Getting to cellulosic

There are three main hurdles in getting to demonstration stage with cellulosic ethanol: market conditions, lack of available capital, and a concern over “unproven” technology.

• - Demand for ethanol is restricted due to the E10 “blend wall.” U.S. regulations state that, regardless of how much ethanol is produced, it cannot be blended into standard petroleum at a rate higher than 10%. There is currently more than enough ethanol produced to blend at 10%; the addition of cellulosic ethanol, without an increase in the blend wall, would mean additional surplus. The U.S. EPA is expected rule on a waiver request to increase the blend rate to 15% by the end of this year.
• - By law, any car can run on a petroleum/ethanol blend of up to 10% without engine conversion. Flex-fuel vehicles (FFV) can run on any blend of ethanol up to 85%, but while these vehicles are widely adopted in Brazil, both the number of vehicles in the U.S. and the number of E85 pumps available is still small.
• - The past year was a tough one for ethanol producers, due to low oil prices, overcapacity of ethanol, and lack of available capital – caused in large part by the economic crisis. For many, investing in developing new technology takes a confidence they haven’t had this year.
• - Cellulosic technology is still considered new, and therefore carries a higher risk. While the technology to convert cellulosic biomass to ethanol exists today, the trick is in doing it in an economically viable way. There are a lot of unknowns that add to the risk, such as how to economically collect and transport the feedstock. These are questions that will be answered over time, as investors increasingly test out how to make cellulosic ethanol plants profitable.

Novozymes has come a long way in reducing enzyme costs, but there remain other process challenges, such as successfully scaling up the technology and demonstrating a fully integrated process, which must still be overcome. Two promising demonstration plants came online in 2009, including the Abengoa plant in Salamanca, Spain, and, opening today, Inbicon’s new cellulosic bioethanol plant in Denmark, one of the world’s largest.

We look forward to an exciting 2010, as we’re on track to deliver on our cellulosic promise: a product that reduces enzyme-use costs by 50% for many of our partners’ technologies and substrates.

World’s most advanced biofuels plant opens in Denmark.

World’s largest second generation bio-ethanol plant opens for production.

See it on NovozymesTV.

Source: Cynthia Bryant, Novozymes Global Marketing Manager, Biofuels