Europe Lagging U.S. and China
in Developing Biofuels,
Novozymes CEO Says
Europe is lagging the U.S., China and Brazil in developing biofuels for transportation because of a lack of political direction, Novozymes A/S Chief Executive Officer Steen Riisgaard said.
Brazil aims to displace 10 percent of global gasoline use with ethanol by 2020; China is testing corn-based ethanol in nine provinces; and the U.S. has set fuel standards requiring ethanol use, said Riisgaard, whose companies is the world’s biggest maker of enzymes used to refine biofuels.
“Brazil knows what it wants to do,” Riisgaard said in an interview at Bloomberg’s office in London. “In the United States, similarly, they have a renewable fuels standard -- they know what they want to do. You go to China: the government knows what it wants to do. They have a plan. You come to Europe and there’s not this kind of political direction. We don’t know what we want to do.”
Novozymes estimates ethanol from crops, agricultural waste and grasses can cut greenhouse gas emissions by 90 percent relative to gasoline. The Bagsvaerd, Denmark-based company draws 17 percent of its revenue from selling enzymes used to speed up the reactions in producing biofuels.
Novozymes is working with more than 30 companies around the world including Poet LLC, the largest U.S. ethanol producer, Dedini S/A Indústrias de Base, a Brazilian maker of biofuels equipment, Cofco Ltd., China’s largest grain trader and China Petrochemical Corp., known as Sinopec, which is the nation’s second-largest oil producer.
Debate in Europe
The 27-nation European Union has set itself a target of deriving 10 percent of its transportation fuel from biofuels by 2020. The push for the fuels is clouded by a debate over whether biofuel production is competing with farmland used for food crops, “which is not relevant when you talk about residues from agriculture” that will be used to make the next generation of biofuels, Riisgaard said.
So-called second-generation biofuels, which come from grasses and crop waste rather than the crops themselves, can be competitive with current ethanol and gasoline within five years without government subsidy, Riisgaard said. With support, the new fuels will be competitive next year, he said.
Poet, based in Sioux Falls, South Dakota, plans to open a new plant next year using enzymes developed by Novozymes to make biofuels, he said.
“They say that in that facility they will be able to produce at less than $2 per gallon,” Riisgaard said. “The corn-based fuel ethanol today is roughly $1.80, so it’s not quite there, but under the U.S. subsidy regime, which is more favourable for cellulosic, it is certainly a competitive price.”
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