Enzyme factory mixes into ethanol's future

Jun 27, 2012

Inside a new facility in Blair, Neb., north of Omaha, a gleaming maze of steel tubes connect a line of giant fermentation tanks that will cultivate some of the most advanced biotechnology in the ethanol industry.

With the assistance of a $28 million federal tax credit, Denmark-based Novozymes invested $200 million in this plant — which it calls the largest enzyme factory in North America.

The company had good reasons for building big.

Enzymes are a key ingredient to unlock ethanol from its source. These proteins convert starch in corn or cellulose in corn stalks into sugars, which are then fermented into ethanol.

While the Blair facility — which already employs 100 people — will soon ship enzymes by the tanker-truck to conventional corn ethanol plants throughout the Midwest, that’s just the beginning.

Novozymes, which operates in 130 countries, has developed some of the most advanced enzymes used to make cellulosic ethanol, which is derived from corn stalks and other biomass material – not the corn itself.

Peder Holk Nielsen, head of the company’s global enzymes business, said the Nebraska plant was built with room to grow.

“We are really hoping that the cellulosic ethanol business will soon take off in the U.S. and that could be a real game changer both for Novozymes and for a plant like this one,” Nielsen said during the factory’s grand opening in early June.

But in truth, cellulosic ethanol production remains mostly a hope.

Federal law mandates the use of advanced biofuels like cellulosic ethanol as a way to make more fuel without using more corn. Four years ago, at the time of the groundbreaking for Novozymes' plant in Blair, the U.S. goal was to be producing 500 million gallons of cellulosic ethanol in 2012. Instead, the industry has struggled to keep up with this year's revised goal of just 8.6 million gallons.

"Some of that delay was certainly caused by the economic downturn and the inability to get financing for putting up the first commercial plants," said Mike Cleary, director of the National Bioenergy Center at the National Renewable Energy Laboratory.

But the first commercial-scale cellulosic ethanol plants are finally being built in the U.S. and should go online next year. Three new plants are planned in Iowa. One is being built in Kansas. Instead of grain, the fuel source will be wheat straw or corn stover — corn cobs and stalks left over after harvest.

"Corn stover, corn residue, is the largest single volume of agricultural waste in the United States," Cleary said. "These are pioneer plants. These are the first of their kind in terms of being able to use a lingo-cellulosic feed stock instead of starch from corn to produce ethanol."

Cleary said production of cellulosic ethanol could run up to 100 million gallons within a few years. That is still a fraction of the 15 billion gallons of corn ethanol produced each year. But Thomas Nagy, of Novozymes, believes cellulosic ethanol can catch up because it is no longer a question of technology or cost.

"It's not a far-fetched dream that, maybe in five or 10 years," Nagy said. "It's actually possible to do it now. What we need to have here is the first plants coming in trying to build it up. Then you have the second wave coming in where you start to make substantial amounts of ethanol from plant material, cellulosic material, rather than the corn itself."

Even with its stalled development, the final goal for cellulosic ethanol is the same — 16 billion gallons per year by 2022.

For Cleary, the biggest question between now and then is about policy. How much support can the government afford to meet its own targets on renewable fuels?

"It is, relative to technological cost, it's the dominating factor." Cleary said.

The Advanced Energy Manufacturing Tax Credit that helped build the Novozymes plant in Nebraska is up for renewal. A dollar-per-gallon tax credit for cellulosic producers could also expire at the end of the year, before the new plants even go online. And the decision by regulators to allow E15, a stronger mix of ethanol, at the pump is being challenged.

Those and other policy questions may add some uncertainty, but if and when cellulosic does take off, Novozymes has positioned itself to pounce on the potential.