Bloomberg News

Novozymes Enzymes to Make Cheap Cane Ethanol in Brazil

October 04, 2011

(Corrects headline and first paragraph to say Novozymes won’t build a factory in story published Oct. 3.)

Oct. 3 (Bloomberg) -- Novozymes A/S, the world’s biggest maker of industrial enzymes, said its biotechnology will be able to produce ethanol from sugar-cane waste in Brazil cheaper than fuel made from the plant’s juice.

Novozymes’s enzymes will be used to produce ethanol for 1.20 reais (64 cents) a liter in 2013, about 12 percent less than current prices, said the Bagsvaerd, Denmark-based enzyme company’s global marketing director Poul Ruben Andersen.

Bagasse, as the pulpy waste material is called, is often burned to produce power, and may also become a significant source of renewable fuel, said Salim Morsy, an analyst at Bloomberg New Energy Finance’s New York office.

“If all of Brazil’s surplus bagasse was processed into next-generation ethanol, the country would be able to produce an additional 4 billion liters (1.06 billion gallons) of fuel in 2013,” Morsy said today in a telephone interview.

Novozymes plans to showcase its enzymes at a demonstration plant that will be “bolted on” to a mill in 2013, he said. The facility will be built and owned by a major ethanol producer and generate more than 13 million liters of fuel a year, Andersen said in a telephone interview Sept. 30.

“Cellulosic ethanol is no longer five years out,” he said. “Production costs could be improved further in time,” as Novozymes’s biotechnology becomes cheaper, he said.

The enzymes the company uses for ethanol have dropped 76 percent in cost in the past three years, to 24 centavos for every liter of fuel produced, he said.

Double Production

Ethanol production in Brazil may double if the mills convert bagasse into fuel, and the mills would still have enough of the waste material left to burn to power their facilities, he said.

Novozymes has formed partnerships with the Brazilian research institute Centro de Tecnologia Canavieira, the state- controlled oil company Petroleo Brasileiro SA and equipment provider Dedini SA Industrias De Base to develop its waste-to fuel technology, he said.

Anhydrous ethanol, which is blended with gasoline, sold for 1.37 reais a liter last week, according to the Piracicaba-based research institute Centro de Estudos Avancados em Economia Aplicada.

--Editors: Will Wade, Reed Landberg

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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