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.
Policymakers hope cellulosic will be a viable fuel that emits less greenhouse gas than gasoline or conventional ethanol made from corn starch. Since it will be made from crop waste or fast-growing grasses and trees it should not be blamed for helping to boost food prices, which has been one of the criticisms of ethanol made from corn starch.
Novozymes last week raised its long-term growth targets after reporting a 7 percent rise in 2008 operating profit.
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Reporting by Ben Hirschler; Editing by Erica Billingham