Bio-based and Applied Economics BAE Bio-based and Applied Economics 12(4): 367-377, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Copyright: © 2023 Lasarte-López, J., Grassano, N., M’barek, R., Ronzon, T. Open access, article published by Firenze University Press under CC-BY-4.0 License. Firenze University Press | www.fupress.com/bae Citation: Lasarte-López, J., Gras- sano, N., M’barek, R., Ronzon, T. (2023). Bioeconomy and resilience to eco- nomic shocks: insights from the COV- ID-19 pandemic in 2020. Bio-based and Applied Economics 12(4): 367-377. doi: 10.36253/bae-14827 Received: June 20, 2023 Accepted: September 26, 2023 Published: December 31, 2023 Data Availability Statement: All rel- evant data are within the paper and its Supporting Information files. Competing Interests: The Author(s) declare(s) no conflict of interest. Editor: Silvia Coderoni ORCID JLL: 0000-0002-3627-5466 NG: 0000-0003-1507-7476 RM: 0000-0002-3205-3938 TR: 0000-0001-8554-627X Bioeconomy and resilience to economic shocks: insights from the COVID-19 pandemic in 2020 Jesús Lasarte-López1,*, Nicola Grassano2, Robert M’barek1, Tévécia Ronzon1 1 European Commission, Joint Research Centre (JRC), Edificio Expo, Calle Inca Garcilaso, 3, 41092 Sevilla, Spain 2 Department of Economics, Universidad Loyola Andalucía, Avda. de las Universidades s/n, 41704 Dos Hermanas, Spain *Corresponding author. E-mail: Jesus.LASARTE-LOPEZ@ec.europa.eu Abstract. Using the latest release of employment and value added numbers in the bio- economy sectors, we conducted an analysis on the performance of the EU bioecono- my during the COVID-19 pandemic in 2020. Our findings point to a possibly higher level of resilience of the bioeconomy sectors compared to the overall economy. While employment in the bioeconomy registered a similar (but slightly sharper) decrease to the total EU average (-1.7% vs. -1.4%), the value added fell substantially below average (-0.4% vs. -4.0%). The more contemporary biomass-processing sectors (chemicals and pharmaceuticals, as well as bioelectricity) performed better than the more traditional sectors (such as food or textiles). At the Member State level, we observe a high degree of heterogeneity in sectoral performance. By discussing these estimates alongside pre- vious qualitative insights from the related literature, we emphasize the relevance of the bioeconomy not only for environmental sustainability but also for socioeconomic resil- ience. Keywords: COVID-19 shock, bioeconomy, socioeconomic indicators, European Union, green transition, resilience. JEL Codes: Q57, O44. 1. INTRODUCTION The bioeconomy is composed by all those economic activities that depend on the use of biological resources. This definition includes not only all biomass-producing and processing sectors, but also related services (European Commission, 2018). The launch of the EU’s Bioeconomy Strategy in 20121, along with its update in 20182, positioned the bioeconomy as both a 1 Innovating for sustainable growth: A bioeconomy for Europe. https://op.europa.eu/en/publica- tion-detail/-/publication/1f0d8515-8dc0-4435-ba53-9570e47dbd51 2 A sustainable bioeconomy for Europe: Strengthening the connection between economy, society and the environment: updated bioeconomy strategy. https://op.europa.eu/en/publication-detail/-/ publication/edace3e3-e189-11e8-b690-01aa75ed71a1/language-en/format-PDF/source-149755478 https://doi.org/10.36253/bae-14827 http://www.fupress.com/bae https://doi.org/10.36253/bae-14827 https://orcid.org/0000-0002-3627-5466 https://orcid.org/0000-0003-1507-7476 https://orcid.org/0000-0002-3205-3938 https://orcid.org/0000-0001-8554-627X mailto:Jesus.LASARTE-LOPEZ@ec.europa.eu https://op.europa.eu/en/publication-detail/-/publication/1f0d8515-8dc0-4435-ba53-9570e47dbd51 https://op.europa.eu/en/publication-detail/-/publication/1f0d8515-8dc0-4435-ba53-9570e47dbd51 https://op.europa.eu/en/publication-detail/-/publication/edace3e3-e189-11e8-b690-01aa75ed71a1/language-en/format-PDF/source-149755478 https://op.europa.eu/en/publication-detail/-/publication/edace3e3-e189-11e8-b690-01aa75ed71a1/language-en/format-PDF/source-149755478 368 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Jesús Lasarte-López et al. key enabler and a result of transitioning to a green and fair economy in the EU. As a result, synergies have been identified with the overarching European Green Deal strategy, which aims to