GoingPublic: Despite of the large number of biorefineries developing, the industry does not live up to its expectations, yet. Targets of the Renewable Fuel Standard (RFS) could not be met in the past. When will the 2G biofuel industry deliver on political expectations?
Andersen: The industry has delivered on the corn ethanol part of the RFS. In fact it has been ahead of targets. Now we are about to enter into the advanced part of the RFS. The process for cellulosic ethanol has been demonstrated in pilot and demo scale and will move to largescale in the years to come. Numerous facilities will start production of bioethanol in the coming years. In Italy, Beta Renewables will fully operate a 17 million gallons per year plant by 2013. In Brazil, GraalBio’s commercial size plant will be ready for production in late 2013/early 2014. In the US, biorefineries from Poet, Abengoa, DuPont and Chemtex will have a combined capacity of about 100 million gallons per year by 2014/15 with more to follow. China intends to have nine cellulosic ethanol facilities up and running by 2015 with total capacity of 170 million gallons per year and increase this ten-fold to 1.7 billion gallons per year by 2020.
GoingPublic: Enzymes have been considered to be the major bottleneck of the economically competitive production of biofuels. Is that still the case?
Andersen: Enzymes are not the bottleneck anymore. We have been able to increase efficiency and decrease cost to a point where the enzyme technology is commercially viable. So, although enzymes are a significant variable cost in the process, it is no longer the dominating cost factor. Actually, feedstock cost and the cost of the plant itself are the two more important cost components.
GoingPublic: For years, the Cellic series has been the benchmark for other cellulase products in the industry. What is Novozymes’ secret? Andersen:We have developed enzymes for more than 50 years and have a proven track record for continually bringing new innovations to the market. Every year, we spend approximately 14% of our turnover on R&D and we have world class scientists. In bioenergy we have a market share of 60%, globally. We also have partnerships with our customers in order to develop technology the market needs. Specifically, we have had a focus on developing cellulase for biomass conversion since 2000 and have since then invested significant resources into this field. Today, we have around 100 full time equivalents in R&D focused on developing novel and better cellulase in the context of biomass conversion, where the enzymes are to be applied as well as figuring out how to produce these enzymes in a cost competitive manner.
GoingPublic: Let’s have a look into the future: Are there any major developments for Novozymes’ bioenergy business?
Andersen: We are excited about Beta Renewables starting to show that the conversion technology works at large scale. We expect them to be able to contract 15 to 25 new facilities within the next three to five years. The sales potential for Novozymes from these plants could be up to USD175 million. Furthermore we will continue to work with our other partners in order to start their plants and improve our technology.
GoingPublic: Mr. Anderson, thank you very much for the interesting talk.