Commercial Production of Cellulosic Biofuel on Fast Track in China

05-31-2010: Novozymes, COFCO and Sinopec signed a Memorandum of Understanding covering the next steps towards commercialization of cellulosic biofuel in China. As part of the agreement, COFCO and Sinopec will build a cellulosic ethanol demonstration plant which Novozymes will supply with enzymes. The new plant comes online in the third quarter of 2011 and will produce three million gallons of bioethanol made from corn stover a year. In February, Novozymes launched new Cellic® CTec2, an enzyme product enabling the biofuel industry to produce cellulosic ethanol at a price competitive with gasoline and conventional ethanol.

“In 2009, we forged this partnership in China to develop biofuel from agricultural waste; today, we are one step closer to producing commercial quantities,” said Michael Christiansen, President, Novozymes China. “With gasoline prices hovering around $4 per gallon in China, companies across the country are reaffirming their commitment to investing in development of clean, alternative fuel sources.”

The new plant will be the largest demonstration facility converting agricultural waste into biofuel in China. China has an adequate supply of biomass, and agricultural residues alone exceed 700 million metric tons annually. A 2009 study by Novozymes and McKinsey showed that by converting agricultural residues into fuel ethanol, China can reduce its gasoline consumption by 31 million tons in 2020, thereby reducing its dependence on imported petroleum by 10% and abating 90 million tons of CO2 emissions. By doing so this industry will create 6 million direct jobs, resulting in an RMB 32 billion – around $4.7 billion – income increase annually.