What if the answer to climate change is biology?  It has moved from a lab tool to an economic engine. It is reported that the direct annual global impact of the Bio Revolution could be between $2 trillion and $4 trillion in 2030-40. The bio-based materials market is exploding, and the biomanufacturing market will hit $200 billion by 2040, as advanced facilities drive production costs down 90%. In a way, biology is driving the next industrial revolution.

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In the next decade, 30% of global manufacturing will be interacting with biomanufacturing. This is about replacing petroleum-based materials with sustainable ones made by microbes, produced through fermentation instead of chemical processing. Some processes are even carbon-negative, literally eating CO₂ to produce materials. Instead of drilling, refining, and emitting, we're using renewable feedstocks that can reduce lifecycle carbon emissions compared to conventional plastics. 

And for the first time, unit economics are starting to work at scale.

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So... what exactly are biomaterials?

Think of biomaterials as anything made by utilizing nature's manufacturing innate systems. Instead of drilling for oil and cracking it in giant refineries to get the carbons, you're using plants, microbes, seaweed, and even CO₂-eating bacteria to produce materials. It is estimated that 60% of all physical inputs to our economy can be produced through engineered biology, making these microbes the industry of the future. They are atomically precise (more precise than semiconductor fabs!) and infinitely scalable.

The economics are getting exceptional

Here's where it gets interesting for investors. For the bioplastics industry, the production capacity is currently at 60%, indicating significant room to scale efficiently as demand accelerates. For other biomanufacturing processes, the cost of feedstock is a fundamental hurdle for scaling, but artificial intelligence is changing the game. AI tools are speeding up material innovations, improving process efficiencies, and shortening go-to-market timelines, which reduces overall costs.

Today, biomanufacturing economics work best for high-value chemicals, specialty ingredients, cosmetics, and pharmaceuticals, where margins can absorb current production costs. For low-margin products, this can be detrimental, as sugar/feedstock can easily take up 50% of the COGS. 

But the price floor is dropping fast. Companies like Erg Bio, a Lichen Ventures portfolio company, has managed to produce net-zero sugar from feedstock at half the cost of cane sugar, and trending chesper.  This advancement opens up a whole new market for additional products that must compete with petroleum-based counterparts on cost.

Where the money flows

Let's break down the opportunity by sector:

Energy and Fuels

• Aviation is responsible for nearly 4% of global warming, and neither batteries nor hydrogen are viable for long-haul flights. The sustainable aviation fuel (SAF) market is exploding, projected to reach $15-26 billion by 2030. IATA estimates SAF could contribute 65% of the emissions reductions needed for aviation to reach net-zero by 2050.
• After almost two decades of research, cellulosic biofuel has just hit cost parity. Erg Bio uses state-of-the-art biomanufacturing technology to turn almost any agricultural waste into sustainable aviation fuel, creating high-value products from low-cost feedstock, while decarbonizing the economy. 
• Alternative biofuel production is also underway. Microbes can produce a huge range of products, including alcohols, which can then be turned into a variety of biofuels. 

Materials (Packaging, Fashion, and Construction)

• Packaging is 45% of the bioplastics market right now,  totaling about 1.12 million tonnes in 2023. 
• Companies are replacing plastic films with seaweed alternatives, while fashion brands are adopting mycelium leather, spiker silk analogs, and microbial dyes. The market for vegan leather alone is projected to hit $140B by 2030.
• Bio-based adhesives, composites, and fillers are increasingly used in building materials. The bio-based construction polymers market was valued at $16.4 billion in 2024 and is projected to reach $40.6 billion by 2030. While these sectors typically have longer sales cycles, they have massive volumes once adopted.

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Food and Agriculture

• The alternative protein sector is scaling fast as well. Fungi and bacteria are turned into beautifully curated proteins served in fancy restaurants and at home. McKinsey projects $250 billion will need to be invested in fermentation assets over the next 30 years to scale this infrastructure globally. Adding to the $18 billion already invested this past decade.
• Agricultural waste is becoming a valuable next-generation feedstock. Crop residues, leftover food, and other byproducts are being converted into everything from bio-based packaging materials to animal feed. Erg Bio is leading the charge in a feedstock-agnostic way, with other companies developing tailored processes for single-stream feedstocks.
• Bio-based fertilizers are also replacing petroleum-based equivalents. The industry is projected to reach USD 2.83 billion by 2030. The cost gap is closing, and they are better for the crops and the soil.

Why does this matter now?

Three tailwinds are triangulating:

• The tech works, and it's getting cheap. 
• Money is flowing, follow it. 
• Regulation is forcing the issue. 

For investors, it's the rare trifecta: massive TAM, regulations forcing adoption, and unit economics that is working. The billion-dollar revolution is not coming. It is now.