(Corrects to say the $13 billion is China's total biofuel
potential investment, not its project with COFCO and Sinopec)
* Sees up to $13 bln needed to support China biofuel projects
* Chinese firms to get 75 pct of value from projects
(Recasts, adds background, company comments, share price)
HONG KONG, April 20 Denmark's industrial enzyme
maker Novozymes A/S (NZYMb.CO), which has teamed up with China's
COFCO and Sinopec to develop a solution for cellulosic ethanol,
said the country would need a total of 90 billion yuan ($13.2
billion) investment in a short period to support the industry.
The move reflects growing demand from China as it shifts to
produce more renewable energy.
Novozymes -- the world's biggest producer of industrial
enzymes -- joined China National Cereals, China Oil & Foodstuff
Corp (COFCO) and top Asian refiner China Petroleum and Chemical
Corp (Sinopec) (0386.HK) (600028.SS) in February to develop an
industry chain to collect agricultural waste, process it into
bioethanol and distribute the clean fuel through petrol stations.
The estimated total investment could go toward building 250
factories, assuming total demand for bioethanol in China reaches
a projected 37 million tons in 2020, the firm said in a statement
China's energy-related firms including COFCO and Sinopec
could capture at least 75 percent of the potential value, since
the enzyme cost would account for just 25 percent of the total
cost, Mars Zhu, Novozymes' China Communications Manager, told
Reuters on Monday.
Zhu said a cellulosic ethanol industry in China could come
into place within five to 10 years, depending on the speed of
cooperation among the companies and government regulation.
China, which has pledged to curb emissions of greenhouse
gases, could overtake the United States as the world's top
cellulosic producer by 2013, Novozymes' Chief Executive Officer
Steen Riisgaard told Reuters in an interview in February.
Cellulosic uses enzymes or large amounts of heat and pressure
to break down the tough woody bits of crop waste and non-food
plants into sugars that can be made into ethanol.
Cellulosic ethanol could be made in China for $2.50 a gallon
by 2010, and that could fall to $1.50 a gallon by 2015, Novozymes
By converting agricultural residues into fuel ethanol, China
can reduce its gasoline consumption by 31 million tons in 2020,
thereby reducing its dependence on imported petroleum by about 10
percent, Riisgaard said in a statement on Saturday.
So far this year, Novozyme's shares have fallen 3.8 percent,
while shares of Sinopec have risen about 32 percent.
(Reporting by Sui-Lee Wee; Editing by Ken Wills)