Novozymes joins Danish biofuel plant project

Thu Apr 26, 2012 12:30pm IST

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* Says takes minority stake to lend support

* Project aims to bring plant on stream in 2016

By John Acher

COPENHAGEN, April 26 (Reuters) - Danish enzymes producer Novozymes has joined a group that plans to build a bioethanol and biogas plant in Denmark by 2016 as part of efforts to ramp up industrial production of advanced fuels from plant waste, the company said.

The other partners in the Maabjerg Energy Concept consortium are Danish state-owned DONG Energy [DOENRY.UL} and local utilities Vestforsyning A/S, Struer Forsyning A/S and Nomi I/S.

Poul Ruben Andersen, Novozymes vice-president for bioenergy, told Reuters the company was making a "symbolic investment" but had agreed with the partners not to disclose the amount.

Novozymes, the world's biggest producer of industrial enzymes, has pinned its hopes on a take-off for production of advanced biofuel -- also known as cellulosic ethanol -- from plant waste, such as straw, but which is still in its infancy.

It is now one of the two biggest suppliers of enzymes for production of so-called first-generation bioethanol which is made from food crops, mainly corn, in the United States.

The Maabjerg plant will produce some 94 million cubic metres of biogas, 73 million litres of bioethanol, district heating for 20,000 households and power for several thousand homes, Novozymes said.

Straw from Danish farms would be the main raw material.

The project had earlier estimated the plant would cost more than 2 billion crowns ($354 million) to build.

Novozymes, whose enzymes are used to break down cellulosic biomass into sugars that can be fermented into ethanol, has repeatedly said it would not become a producer of biofuels in competition with its customers.

But in a conference call on the company's first-quarter results, chief executive Steen Riisgaard said on Wednesday he would not rule out taking minority stakes, though the policy not to invest in fuel production assets still holds.

"Of course, if a minority stake is what gives credibility to our case, then we have always been willing to consider small investments to show that we have skin in the game, to get them (partners) started," Riisgaard said.

Andersen said Novozymes' role in the Maabjerg project was to supply enzymes and participate in the development to ensure that its enzymes technology works well with the production process.

"There are a number of similar concepts being worked on around the world, and we are working with other partners elsewhere," Andersen said.

He said the sugars broken down by enzymes could be fermented into bioethanol or biogas. "Some of the biomass is better suited for ethanol and other parts for biogas or heat and electricity," he added.

The Maabjerg project, which now has a pilot plant near the towns of Struer and Holstebro on the Jutland peninsula, would be Denmark's second major plant for second-generation biofuels after DONG Energy unit Inbicon's plant at Kalundborg.

A facility being built in Italy by Italian chemicals group Mossi & Ghisolfi Group (M&G) is expected to be the world's first industrial-scale cellulosic bioethanol plant when it comes on stream this year ahead of rival U.S. projects.

($1 = 5.6430 Danish crowns) (Editing by David Hulmes)

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