Novozymes looks beyond the ‘fantasy fuel’ it helped to turn into reality

Source: By Sabina Zawadzki, Reuters • Posted: Thursday, October 9, 2014

COPENHAGEN, Oct 7 (Reuters) – When Denmark’s Novozymes first wondered in 2000 how its mass-produced enzymes could be used to make advanced biofuel, the industry did not exist and only now is the fruit of its labour emerging after years of being lampooned as a “fantasy fuel”.

But as commercial production of transportation fuel made from plant waste rather than valuable corn finally starts in the United States, Brazil and Europe, Novozymes has already turned its gaze towards bioplastics and even diapers.

With the biofuels sector waging a drawn-out regulatory battle with ‘Big Oil’ over potentially damaging cuts to biofuel targets in the United States, Novozymes says it has contingency plans.

In addition to fuel, the younger sibling of Danish drugs group Novo Nordisk has set its sights on biomass conversion of plant waste into other products derived from petroleum, such as plastics and acrylic acid, the super-absorber that makes diapers work.

As the world’s largest enzyme maker, Novozymes produces proteins that are catalysts used to speed chemical reactions that have a wide array of applications, from boosting the efficiency of washing powder to pre-treating processed food, brewing beer or making animal feed more nutritious.

Within the energy sector, which contributes about 17 percent of its 12 billion Danish crowns ($2 billion) in annual revenue, its enzymes accelerate the process of turning feedstock into as much sugar as possible to be fermented with yeast into ethanol.


While it is not technically impossible to get fuel from corn and plant waste without enzymes, the proteins are critical if the process is to be commercially viable.

The difficulty has been second-generation cellulosic ethanol made from unwanted natural plant waste – a process complicated by the toughness and chemical complexity of the feedstock.

“It’s probably the biggest R&D project we have ever, ever undertaken,” Thomas Videbaek, Novozymes’ executive vice-president and head of business development, said from its sprawling complex of offices and laboratories near Copenhagen.

“We’ve taken it a very long way from when we couldn’t fight back when people called it a fantasy fuel. Now we’re getting to the point where it is here – we have a facility in Italy.”

Novozymes partnered with Beta Renewables, part of Italian chemicals group Mossi Ghisolfi, to open the first commercial plant in Crescentino last October, with annual capacity of 19 million gallons a year (mgy).

Biofuel company POET has since opened a 20 mgy plant in the United States and biotech start-up GranBio started operations at a 22 mgy facility in Brazil last month.

Abengoa Bioenergy has a new 30 mgy plant and Royal Dutch Shell is leading a joint venture scheduled to begin operations by the end of the year. All but the Abengoa plant are using Novozymes’ enzymes.

Of the 14 billion gallons a year of traditional corn ethanol produced, mostly in North America, 60 percent use Novozymes’ enzymes, with the lion’s share of the rest of the market belonging to rival DuPont, the company estimates.

Novozymes and Novo Nordisk, the largest Nordic company by virtue of a market value equivalent to $124 billion, were split in 2000 after an 80-year history together as Novo.


The smaller Novozymes, with a market value of about $13 billion, draws a distinction between the years-long process of bringing a single drug to market, with the potential for billion-dollar sales, and its own business model reliant on a dozen or so product launches each year.

Chief Executive Peder Holk Nielsen underlined Novozymes’ strategy of new products launches to drive growth after sales of enzymes for detergent, its largest business area, fell 2 percent in the second quarter, denting its share price.

The company is aiming to provide enzymes to 15 cellulosic plants by 2017, reaping 1 billion crowns in revenue by then – about half of Novozymes’ current annual biofuels revenue.

It says it is in talks on cellulosic biofuel projects in Indonesia and Malaysia and could make announcements next year.

The company’ link to Italy’s Mossi Ghisolfi, known for making the plastic for Pepsi and Coca-Cola bottles, extends to work with its M&G Chemicals operation in China to produce plastics from plant waste rather than petroleum.

The project is at an advanced planning stage as M&G applies for permits and organises its structure in the country.

A second project, with Germany’s BASF and Cargill, is looking into acrylic acid production for diapers.

“When we look at the opportunities in this area, and ethanol for transportation is an important part of this, but then add all the other things you can be producing – a lot of plastic components, fibres, super absorbers – we could see a completely new Novozymes,” Videbaek said. (1 US dollar = 5.8946 Danish crown)