Sept. 1 (Bloomberg) — Efforts to spur use of clean fuel
from inedible crops will fail unless governments force oil
companies to offer it to consumers, according to Novozymes A/S,
developer of technology to reduce the cost of biofuel output.
“The issue is access to consumers and you see that clearly
in the U.S.,” Chief Executive Officer Peder Holk Nielsen said.
“Oil companies don’t promote this technology and they are the
only interface to the consumers as they control gas stations.”
In the U.S. the Environmental Protection Agency is eight
months past a deadline for a biofuel mandate forcing refiners to
add specified amounts of clean fuel each year into motor fuels.
Companies like Chevron Corp., BP Plc, Royal Dutch Shell
Group Plc and Exxon Mobil Corp. have struggled achieve
commercial-scale output of non-food biofuel and waste as they
need more refining than food plants to break down tough
cellulose. Novozymes is developing enzyme technology that cuts
costs and raises yields.
“Advanced biofuels will be a very, very hard sell outside
those countries where the energy sector is state-controlled
unless politicians get on top of it and mandate the use,”
Nielsen said. “That doesn’t mean subsidies, it just means that
if they don’t mandate the use of it, the oil companies will
always conclude that they would rather sell gasoline.”
The first-generation of biofuel made from edible crops has
been blamed for raising food prices. The European Union in June
proposed to cap the amount such fuel can contribute toward its
2020 target of 10 percent renewable energy in transport at 7
percent. It also proposed that member states set targets for
advanced biofuels at 0.5 percent of total transport-energy use.
“A mandate in Europe on advanced biofuels is a battle with
the oil companies,” Nielsen said in London. “This comes down
to how much does the world really want to replace fossil fuels
with renewables. It doesn’t have to be expensive but it will
require political will to make it happen.”
Novozymes and Dong Energy AS in July won 39 million euros
($51 million) from the EU to build a plant in Denmark that will
use straw to make clean fuel. A final decision on whether to
proceed with the facility is expected in the last quarter and
depends on whether EU states provide enough support.
The company expects to sell enzymes to at least 15 biomass
conversion plants by 2017. It’s already supplying enzymes to a
bioethanol facility operated by Beta Renewables SpA in Italy,
Nielsen said. He believes Beta will roll-out another 15 to 25
facilities and that would represent about 1 billion Danish
kroner ($176 million) in annual sales for Novozymes.
After the initial wave of 25 plants, Nielsen says he hopes
advanced biofuels will be cost competitive with gasoline.
“Advanced biofuels is a transformative part of our
business, where we see long-term growth,” he said. “Corn
ethanol is a great growth journey but it won’t transform the
world of industrial biotechnology.”
Novozymes enzymes are also used in pharmaceuticals, food
and drink, farming and household goods like cleaning products.
To contact the reporter on this story:
Louise Downing in London at
To contact the editors responsible for this story:
Reed Landberg at
Tony Barrett