Novozymes’ new Cellic® CTec2 enzymes enable the biofuel industry to produce cellulosic ethanol at a price below USD 2.00 per gallon for the initial commercial-scale plants that are scheduled to be in operation in 2011. This cost is on par with gasoline and conventional ethanol at the current US market prices.

“We have been working on this for the past 10 years and promised our customers and the market to be ready by 2010,” says Novozymes' CEO, Steen Riisgaard. “I'm extremely pleased to announce that we're ready. The enzymes are ready. Biofuel producers now have a critical component to turn agricultural waste into a competitive alternative to gasoline.”

Extraordinary advances in enzyme development have reduced the enzyme cost for cellulosic ethanol by 80% over the past two years and enzyme costs are now down to approximately 50 cents per gallon of cellulosic ethanol. Novozymes has allocated unprecedented resources to the project, and the company has also received development grants totaling USD 29.3 million from the US Department of Energy.

Novozymes has partnered with leading companies in the biofuel industry, such as POET, Greenfield Ethanol, Inbicon, Lignol, ICM, M&G, CTC, COFCO, Sinopec, and PRAJ to help accelerate process technology development and implementation. Coupled with further improvements in enzyme efficiency, Novozymes expects the cost to produce cellulosic biofuel to be further reduced.

“Cellulosic ethanol will be cheaper,” says Steen Riisgaard. “Our partners expect production costs to fall below USD 2.00 per gallon once their first commercial scale plants are fully operational, and the cost will continue to drop in the future.”

Cellulosic ethanol uses enzymes to break down cellulose in biomass into sugars that can be fermented into ethanol. Cellic CTec2 has proven to work on many different feedstock types, including corn cobs and stalks, wheat straw, sugarcane bagasse, and woodchips.

A number of pilot- and demonstration-scale facilities are in operation all over the world, while large-scale commercial facilities are under construction and scheduled to be operational in 2011.

Commercialization of cellulosic biofuel is expected to create 1.2 million new green jobs in the US alone by 2022. The recent support from the Obama Administration will reignite investments in new biorefineries across the US. However, moving to higher blends such as E15 and promotion of E85 are still needed to meet the cellulosic ethanol targets defined by the Renewable Fuel Standard.