DAVOS-Novozymes says "green" Obama to offset weak oil

By Ben Hirschler

DAVOS, Switzerland, Jan 28 (Reuters) - Barack Obama's commitment to renewable energy is a shot in the arm for the biofuel industry, battered by tumbling oil prices, according to the world's biggest producer of industrial enzymes.

The chief executive of Denmark's Novozymes (NZYMb.CO) said the new U.S. administration's stance vindicated its investment in enzymes for second-generation ethanol production.

Steen Riisgaard said Novozymes was "a couple of years" ahead of rivals in its work on making so-called cellulosic ethanol from corn cobs, stalks, straw, trees and grasses.

In the long term, he also expects a range of naturally degradable plastics to be manufactured in rural "biorefineries".

"The bad news for us is the very low oil prices that we see right now, but there is a lot of good news with the current interest in environmental issues," Riisgaard told Reuters on the sidelines of the annual meeting of the World Economic Forum.

"In that scenario, second-generation fuel ethanol plays right into the centre of events. In the U.S., we are very encouraged by what we hear Obama say."

Novozymes will be ready to supply commercial-scale quantities of second-generation enzymes to customers next year, ahead of the opening of the first full-scale U.S. cellulosic ethanol plants in the United States in two years time.

One of Novozymes partners is top U.S. ethanol producer Poet, which plans to open a $200 million plant in Iowa in 2011.