Biofuels – A green alternative to fossil fuels

Audited by PwC

In 2009, Novozymes’ sales of enzymes to the biofuel industry represented approximately 18% of total revenue. Novozymes supplies enzymes that are used in the production of biofuel. Enzymes convert the biological material into sugars, which are then fermented into biofuel. Enzymes also improve production efficiency and overall biofuel output.

Novozymes is continuously striving to improve the commercial viability of advanced biofuels and the carbon benefits of conventional biofuels. Advanced biofuels, for example cellulosic biofuel, are produced from agricultural residues such as corn cobs and stover, bagasse, woodchips, and municipal waste. We currently have around 150 employees working on the conversion of biomass for advanced biofuels. This is Novozymes’ single largest research project ever.

Biofuels are a major step toward meeting increasing fuel demands with renewable resources. Biofuels currently offer the only immediately available cost-efficient alternative to fossil fuels within transportation. Conventional biofuels currently reduce CO2 emissions by up to 50%, whereas advanced biofuels have the potential to reduce CO2 emissions by 90% compared to gasoline (Liska A.J. et al. (2009): Improvements in Life Cycle Energy Efficiency and Greenhouse Gas Emissions of corn ethanol, Journal of Industrial Ecology. EU Commission (2007): Well-to-Wheels analysis version 3, Joint Research Institute).

For and against

The debate on biofuels has been going on for many years with shifting intensity. Issues in the debate include deforestation, climate change, land use, and food prices. The debate is important, and Novozymes maintains that there is a need for international agreements on the methodology for measuring the impact of biofuels and making comparisons with traditional fossil fuels. Novozymes actively supports the efforts by governments, NGOs, scientists, and business to establish objective criteria for how biofuels can support sustainable development.

We put special focus on the issues related to land use and emissions of greenhouse gases. Calculating greenhouse gas emissions from indirect changes in land use is an extremely complex task, and there is a number of methodological and data-related problems with calculating indirect land use changes (ILUC). Together with international experts and authorities, Novozymes is very much engaged in establishing a scientifically consistent approach to the ILUC methodology with the aim of providing valid input for the debate.

If produced and used correctly, biofuels will make a significant contribution to the sustainable energy solutions that society needs, and that is why Novozymes is working hard to realize the full potential of converting biomass into fuel. We therefore applaud the political goodwill that the US and other nations are showing toward the development of a strong and sustainable biofuel industry.

The biofuel market

The US market for biofuels is the world’s largest, with clear legislative targets in place, in particular the Renewable Fuel Standard (RFS), which mandates a minimum percentage of biofuels to be blended into gasoline. This supports a market for biofuel in the US and reduces US dependence on imported fossil fuels.

In the US, the level of biofuel blended into gasoline is approximately 8%, whereas in Europe it is currently 2%. The target within the EU is 5.75% renewable energy in 2010 and 10% in 2020, which includes biofuels. Over the last five years, Novozymes’ sales of enzymes to the biofuel industry have experienced average organic growth of more than 30% annually.

Advanced biofuels closer to commercial scale

By 2010, new enzymes from Novozymes will make it possible to produce advanced biofuels from agricultural residues in large-scale production. With these enzymes on the market and the available technologies, it will be possible to produce advanced biofuels in the US at around USD 2.25 per gallon. The costs used to be a barrier to commercial production, but Novozymes has made great progress in bringing down the enzyme cost and will be able to provide enzymes at around USD 0.50 per gallon of biofuel in 2010.

A number of demonstration plants have already started operating in different parts of the world, and more are expected to come online in the next few years to demonstrate the technology and economics on a larger scale. The first commercial-scale plants are expected to start operating within a few years.

Get a deeper insight into Novozymes and biofuels: Watch videos about the public debate, the political challenges, the market situation, critical factors, etc.

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