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Novozymes and biofuels

In 2008 Novozymes’ sales of enzymes to the bioethanol industry represented approximately 17% of total revenue. Enzymes are required for most production of bioethanol, and they furthermore improve production efficiency and input utilization. Novozymes continues to strive to improve the commercial viability and reduce the carbon footprint of production of first-generation bioethanol as well as development of second-generation bioethanol.

Production and use of biofuel present both opportunities and risks. Novozymes sees biofuels as a major step toward meeting increasing fuel demand with renewable resources. Biofuel currently offers the only immediately available alternative to fossil fuels within transportation. However, biofuel also presents risks that must be mitigated; see "Biofuels and beyond."

What is bioethanol?
The predominant biofuel is bioethanol, which can be produced from sugar, starch, or cellulose. First-generation bioethanol is produced from, among other things, corn, wheat, sorghum, and cassava. With the exception of sugarcane/beet-based bioethanol, enzymes are necessary for first-generation production. Currently, all commercial production of bioethanol is first generation.

Second-generation bioethanol is produced from cellulosic feedstock such as the cobs, stalks, leaves, and husks of corn plants, as well as wood chips and sawdust. Second-generation bioethanol can also be produced from energy crops such as switchgrass. By 2010 Novozymes will be ready to supply the enzymes needed for large-scale production of second-generation bioethanol. This will be a radical development in the search for renewable energy sources.

Novozymes’ business
Novozymes is the market leader in delivering the enzymes needed for first-generation bioethanol production, with a global market share of more than 55%. The US market for bioethanol is by far the largest. Here there is legislation in place (the Renewable Fuel Standard – RFS ) to ensure that US fuel consumption becomes more sustainable as well as less dependent on nondomestic oil supply.

Over the last years Novozymes’ sales of enzymes to the bioethanol industry have experienced organic growth of 30–45% annually. Novozymes’ growth in 2009 is expected to be in line with the RFS. Currently, the RFS mandates 15 billion gallons by 2015 as the maximum level of blending to receive tax credits. This implies that, as the annual basis of measurement increases and the outlined growth rate declines, Novozymes’ growth within this industry will level out in the coming years.

Novozymes needs to expand its production capacity to accommodate expected future growth within both first- and second-generation bioethanol. In 2007–2008 the Hongda plant in China was expanded to meet demand, and in June 2008 Blair, Nebraska, USA was selected as the location for a new facility that will produce enzymes for first- and second-generation bioethanol from 2011.

Biofuels and beyond

You can read more about Novozymes and biofuels in the "Ambitions and long-term targets" section.

Click to read the article "Biofuels and beyond."