factory owners and investors. Farmers and communities supplying the raw materials should also gain through better incomes, jobs and opportunities to participate in these growing bio-based industries.

Stronger markets need investment and regional cooperation

“We need to start looking at the bioeconomy as an ecosystem and not just a project or an enterprise,” Anangwe argues.

This means bringing together efforts to mobilise finance and develop markets. The Bioeconomy Challenge’s Finance Working Group and Market Development and Trade Working Group have complementary roles: connecting investment opportunities with market demand, addressing market barriers and helping create the conditions for viable bio-based industries to grow.

Cooperation between countries is equally important. One country may have the raw materials, another the technology or processing facilities, and a third the buyers. Working together could help build stronger regional industries, create new trading opportunities and reduce dependence on a handful of export markets.

The Market Development and Trade Working Group has also engaged with the Global System of Trade Preferences (GSTP), including outreach at its Committee of Participants meeting in July 2026, to explore opportunities for South-South trade.

At a time when climate shocks and geopolitical tensions are disrupting supply chains, stronger regional markets and more diversified sources of supply can help build economic resilience.

From mapping opportunities to making markets work

In its first year, the Market Development and Trade Working Group identified 13 priority countries across Africa, Asia, Latin America and the Caribbean, mapping value chains spanning agriculture, forestry, marine resources and biodiversity-based products. The work is helping identify promising markets, the barriers businesses face and where investment and policy changes could make a difference.

In 2027, the focus will shift towards putting this groundwork into action. This means working with selected countries and partners to advance priority value chains, develop and support pilot initiatives, connect businesses with potential investors and buyers, strengthen regional market opportunities and progress work on HS classifications. The emphasis will be on moving from identifying opportunities and barriers to addressing them in practice.

Across the bioeconomy, businesses are already developing innovative products and services with the potential to benefit people, climate and nature. The challenge now is to give them a fair chance to compete, reach new markets and ensure more of the economic value they create benefits the countries and communities supplying the resources.