New enzyme plant readies to supply biofuel plants

By Josh Funk

Associated Press

Published: Sunday, Nov. 20 2011 12:11 p.m. MST

BLAIR, Neb. — The leading maker of the enzymes used to produce biofuels says the declining political support for ethanol hasn't diminished the long-term prospects for the industry making fuel from plants.

Novozymes plans to open a major new enzyme plant in eastern Nebraska next year to better serve the ethanol industry.

"It's a huge potential that's out there," said Adam Monroe, president of Novozymes' North American unit.

Monroe said he thinks the U.S. biofuel industry has grown up a great deal over the past decade, so he's not concerned about the end of the federal ethanol tax credit next year.

"It can now stand on its own two feet and compete," he said.

But Monroe said he thinks the government should continue to support the biofuels industry through policies like the renewable fuels standard, which will require 36 billion gallons of biofuels to be blended into gasoline by 2022, including 16 billion gallons of cellulosic ethanol.

Monroe said the ethanol industry has the potential to provide a much bigger share of the nation's fuel supply than the renewable fuels standard requires.

"It's a bigger solution than a lot of people realize," he said.

The Renewable Fuels Association says the industry is now producing about 13.7 billion gallons of ethanol at more than 200 plants nationwide, which includes 25 plants in Nebraska. That's roughly 10 percent of the 138 billion gallons of gas that were used in the country last year.

Association spokesman Matt Hartwig said the industry is prepared for the end of the 4.5-cent per gallon tax credit ethanol has received for several years.

"Right now, ethanol is very cost-competitive with gasoline without the tax credits," Hartwig said.

Novozymes expects the new enzyme plant, which cost between $160 million and $200 million, to be completed sometime during the second quarter of next year. More than 200 construction workers are spending their days at the site south of Blair to meet that target.

About 56 full-time employees work at the plant already, but that number will grow toward 100 beginning early next year.

Enzymes are strings of protein that can serve as catalysts in many natural and manmade processes. The enzymes produced in Blair will break down the starch in corn or another feedstock, which is a vital part of ethanol production.

In addition to corn-based ethanol, Novozymes is also a player in the emerging cellulosic ethanol business and has been working with the nation's largest ethanol company, Poet LLC, on a pilot cellulosic ethanol plant in Emmetsburg, Iowa.

Cellulose is the woody material in branches and stems that makes plants hard, and the ethanol industry is developing ways to produce fuel from cellulose economically. Once the costs of cellulosic ethanol are similar to corn-based ethanol, companies will be able to produce ethanol from straw, corn stalks, wood pulp and other inedible agricultural leftovers.

Monroe said he expects to see the first wave of commercial cellulosic ethanol plants open in early 2013. And he predicted that cellulosic ethanol will initially cost about $2 per gallon to produce, so it should be able to compete with gasoline.

Hartwig said it has taken longer for cellulosic ethanol plants to get going because of the recession that hit in 2008 just as cellulosic technology was emerging.

The design of the Blair plant reflects Novozymes' optimism about the biofuels industry. The plant has room to be expanded fivefold, and some of the infrastructure for expansion, like concrete foundations for future structures, is being built now.

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