* Says cellulosic version may be profitable in U.S. by 2015
* Sees fuel prospects grimmer in Europe
* Expects enzyme sales of 30-50 cts/gln of cellulosic
* 2009 sales growth goal on track
(Adds details, quotes)
COPENHAGEN, Feb 19 Novozymes (NZYMb.CO) believes next-generation cellulosic ethanol could be profitable in the United States without government subsidies by 2015, provided oil rebounds to $80-120 per barrel, executives said on Thursday.
Prospects for the environmentally friendlier version of the biofuel look much grimmer in Europe, the chief executive of the world's top maker of industrial enzymes said.
"I don't think it's going to fly in Europe," said Steen Riisgaard in a meeting with journalists. "In the U.S., the first-generation bioethanol paved the way. In Europe we don't have the infrastructure. To commit 200 million euros ($252 million) for a second-generation plant here with no distribution system is very difficult."
Riisgaard said the political will to support bioethanol did not exist in Europe as it does in the United States, China and Brazil.
Washington provides subsidies and incentives equivalent to about $1 per gallon at the moment, driving the cost of cellulosic ethanol down to about $1.50 per gallon by next year.
Riisgaard said the U.S. government should also consider state loan guarantees and mandates for flex-fuel cars to encourage building a bioethanol infrastructure.
Novozymes executives said the company will introduce enzymes for making cellulosic ethanol in 2010. The fuel is produced from crop waste or fast-growing grasses and avoids the blame for food price inflation attached to ethanol made from corn starch.
They said Novozymes would sell 30-50 cents worth of enzymes per gallon of cellulosic bioethanol compared to 3.5 cents to 6 cents of enzymes per gallon for first-generation fuel.
"By 2015, cellulosic ethanol could work without subsidies if oil is at $80-$120 per gallon after the recession is over," said Peder Holk Nielsen, who heads the company's enzymes business.
"With oil at $30, it requires subsidies."
Last month, Novozymes reported a 7 percent increase in operating profit for 2008 on strong enzyme sales to the ethanol industry, which rose 40 percent in the U.S. in the fourth quarter alone.
"We are in a very sweet spot," Riisgaard said. "Commodity prices will go up as soon as global growth returns. We have a better, stronger portfolio of opportunities now so we feel we're in better shape than in 1998," when the company saw flat sales due to the Asian financial crisis.
"Sales growth is down to approximately half of what it should be because of the economic downturn, but we're on track for 3 to 8 percent growth (in local currencies) this year," Riisgaard said. ($1=.7938 Euro) (Reporting by Gelu Sulugiuc; editing by John Stonestreet)
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