address climate and environ- mental challenges. Specifically, the Bioeconomy Strategy can help evaluate and address trade-offs between policy objectives and competing resource uses, promoting both environmental sustainability and socioeconomic gains and resilience (European Commission, 2022). The significance of the bioeconomy in enhanc- ing resilience to external economic shocks has gained considerable attention in both academic and policy debates, particularly in light of recent major events. In 2020, the COVID-19 pandemic strained global supply chains under stress, due to shifts in demand and labour shortages (OECD, 2020; Ozdemir et al., 2022; Galana- kis et al., 2022). More recently, the Russian invasion of Ukraine led to price increases in basic resources like food and energy products (Ramanauske et al., 2022). In this context, the strategic importance of the bioecono- my has become evident in its potential to create shorter and more circular bio-based value chains, thus reduc- ing dependence on imported basic resources (Farcas et al., 2020; Galanakis et al. 2022; European Commission, 2022). An additional step in this direction is the Coun- cil of the European Union’s Conclusions on the oppor- tunities of the bioeconomy, approved on April 25, 2023. These conclusions emphasize the potential of the bioec- onomy to address challenges such as climate change, fos- sil fuel dependency and food security, as well as contrib- uting to increased resilience3. Despite its recognized strategic importance, the lit- erature examining the role and economic performance of the bioeconomy under the aforementioned events is still scarce and inconclusive. Some studies provided qualitative insights into the economic impact of these events on the bioeconomy (see Fritsche et al., 2021; Gala- nakis et al., 2022; Kulisic et al, 2021 or Woźniak & Tyc- zewska, 2021). An ex-ante quantitative assessment was also provided by González-Martínez et al. (2020). How- ever, to the extent of our knowledge, an ex-post analysis on the impact of these events on the bioeconomy is still missing in the academic literature. In June 2023, the EU-Bioeconomy Monitoring Sys- tem4 (EU-BMS, hereinafter) was updated with data on employment and value added in the bioeconomy sector 3 Access to the press release and related documents: https://www.con- silium.europa.eu/en/press/press-releases/2023/04/25/promoting-a-more- sustainable-competitive-and-resilient-europe-and-boosting-rural-areas- council-approves-conclusions-on-the-opportunities-of-the-bioeconomy/ 4 Access to the EU- Bioeconomy Monitoring System: https://knowledge- 4policy.ec.europa.eu/bioeconomy/monitoring_en for 2020. This fact opens the possibility of analysing the performance of the bioeconomy during the pandemic. Therefore, this article aims to fill the gap in the literature by using the latest release of the EU-BMS to answer the following research questions: – What was the impact of the pandemic on the bioec- onomy in the EU and its Member States? – Did the bioeconomy sectors exhibit greater resilience compared to the overall economy and other sectors? – Are there any drivers or common sectoral patterns explaining the performance of the bioeconomy across countries in 2020? This short article is structured as follows. Section 2 describes the methodology to estimate jobs and value added in the EU bioeconomy. Section 3 presents and dis- cusses the main results. Section 4 concludes. 2. DATA AND METHODOLOGY The sectoral scope of this study comprises all bio- mass producing and transforming activities, namely the primary sectors and the bio-based manufacturing and electricity ones presents the selected sectors in this study and their contributions to the bioeconomy. The indicators on employment and value added in these sectors from the EU-BMS are computed follow- ing the methodology proposed by Ronzon et al. (2018, 2020, 2022) and Lasarte-López et al. (2023a). The pro- cess involves two main steps. In the first step, data from Eurostat is collected and cleaned for sectors fall- ing within the bioeconomy scope defined by the EU’s Bioeconomy Strategy (European Commission, 2018). National Accounts data is used for primary sectors (nama_10_a64_e for employment and nama_10_a64 for value added), while Structural Business Statistics (sbs_na_ind_r2) is used for bio-based manufacturing and electricity. In the second step, output bio-based shares are