The bioeconomy is blossoming in the UK’s north thanks to industrial clusters targeted at driving investment.
In December 2025, local authorities launched a cluster in North East England that aims to grow the region’s bioeconomy by £5 billion.
Meanwhile, Scotland’s Grangemouth industrial site is incubating a new generation of native cleantech companies. One is Celtic Renewables, which recently gathered £16.23 million to scale its biochemicals operations there.
MiAlgae, another tenant at Grangemouth, snapped up a £1.5 million grant funding package from the government at the end of last year to build its first biomanufacturing facility.
We delve into how clusters are supercharging biobased investments into the north, in places historically dominated by fossil industries.
A North Star for the bioeconomy
Industry and academia are set to forge closer ties under Bioindustrial Cluster North, an industrial network spanning the English counties of Yorkshire and Northumberland.
The idea is to get startups, universities, and chemical producers in York and North Yorkshire and the Tees Valley working to build biobased value chains.
According to local authorities, the ultimate goal is “to establish the UK as a global leader in the industrial bioeconomy” by attracting investment into the area’s sustainable materials and chemicals companies.
The cluster has big ambitions. One is to create 5000 high quality green jobs in biotech, agrotech, and low carbon industries. Another is to spark 100 biobased startup launches in the region.
These seem eminently achievable once we factor in the northeast’s assets.
The region is already rich in manufacturing industries across science and tech, agriculture, and chemicals. In fact, the Northeast of England is already the largest cluster of process, chemicals, and energy companies in the UK. There are also over 7000 biobased businesses currently operating in the region.
The area also has a rich R&D ecosystem. The Northeast’s research cloud includes public universities like York and Teesside. The former has a UK-leading capability to scale biobased experiments at its Biorenewables Development Centre and enjoys strong connections to industry.
The area also boasts the specialised research group BioYorkshire, a public-private entity meant to accelerate the regional bioeconomy. Then there is the biobased infrastructure, including anaerobic digesters and energy-from-waste facilities. Both of these can prop up a circular biobased economy, one that turns used biobased materials into renewable energy at the end of their product lives.
A large supply of local feedstock cements the northeast as a prime location for the burgeoning bioeconomy. Urban areas nestle amidst highly productive agricultural land and forestry operations. Large food companies offer a cheap and reliable potential source of waste feedstock.
Why industrial clusters work
Clusters are a tried and tested way of accelerating growth in targeted sectors. Packing innovative firms and researchers into a small geographical area can hyper-charge partnerships and transactions, encouraging beneficial cooperation and competition.
Putting industry and research in close proximity can help break down many of the big barriers to scaling the bioeconomy. One of these is supporting young companies to move from the lab to commercialisation.
Breaking into the market is notoriously difficult for early stage biotech companies. They must demonstrate production at scale to win over investors. However, they often lack the capital to do so.
Clusters can address this by bringing early stage companies and researchers into closer contact with industry know-how. Startups can profit from industrial expertise, ensuring product developers have scalability in mind from the beginning.
Another benefit of hyper-proximity is that it shrinks the distance between producers and buyers. Biotech firms are located next to their biochemicals suppliers, who can get to know their customers’ needs inside out. Transport costs for feedstock suppliers plummet when many of their repeat buyers are concentrated in a single area.
More transactions mean producers get more signals on how much buyers are willing to pay for what. All in all, clusters encourage companies along the value chain to become more sensitive to supply and demand, aligning production to what industry actually needs at a given time.
Celtic Renewables charts new path for oil complex
Further north, biobased industries are infiltrating the former heartlands of Scotland’s fossil industry.
Celtic Renewables is one of the new biobased companies operating out of the Grangemouth industrial complex on the Forth of Firth, traditionally a key transport and processing hub for North Sea oil.
The company has already put its native Scotland on the map internationally for green chemicals, being the first company to make biofuels from Scotch whiskey byproducts.
Despite its whiskey fame, Celtic’s feedstocks and products run wider. The company specialises in making biobased solvents: acetone, butanol in particular. These are chemical cogs of global industry, with sectors as disparate as pharma and food dependent on solvents to manufacture their wares.
Most solvents are still made from fossil fuels. Celtic Renewables’ value proposition is that it can make them cheaply and effectively from plants instead. At its Grangemouth biorefinery – Scotland’s first – the company takes low-value, locally sourced waste like rejected potatoes into high value chemicals, including for the cosmetic and medical industries.
The company distinguishes itself from many other biobased manufacturers by using waste plants instead of farmed crops as feedstock. This is not only more sustainable than using virgin crops but makes the process more cost-effective.
The company now plans for a new £120 million biorefinery that will be ten times the capacity of the biorefinery it runs today.
This expansion will be built upon several recent finance injections: £5 million in new investment from Scotland’s national economic development agency, £5 million from Celtic’s existing private investors, and £6.23 million from the Grangemouth Just Transition Fund, awarded by the Scottish Government.
In with the new
Grangemouth is a symbolically charged site for a Scottish renewables company to set up shop. It is home to the UK’s oldest oil refinery and has been a centre for fossil fuel processing for over a century.
The fossil legacy is hard to budge. Grangemouth still pumps out fossil plastics and its businesses were still responsible for a staggerin 7.2% of Scotland’s total emissions in 2022.
Yet Grangemouth is also at a turning point. The North Sea oil bounty that it grew up around is now a thing of the past. Output from this aging oil field peaked in 1999. Since then, the rising costs of extraction, combined with cheap international competition, have forced it into managed decline.
In 2025, a landmark government report known as Project Willow highlighted how the site could become a major low carbon manufacturing hub. The Grangemouth Industrial Cluster Strategy set up by the Scottish government and private enterprise is laying out a roadmap for how this could be possible.
By operating there, Celtic is helping transform Grangemouth from the centre of the Scottish fossil economy into a new green manufacturing hub. Yet it is not the only Grangemouth tenant steering the site towards a greener and commercially viable future.
MiAlae, another Scottish circular success story, is planning to make fish-free Omega 3 out of algae and whisky industry byproducts on the site. Its value proposition centres around sustainability – the ability to manufacture supplements without depleting marine fish stocks.
Like Celtic, MiAlgae has already benefited from Scotland and the UK government’s growing interest in turning Grangemouth into a green growth hub.
Last year, MiAlgae got up to £3 million in backing, half from the Scottish government’s Just Transition Funding, matched by half from the UK government’s Grangemouth Investment taskforce. On December 11 last year, the company broke ground on its first commercial manufacturing facility at the site.
The fact that both MiAlgae and Celtics received the earliest public investments into decarbonising Grangemouth shows the biobased industries moving into the very heart of UK climate policy.
Beyond the Golden Triangle
In parts of Scotland and the Northeast, the legacy of fossil-based industry casts a long shadow. Deindustrialisation hit manufacturing regions hard after the 1980s, when the UK’s energy-intensive industries moved abroad.
With investment and retraining, the UK could transform these former industrial hubs into vibrant value biobased chains of the future. Building northern bio-industries could also rebalance the UK economy away from London, easing the division between a more dynamic South and a declining North.
Luckily, the biobased industry up north could be in for continued investments. This is thanks to the growing likelihood that Andy Burnham will become the next UK prime minister.
Burnham is a politician with deep ties to the north who has repeatedly called for British reindustrialisation. His premiership could therefore cash out into greater investment for biomanufacturing outside the ‘Golden Triangle’ of Oxford, London, and Cambridge.
If policymakers get the green northern revival right, it could set a valuable global benchmark for doing the ecological transition fairly.
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