* 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)
By Gelu Sulugiuc
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
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
"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,"
(Reporting by Gelu Sulugiuc; editing by John Stonestreet)