applied to those sectors considered as ‘hybrid’ (their out- put can contain biomass but also other non-bio-based materials). These shares inform about the proportion of final production by sector made of biomass. Therefore, this approach assumes that the quantity of jobs and val- ue added from each sector allocated to the bioeconomy is proportional to its bio-based output. The bio-based shares are initially prepared at the product level (for each item in the PRODCOM product classification). The proportion of biomass incorporat- ed by all products is estimated using expert knowledge and scientific literature review. This information is then aggregated to determine sectoral bio-based shares at https://doi.org/10.36253/bae-14827 https://www.consilium.europa.eu/en/press/press-releases/2023/04/25/promoting-a-more-sustainable-competitive-and-resilient-europe-and-boosting-rural-areas-council-approves-conclusions-on-the-opportunities-of-the-bioeconomy/ https://www.consilium.europa.eu/en/press/press-releases/2023/04/25/promoting-a-more-sustainable-competitive-and-resilient-europe-and-boosting-rural-areas-council-approves-conclusions-on-the-opportunities-of-the-bioeconomy/ https://www.consilium.europa.eu/en/press/press-releases/2023/04/25/promoting-a-more-sustainable-competitive-and-resilient-europe-and-boosting-rural-areas-council-approves-conclusions-on-the-opportunities-of-the-bioeconomy/ https://www.consilium.europa.eu/en/press/press-releases/2023/04/25/promoting-a-more-sustainable-competitive-and-resilient-europe-and-boosting-rural-areas-council-approves-conclusions-on-the-opportunities-of-the-bioeconomy/ https://knowledge4policy.ec.europa.eu/bioeconomy/monitoring_en https://knowledge4policy.ec.europa.eu/bioeconomy/monitoring_en 369Bioeconomy and resilience to economic shocks: insights from the COVID-19 pandemic in 2020 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 the 2- and 4- digit levels of the NACE classification (see Ronzon et al., 2017, for details). The latest release of the EU-BMS indicators was conducted with a different data pre-processing than previous releases. This new pre-processing incorporates additional economic information (when available) to estimate missing values. Specifically, National Accounts estimates on employment and value added by sectors are used as auxiliary variables to compute missing values in Structural Business Statistics (see Lasarte-López et al., 2023a, for details). 3. RESULTS 3.1. General trends in the EU The EU bioeconomy provided 17.16 million jobs in 2020 (8.3% of total employment) and contributed with 664.82 billion euro value added (4.9% of total GDP). These figures reflect a decline in employment above the EU average in comparison to 2019 (-1.7% vs. -1.4%), and a slight decline in the value added with regard to GDP (-0.4% vs. -4.0%). The decline in employment and value added are explained by differences in behaviours by sector. Figure 1 illustrates the growth rates of employment and value added and their breakdown by sector. As for employ- ment, most sectors registered negative growth in 2020, with the primary and the traditional biomass-transform- ing sectors (particularly, food and textiles) explaining a large portion of the total decline. Regarding value added, the impacts are mixed; while more traditional bio-based sectors exhibited a negative impact (excluding wood and furniture manufacturing sectors), the bio-based chemi- cals and pharmaceuticals, plastics, and rubber sectors continued to grow in 2020. 3.2. Analysis by Member States The heterogeneous behaviour is also manifested in the evolution of the bioeconomy for the 27 EU Mem- ber States (MS). Section 3.2.1 describes the employment dynamics in the bioeconomy sectors by MS, while Sec- tion 3.2.2 focuses on value added by MS. Table 1. Sectoral scope and bio-based share by sector. Sectors NACE codes Aggregated bio-based share for the EU27 Primary sectors Agriculture, forestry and fishing A01, A02, A03 100 Food, beverages and tobacco C10, C11, C12 100 Bio-based textiles C13, C14, C15 42.0 Bio-based manufacturing and electricity Wood products and furniture С16, С31 72.4 Paper C17 99.5 Bio-based chemicals, pharmaceuticals and rubber C20, C21, C22 13.7 Bio-based electricity D3511 5.8 Own elaboration from Lasarte-López et al. (2023b). -3,0% -2,5% -2,0% -1,5% -1,0% -0,5% 0,0% 0,5% 1,0% 1,5% 2,0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Employment -2,0% -1,0% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Value added Figure 1. Growth rate of employment and value added in the EU bioeconomy, and decomposition by sector. Source: Own elaboration from Lasarte-López et al. (2023b). https://doi.org/10.36253/bae-14827 370 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Jesús Lasarte-López et al. 3.2.1. Employment in the bioeconomy by MS Table 2 shows the growth rate of employment in 2020 for the bioeconomy, the total economy, primary sectors, the bio-based manufacturing and electricity sec- tors, and the total manufacturing sector. Despite bio- based employment registering a slightly higher decrease than total EU employment, there were 15 MS where employment in the bioeconomy sectors overperformed that of their respective aggregated economies. This is particularly true for Finland, France, Latvia, Poland and Slovakia, where employment in the bioeconomy grew while decreasing (or remaining stable) in the overall economy. Conversely, Luxembourg and Malta registered notably better employment growth in the total economy compared to the bioeconomy. Splitting the bioeconomy employment into agri- culture and bio-based manufacturing and electric- ity, we see that both subsectors registered a decrease in employment in 9 MS. The consequent overall negative employment performance of the bioeconomy is aligned with the total economy (besides the already mentioned Luxembourg). Conversely, only Finland and Latvia reg- istered growth in employment for both subsectors. In the remaining 16 MS, the two subsectors registered vari- ations of opposite signs. In 10 cases, the overall perfor- mance of the bioeconomy was driven by the primary sector (4 decreases and 6 increases). In the other 6 cases, the bio-based manufacturing conditioned the sign of the overall bioeconomy (3 increases and 3 decreases). Within the EU manufacturing sector, the decrease of bio-based employment in 2020 was less pronounced compared to the overall manufacturing sector. Bio-based employment outperformed total manufacturing employ- ment in 17 MS, with 8 MS even experiencing growth in bio-based employment while the overall manufacturing sector witnessed a decrease. However, the remaining 9 MS registered greater declines in bio-based employment than the total manufacturing. Only Ireland recorded growth in both categories, although the growth rate was lower for bio-based employment. Figure 2 decomposes the aggregate growth rate of bio-based manufacturing and electricity sectors. The figure reveals that there are no clear patterns observed across MS. However, two sectors appear to explain most of the growth in the top-performing MS: (1) wood prod- ucts and furniture (Eastern and Northern countries such as Latvia, Slovakia, Estonia, Finland and Slovenia, with the exception of Spain) and (2) the manufacturing of food, beverages and tobacco (France, Denmark and, to a lesser extent, Finland and Spain). In contrast, for countries experiencing negative growth in employment, the main drivers are the food, beverages and tobacco sectors, as well as the bio-based textiles sector. Nota- bly, Bulgaria, Portugal and Romania show a significant impact from both sectors. Food, beverages and tobacco explains most of the negative growth in Germany, Swe- den, and Luxembourg, while the bio-based textiles man- ufacturing sector experienced particularly poor perfor- mance in Italy. 3.2.2. Value added in the bioeconomy by MS The analysis of value added draws a slightly differ- ent picture (see Table 3). As for the EU, the value add- ed growth of the bioeconomy outperformed that of the overall economy in 22 of the 27 MS. Within these coun- tries, the added value of the bioeconomy grew while the total economy decreased in 12 of them; both magni- tudes increased in Lithuania, Bulgaria and Denmark and decreased in the remaining 7 MS. In the other 5 MS, the bioeconomy performed worse than the total economy: in Luxembourg and Ireland by growing less than the total economy; in Finland and Romania by decreasing more. Only in Sweden value added in the bioeconomy decrease while it slightly increased in the total economy. The growth of value added in the two main subsec- tors of the bioeconomy (agriculture and bio-based man- ufacturing and electricity) exhibited the same sign in 15 MS, with 11 of them experiencing positive growth and being negative in the other 4. In other 