In the USA, fuel ethanol plants are going up like popcorn!” comments Larry Peckous, a principal scientist in Customer Solutions at Novozymes in Franklinton, USA. He has worked with the fuel ethanol and starch processing industries since the late 1980s and has close links with US engineering companies building ethanol plants.
“One estimate is that around 80 new plants will be built in the USA during 2006 and 2007,” he says. “Wholesale gasoline used to cost about 70 cents per gallon* before tax, but prices are now over 2 dollars per gallon in the USA and that makes ethanol competitive with gasoline even without the tax waivers.”
High oil prices have helped to substantially increase demand for ethanol as a fuel for cars. The market for enzymes for the production of fuel ethanol has grown correspondingly and Novozymes is the market leader. Brazil has been the leading producer of fuel ethanol for 25 years but the rapid expansion in the USA is challenging Brazil’s prominence. The USA is Novozymes’ largest market with a fuel ethanol production of 14.8 billion litres in 2005. Now the production of fuel ethanol is expected to move up a gear in other parts of the world.
Europe
Though maize (corn) is primarily used in the USA, the ethanol feedstock elsewhere varies depending on what crops are available locally.
Maize is not widely grown in Europe, where Novozymes is strongly positioned following the recent launch of three new enzymes: Viscozyme® Wheat, Viscozyme Barley and Viscozyme Rye. These have been developed specifically for the cereals that are used predominantly in Europe.
Novozymes’ enzymes increase the efficiency of fuel ethanol production and enable the processing of other cereals, not just maize.
The EU has set targets that fuel ethanol should account for 5.75% of energy consumption in the transport sector by 2010 and 20% by 2020. Sweden, Germany, France and Spain are among the European countries that have come furthest towards meeting the targets.
In Europe, there are currently 10 fuel ethanol plants where enzymes are used in the process. Seven use wheat, two use rye and one uses barley. There are also many large-scale dedicated fuel ethanol plants planned or under construction.
“Fuel ethanol is booming in Europe right now. Many projects are just waiting for the green light from investors,” says Lionel Picart, regional marketing manager for the fuel ethanol industry, who is based at Novozymes in Paris, France. “Business in Europe will expand in 2007 and 2008 when projects being planned will come into production. It takes about 18 months to build an ethanol plant,” he adds.
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The tropical cassava plant is a rich source of starch and is used in fuel ethanol plants in Thailand. |
He has closely followed the progress towards the latest new plant in Europe in France. Construction work began in May 2006 on this large new ethanol plant in Lacq in the south of France. The Lacq facility will be capable of producing 200,000 tons of fuel ethanol per year utilising maize and wine alcohol as the raw materials. It is the first fuel ethanol facility in Europe that will use maize.
The majority shareholder in the plant is Abengoa, the market leader for fuel ethanol production in Europe with three large plants in Spain. With a large production
of cereals, in particular barley, and favourable taxation on fuel ethanol, Spain is a pioneer in Europe and exports fuel ethanol to other European countries.
Interest in biofuels is growing in Eastern Europe too. For example, there is a plant under construction in Slovakia and several projects are being discussed in Bulgaria, Croatia, Hungary, Poland, Romania and the Ukraine, as well as in Kazakhstan.
Famous for its beverage alcohol in the form of vodka, Russia also has a couple of projects for fuel ethanol.
South Africa
South Africa has announced a programme for several fuel ethanol plants using maize, mainly driven by the big surplus of maize in the country. The construction of the first unit began in 2006 and the capacity will be 150 million litres per year. The same company plans to build seven more similar units within the next six years.
Australia
In Australia there are three fuel ethanol plants producing a total of 90 million litres per year. Two plants in Queensland use molasses while a third plant at Nowra in New South Wales run by Manildra uses wheat and sorghum. Manildra is the largest ethanol producer in Australia.
“After some unsuccessful attempts in 2001/2002 to get the ethanol industry up and running, we regained momentum in Australia in 2005. What is driving this is developments in oil prices. With oil at 70 US dollars per barrel, ethanol is now looking more attractive, even without excise tax exemptions,” says Stuart Borthwick, industry sales manager at Novozymes for SEAIA (South East Asia, India and Australia), who is based in Sydney. “The Australian federal government’s target for 2010 is a production of 350 million litres. Four new plants are planned in Australia to process wheat and sorghum, so we could see some growth here in 12-18 months,” he adds.
China
China is by far the leading country in Asia for fuel ethanol production with an output of 3.8 billion litres in 2005. There are currently four plants in production that convert several million tons of maize into fuel ethanol with the help of enzymes. All these plants have plans for expansion.
China also has ambitious plans to convert biomass such as rice straw into fuel.
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“In the USA, fuel ethanol plants are going up like popcorn!” comments Larry Peckous, a principal scientist in Customer Solutions at Novozymes in the USA. |
In June 2006, Novozymes announced a three-year cooperation agreement with CRAC (China Resources Alcohol Corporation) to conduct research into developing this new technology based on the enzymatic conversion of cellulose.
Thailand
The fastest emerging market for fuel ethanol in Asia is Thailand. The Thai government’s goal is to use ethanol to replace the additive MTBE in gasoline.
There are very favourable conditions in Thailand including an excise tax exemption for ethanol and an income tax waiver for investors for the first eight years. Thailand’s production capacity was planned to reach 1 million litres of fuel ethanol per day in 2006 and there are currently four plants using molasses and two using cassava with a third cassava-based plant scheduled to start production in December 2006.
The target is to produce 3 million litres of fuel ethanol per day by 2011 and licences have been granted for building at least 14 plants using molasses and four new plants using cassava.
In June 2006, Novozymes representatives attended the Greenpower Biofuel Conference in Bangkok in Thailand with about 150 delegates representing various suppliers and agencies with a stake in the biofuel market. Larry Peckous from Novozymes in the USA gave a presentation. After the conference, Novozymes showed its commitment to Thailand by hosting a seminar that was attended by 35 people from 15 companies including those currently doing trials and building factories. The seminar was arranged by Beng Chung Ong, who is regional business manager at Novozymes in Malaysia. Larry Peckous was invited as one of the main speakers.
“I was bombarded by hundreds of questions,” he commented. “Because the USA started on the path of fuel ethanol production several years earlier than most of the world, we have a lot of experience to share.”
High gravity fermentation
One of the hot topics they wanted to hear about was high gravity fermentation. This technology allows less water to be used and as a result less energy is needed for cooling, heating and evaporation. Plants can also be dimensioned slightly smaller.
“Anybody can make 12% ethanol,” comments Larry Peckous. “A few plants can make 20% ethanol if they are highly efficient, but 15% ethanol is still a perfectly healthy target to aim for. Remember, 20% of the cost of ethanol production is energy-related. Here’s where you can save money.”
The experts in Customer Solutions at Novozymes can offer many tips for newcomers to the fast-growing fuel ethanol industry. Not least, new customers around the globe can benefit from Novozymes‘ insight into the fuel industry based on 20 years‘ experience from the USA.
* 1 US gallon = 3.8 litres