Governor Ricketts: Danish company’s interest in Nebraska expansion cooled after EPA’s ethanol proposal

Source: By Russell Hubbard / World-Herald staff writer • Posted: Tuesday, June 16, 2015

Nebraska Gov. Pete Ricketts said on the last day of his European trade mission that federal rulings on ethanol mandates are obstructing the expansion of a growing Danish company with a substantial Cornhusker State presence.

Novozymes, a maker of industrial enzymes, employs 120 people in Blair making compounds that help ethanol producers get more energy from corn. But last month’s Environmental Protection Agency proposal on the amount of ethanol that will be blended into the nation’s fuel supply has cooled the company’s interest in expanding, the governor said.

“They are looking at all their investments in light of the EPA decision,” Ricketts said on a conference call from Denmark on Monday. “When the EPA changes the rules, it creates uncertainty and hampers job creation.”

Bioscience and renewable energy for Nebraska, the second-largest ethanol producer, behind Iowa, were major topics on the first overseas trade mission by Ricketts, who took office this year. Novozymes, a publicly traded company in Denmark, spent $200 million on its Blair plant, which opened in 2012, banking on the growing demand for and production of Nebraska corn, ethanol and ethanol byproducts, such as cattle feed.

The governor’s meeting with Novozymes executives Monday failed to secure any additional investment in Nebraska from the company, which had a 2014 profit of $382 million on $1.8 billion in sales. Last month’s EPA decision on the Renewable Fuels Standard that governs how much ethanol gets blended into gasoline was a disappointment to the renewable fuels industry. It failed to mandate the level of increases envisioned by law.

“We’ve always known that Nebraskans support biofuel production, including the local and federal elected officials,” Novozymes Chief Executive Peder Holk Nielsen said in a statement released to The World-Herald on Monday. “Gov. Ricketts and others have written to EPA recently defending the Renewable Fuel Standard, and we appreciate their unwavering support.”

The ethanol industry Novozymes serves is a big one in Nebraska, responsible for $5 billion in economic impact, according to a study this year by the University of Nebraska-Lincoln. The state’s 24 ethanol plants employ 1,300 people at an average wage that is 21 percent higher than the state’s average manufacturing wage.

The EPA’s latest ethanol proposal would reduce the amount required to be blended with clear gasoline by more than 4 billion gallons in 2015 and by more than 3 billion gallons the following year. The agency said the standards set by law cannot be achieved, partly because of limitations on the amount of non-ethanol renewable fuels that can be produced.

“Nebraska remains in the running for Novozymes expansions going forward,” Ricketts said.

The Nebraska trade mission to Europe included officials from the State Departments of Agriculture and Economic Development, along with private-sector business leaders.

The delegation set off on June 7 and visited Italy, Belgium and Denmark, touting Nebraska exports and soliciting foreign investment in the Cornhusker State.