4 cases, the val- ue added in primary sectors grew while it decreased in the bio-based manufacturing, resulting in all cases in a negative overall decrease of the bioeconomy, except for Spain. As for the remaining 8 MS, the bio-based manu- facturing sector recorded growth in valued added while there was a decrease in agriculture. The combined effect of these trends resulted in an overall growth for the bio- economy, except in Hungary, Portugal, and Sweden. When comparing the evolution of value added between both bio-based and total manufacturing, the direction of value added growth for the two sectors was the same in 11 MS (7 negative and 4 positive). In 15 of the remaining 16 MS, the bio-based sector grew while the total manufacturing decreased. The only exception was Greece. It is worth noting that, according to Table 3, countries with a more positive or less negative GDP trend tend to be positioned in the upper half of the table when ranked by the overall growth of bioeconomy sectors, particu- larly in terms of value added. Assuming that the decline in a country’s GDP is related with the pandemic’s impact (including lockdown implementation and the effectiveness of measures taken to mitigate the shock), this national https://doi.org/10.36253/bae-14827 371Bioeconomy and resilience to economic shocks: insights from the COVID-19 pandemic in 2020 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 effect on the performance of the bioeconomy partially explains the observed heterogeneity across countries. The dynamics of value added within the bio-based manufacturing and electricity subsectors also present a high degree of heterogeneity. Figure 3 shows the contri- bution by sector to the growth rate of value added. Simi- lar to employment, two sectors play a substantial role in driving positive growth in bio-based manufacturing for the top-performing MS: (1) wood products and furniture (Latvia, Lithuania, Estonia, Slovakia, Slovenia and Lux- embourg) and food, beverages and tobacco (Lithuania, Slovakia, Bulgaria and The Netherlands). Among the countries with a lower (negative) growth in value added, the food beverages and tobacco sectors were also impor- tant drivers. These countries are located in Southern and Eastern Europe, i.e., Croatia, Italy, Romania, Spain and Greece. Within them, Croatia experienced the poor- est performance in these sectors, which explain most of the decline in value added within its bioeconomy. In contrast to employment, there is a generalized positive impact across countries from the bio-based chemicals and pharmaceuticals, plastics and rubber, as well as the bio-based electricity sectors. Table 2. Employment change (%) in the bioeconomy sectors and in the overall economy by MS (2020). Note: The categories identified by each typology of arrow are defined following the same classification than Mubareka et al. (2023), where a negative performance in 2020 (below -1.0%) is flagged with a red arrow, a stable one (between -1.0% and 1.0%) is remarked with a yellow arrow, and a good performance (above 1.0%) is assigned a green arrow. Source: Own elaboration from Lasarte-López et al. (2023b). https://doi.org/10.36253/bae-14827 372 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Jesús Lasarte-López et al. 3.3. Sectoral trends across the pandemic The next step is to identify if there were common break in sectoral across countries due to the disrup- tion of the pandemic. For this purpose, we conducted a paired sample t-Test to determine whether the growth of bioeconomy sectors by country in 2020 differed signifi- cantly from the average growth during the period 2014- 2019, which covers the last expansionary phase of the business cycle in the EU27 before the COVID-19 shock. The results are shown in Table 4. For the overall bioeconomy, there are no significant breaks in employment trends, which contrast, with the statistically significant negative difference observed in the total employment variation. However, for value add- ed, we identify a statistically significant difference in the growth rate of 2020 compared to the 2014-2019 average, although this difference is of lesser magnitude than the observed for total value added. In the two big sectors of the bioeconomy, a com- mon break in trends is identified for both employment and value added in the bio-based manufacturing and electricity sectors, but not for Agriculture, Forestry