Lignin is a natural biopolymer found in plant cell walls and produced in large quantities worldwide as a by-product of the paper and pulp industry. Thanks to its versatile properties, lignin has numerous potential applications – for example, as a raw material for bio-based plastics, binding agents, cosmetic products, battery materials and building materials.
Lignin thus plays a central role in the development of sustainable alternatives to fossil raw materials such as petroleum or coal. Despite its enormous potential, lignin has only been used to a limited extent as a material to date. Economic and regulatory hurdles are hampering the market launch of innovative lignin-based products. There is a lack of uniform standards, and cooperation between stakeholders in the value chain still has room for improvement. This is the conclusion of the latest analysis of the lignin value chain as part of the "Bioeconomy Deep Dives" conducted by the innovation hub RootCamp on behalf of Landwirtschaftliche Rentenbank and the Federal Ministry of Food and Rural Affairs (BMLEH). The study identifies concrete solutions for how lignin can become a key raw material for the bioeconomy.
Nikola Steinbock, Spokeswoman for the Board of Managing Directors of Rentenbank:
"Lignin has the potential to become a real game changer for the bioeconomy. Its versatility and availability offer the opportunity to decisively drive forward the transition from fossil-based to bio-based raw materials. If we create the right conditions now, lignin can be transformed from a waste product into a valuable resource and make a sustainable contribution to the future viability of our industry."
Although lignin is produced in enormous quantities as a by-product of the paper and pulp industry – between 50 and 100 megatonnes of lignin are extracted worldwide every year – and is highly versatile, it has, so far, primarily been burnt for energy production. Its use as a raw material – for example in plastics, building materials or chemical precursors – is still in its infancy. One reason for this is the many challenges identified in the study: the high complexity and heterogeneity of lignin makes it difficult to develop new products and affects economic efficiency. An issue beyond this is the lack of standardised quality parameters, a scalable pilot infrastructure and a central exchange platform for stakeholders along the value chain. As a result, the material use of lignin has so far been more expensive and risky than the use of fossil alternatives. Regulatory hurdles and a lack of price incentives are also slowing down the market launch of innovative lignin-based products and making it difficult to invest in new production capacities. In addition, the stakeholder landscape is highly fragmented: start-ups, research institutions and industrial companies often work in isolation, while cooperation and transparency regarding available lignin qualities have been virtually non-existent to date.
In order to leverage the full potential of lignin, the study formulates five key recommendations for action. First, it encourages the development of uniform technical parameters and product classes through a standardisation initiative to facilitate industrial use. Secondly, the study recommends the introduction of a lignin innovation programme that promotes research, development and application testing along the entire value chain, thus making market launch more economically attractive. Thirdly, targeted production incentives for CO₂-reduced materials should be created so that bio-based products can compete with fossil-based alternatives. The study also proposes the establishment of neutral test centres for scaling lignin applications in order to bridge the gap between the laboratory and the market and reduce investment risks. Finally, the study advocates the establishment of an independent mediation platform that connects stakeholders and provides a publicly accessible lignin material register – an important step towards increasing transparency and efficiency in the value chain.
Nikola Steinbock: "Our analysis makes it clear that for lignin to truly become a key raw material for the bioeconomy, we must address the existing challenges now. Uniform standards, targeted innovation promotion and stronger networking among stakeholders are crucial to this end. The study shows concrete ways in which we can advance the material use of lignin and thus strengthen the sustainable competitiveness of our industry."
Dr Philipp Rittershaus, authorised representative of RootCamp: "Like many other by-product streams, lignin offers enormous potential for bioeconomic value creation. In order to exploit these opportunities in an economically sustainable manner, various innovation gaps must be bridged. In our collaborative DeepDive format, we were able to derive measures for future scaling by involving all stages of the value chain."
The next edition of Bioeconomy Deep Dives will focus on BioLNG (biomethane-based liquefied natural gas) and will be published in summer 2026.
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