and Fishing. The greater relative weight of employment in the primary sector in the bioeconomy can explain the absence of a statistically significant break in total employment within the bioeconomy. As for value added, the lower relative contribution of primary sectors would not offset the negative impact of bio-based industries, therefore explaining the statistically significant break in the total bioeconomy. From a sectoral point of view, the differences in the growth rate of 2020 across countries are statistically sig- nificant for the more traditional biomass-processing sec- tors, namely, the manufacturing of food, beverages and tobacco, bio-based textiles and, only for employment, the paper industry. Regarding bio-based chemicals and pharmaceu- ticals, plastics and rubber, we find no statistically sig- nificant differences in the growth trends of this sector across the EU countries. As spotted in Section 3.2.2, the contribution of this sector was positive for most coun- Figure 2. Decomposition of growth in employment in the bio-based manufacturing and electricity sectors (2020). Source: Own elaboration from Lasarte-López et al. (2023b). -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% LV SK FR EE FI DK ES SI IE M T HU CY NL AT CZ BE HR LT PL EU 27 EL LU SE IT DE RO PT BG Bio-based electricity Liquid biofuels Bio-based chemicals and pharmaceuticals, plastics and rubber (excl. biofuels) Paper Wood and furniture Bio-based textiles Food, beverage and tobacco Total bio-based manufacturing and electricity https://doi.org/10.36253/bae-14827 373Bioeconomy and resilience to economic shocks: insights from the COVID-19 pandemic in 2020 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 tries in terms of value added. This is probably explained by the crucial role of the bio-based pharmaceuticals sec- tor during the COVID-19 pandemic, which was reflected in the economic performance of this sector. The existence of similar breaks in certain sectors suggests that the observed heterogeneity in the overall performance of the bioeconomy across MS could also be partially explained by their sectoral composition. Thus, the specialization of some countries in traditional bio- mass-processing sectors (particularly food and textiles) could have had a negative effect on the aggregate perfor- mance of their bioeconomies (e.g., the cases of Hungary, Italy, France or Spain). 3.4. Comparison of results with previous studies The COVID-19 pandemic and the measures tak- en to contain it had strong economic consequences in most countries worldwide. In the EU MS, there were widespread falls in production and employment lev- els (OECD, 2020). Besides the effects of restrictions, the collapse of oil prices also hindered the develop- ment of the bio-based economy (Chulok, 2021). Accord- ing to Fritsche et al. (2021) and Galanakis et al. (2022), the effects of the pandemic on the production and distribution of biomass value chains were primarily explained by changes in the demand structure by sector and labour shortages in the supply side, due to mobil- Table 3. Value added change (%) in the bioeconomy sectors and in the overall economy by MS (2020). Note: The criteria that define the orientation of each arrow is the same as in Table 2 (see note). Source: Own elaboration from Lasarte-López et al. (2023b). https://doi.org/10.36253/bae-14827 374 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Jesús Lasarte-López et al. ity restrictions. However, an expert survey conducted by Kulisic et al. (2021) revealed that biomass supply chains demonstrated overall resilience to the pandemic shock: no significant changes in the level of aggregated production were identified for the bio-based indus- tries, and potential productivity gains were anticipated. These findings align with the results in Section 3. The decline in value added was less pronounced than that of employment within the bioeconomy, as well as in com- parison to GDP. Galanakis et al. (2022) highlight that the primary and food manufacturing sectors (NACE codes A01, A03, C10 and C11) experienced labour shortages and sharp decreases in demand from food services, which led to income decreases. González-Martinez et al. (2020) antic- ipated a higher resilience in the agriculture sector, and limited impacts on the agri-food sectors overall. These findings are also consistent with our own analysis, as no breaks in trends are found for the primary sectors across MS, and the decline in employment and value added in the agri-food sectors generally remained below the EU average for the total manufacturing sector. The textiles industries (C13, C14 and C15) expe- rienced an increase in demand for protective clothing (e.g., masks) (Galanakis et al., 2022). However, according to our analysis, this foreseeable increase did not have a positive impact on the demand of bio-based products, which is affected by the general decline of the sector. This decrease was more pronounced in those countries most affected by the pandemic in the first stage (there- fore, implementing stronger restrictions). For instance, the textile sector in Italy registered an important decrease in jobs and value added. Galanakis et al. (2022) also identified the paper, wood products and furniture industries (C16, C17 and C31) as mainly affected by changes in demand (decrease in wood demand for construction, increase in wood products for home and pallets for distribution). Based on our estimates, the net effect on employment and value added was positive, especially in the main wood- Figure 3. Decomposition of growth in value added in the bio-based manufacturing and electricity sectors (2020). Source: Own elaboration from Lasarte-López et al. (2023b). -15% -10% -5% 0% 5% 10% 15% 20% LV LT EE SI SK BG LU NL DK PL BE HU DE M T AT IE SE CZ PT EU 27 FR CY EL ES RO FI IT HR Bio-based electricity Liquid biofuels Bio-based chemicals and pharmaceuticals, plastics and rubber (excl. biofuels) Paper Wood and furniture Bio-based textiles Food, beverage and tobacco Total bio-based manufacturing and electricity https://doi.org/10.36253/bae-14827 375Bioeconomy and resilience to economic shocks: insights from the COVID-19 pandemic in 2020 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 producing economies (Nordic and Baltic countries). The increase in the price level of wood as commodity is behind this growth, which conditioned the performance of their overall bioeconomies. The bio-based chemicals and pharmaceuticals, plas- tics and rubber industries sectors (C20, C21 and C22) witnessed a generalised increase in demand for prod- ucts such as ethanol and alcohols (for disinfectants). An increased demand for bio-based plastics is also identi- fied, given the higher usage of one-single use plastics products (Galanakis et al., 2022, Fritsche et al., 2021, Woźniak and Tyczewska, 2021). These facts, besides the crucial role of the pharmaceuticals sector during the pandemic, are consistent with the superior performance of these sectors in the EU and most MS in 2020. 4. CONCLUDING REMARKS The economic consequences of the major events occurring since 2020 (the COVID-19 pandemic and, more recently, the Russian invasion of Ukraine war) underlined the potential role of the bioeconomy not only to achieve environmental sustainability but also socio- economic stability. Our results shows a higher level of resilience of the EU bioeconomy compared to the over- all economy in the initial stage of the pandemic. While employment in the bioeconomy declined similarly to the EU average in 2020 (-1.7% vs -1.4%), value added fell substantially below (-0.4% vs -4.0%). As the primary sec- tors remained stable, this greater resilience was driven by some bio-based sectors such as chemicals, pharma- Table 4. Mean and variance of sector growth by period, and results of the t-Test for Paired Two Sample for Means. Employment Value added Average growth 2014-2019 (Variance) Change 2020 (Variance) P-value Average growth 2014-2019 (Variance) Change 2020 (Variance) P-value Total Bioeconomy -0.0030 -0.0078 0.3277 0.0384 0.0179 0.0335** (0.0003) (0.0005) (0.0002) (0.0025) Agriculture, forestry and fishing -0.0142 -0.0123 0.8012 0.0282 0.0271 0.9633 (0.0004) (0.0013) (0.0008) (0.0139) Bio-based manufacturing and electricity 0.0125 -0.0049 0.0231** 0.0480 0.0185 0.0070*** (0.0004) (0.0009) (0.0003) (0.0032) Food, beverage and tobacco 0.0157 -0.0133 0.0001*** 0.0417 0.0066 0.0044*** (0.0004) (0.0006) (0.0005) (0.0029) Bio-based textiles -0.0133 -0.0635 0.0004*** 0.0267 -0.0806 0.0008*** (0.0004) (0.0035) (0.0009) (0.0179) Wood and furniture 0.0094 0.0193 0.5213 0.0601| 0.0698 0.8012 (0.0015) (0.0036) (0.0010) (0.0313) Paper 0.0136 -0.0060 0.0189** 0.0521 0.0014 0.0546* (0.0006) (0.0011) (0.0009) (0.0147) Bio-based chemicals and pharmaceuticals, plastics and rubber 0.0318 0.0376 0.6077 0.0736 0.1059 0.1528 (0.0009) (0.0040) (0.0030) (0.0157) Bio-based chemicals and pharmaceuticals, plastics and rubber (excl. biofuels) 0.0339 0.0379 0.7581 0.0854 0.1151 0.1928 (0.0009) (0.0050) (0.0129) (0.0174) Liquid biofuels 0.0457 0.4952 0.2420 0.1477 0.5688 0.2406 (0.0454) (3.2358) (0.0793) (3.1269) Bio-based electricity 0.1429 0.1352 0.9169 0.1324 -0.1690 0.3203 (0.0300) (0.0866) (0.0351) (2.0624) Total economy 0.0168 -0.0120 <0.0001*** 0.0466 -0.0251 <0.0001*** (0.0001) (0.0002) (0.0008) (0.0014) Total manufacturing and electricity sectors 0.0119 -0.0216 ≤0.0001*** 0.0539 -0.0368 <0.0001*** (0.0001) (0.0003) (0.0026) (0.0027) Note: The null hypothesis is rejected with a significance level of 10% (*), 5% (**) or 1% (***). Source: Own elaboration from Lasarte-López et al. (2023b). https://doi.org/10.36253/bae-14827 376 Bio-based and Applied Economics 12(4): 333-366, 2023 | e-ISSN 2280-6172 | DOI: 10.36253/bae-14827 Jesús Lasarte-López et al. ceuticals, bioelectricity and wood products, which par- tially offset the negative impact on more traditional bio- mass-processing sectors (mainly food, beverages, tobac- co, and bio-based textiles). At the MS level, the bioeconomy performance was quite heterogeneous, although a potential effect of the country overall economic performance was identified. Furthermore, the disruptions observed in traditional biomass-transforming sectors (food, textiles and paper) were generalised across countries, while bio-based chemicals and bioelectricity kept their positive growth trends in most countries. These findings suggest that the sectoral composition of the bioeconomy could also have an impact on its overall performance at the country lev- el, negatively affecting those countries with higher spe- cialization in the aforementioned traditional biomass- transforming sectors. The lower relative impact of the pandemic shock on the bioeconomy provides empirical evidence for the academic literature and the policy documents support- ing the need for the EU to reinforce the bio-based val- ue chains (e.g. Farcas et al. 2020, Galanakis et al. 2022; European Commission, 2018, 2022), so as to fulfil sus- tainability goals while enhancing socioeconomic resil- ience to economic shocks and disruptions in the global value chains. These insights are subject to some limitations, caused by the data availability. For 2021 onward, the available information is still scarce, due to long pub- lication delays of some of the required data sources (14 months in the case of the PRODCOM survey, needed for the product-level bio-based shares; and 21 months for Structural Business Statistics, the main data source for employment and value added in the bio-based manu- facturing and electricity sectors). As the year 2020 is the most recent data point available in our dataset, it is still not possible to analyse the full impact of the pandemic on the bioeconomy (i.e., including the recovery in 2021) nor of the Russian invasion of Ukraine starting in 2022. An additional limitation is that the current composition on the jobs and growth indicators for the bioeconomy only considers biomass-producing and transforming sec- tors. The bioeconomy services are foreseen to be inte- grated in the future, following the methodology from Ronzon et al. (2022b). These limitations also pave the way for future research. The in-depth analysis of the aforementioned events in 2021 and 2022 would be useful to further sup- port (or not) the hypothesis of a stronger resilience of at least some bioeconomy sectors to economic shocks. The integration of services into the said indicators would also provide an opportunity to analyse the performance of the tertiary sector in comparison to biomass-produc- ing and transforming sectors, as well as their non-bio- based counterparts. FUNDING This project received funding from an adminis- trative arrangement between the Directorate-General for Research and Innovation (DG RTD) and the Joint Research Centre (JRC). ACKNOWLEDGEMENTS The authors would like to thank Adrian Leip (DG RTD) and the colleagues from the Knowledge Centre of the Bioeconomy for their feedback on the manuscript, and Saulius Tamosiunas for technical support. REFERENCES Chulok, A. (2021). Bioeconomy in the Twenty-First Cen- tury: Global Trends Analysis Perspective. Koukios, E., Sacio- Szymańska, A. 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