InterviewEurope biorefinery industry lacks robust long term policy

15 July 2010 17:42  [Source: ICIS news]

By Franco Capaldo

LONDON (ICIS news)--Europe’s biorefinery industry must put in place a robust long term policy in order to give the market confidence and to drive its growth, an industry expert said on Thursday.

Lars Hansen, president for Europe at Danish biotech firm Novozymes, said Europe’s biofuels industry was lagging behind the likes of the US and South America, where the industry has been receiving strong political support in the way of renewable fuel mandates and subsidies.

The industrial biorefining industry (the conversion of biomass into fuels, energy and chemicals) has the potential to help mitigate the threat of climate change, expand the economy in the agricultural industry as well as cut the dependence on fossil fuels, Hansen said, adding that he believed there would be a paradigm shift away from the oil refinery industry.

“We consider sugar to be the new oil,” he said.

Last month, a new report by the World Economic Forum (WEF) announced that the biorefining industry had the potential to inject upwards of $230bn (€182bn) into the global economy by 2020 and create more than 800,000 jobs, with the US becoming the biggest benefactor.

The report also stated that the biofuels market alone was estimated to more than triple by 2020.

However, Hansen said that Europe was far away from becoming a main benefactor of this growth.

“It is a bit sad really…a lot of the technology has been developed in Europe but the application of this technology is being deployed in the US and South America. It is a shame the European public is not benefiting as much from biotechnology,” he said.

He added that the industrial biorefinery industry concept has been taking off in the US and Brazil first because there was very strong political pressures for the industry to grow.

In the US, it has taken the form of biofuel mandates: The Renewable Fuel Standard (RFS), first approved in April 2007, required US distributors to blend a minimum amount of renewable fuels into conventional fuel.

“That [the RFS] combined with subsidies, like tax credits, for the manufacturing or using of Biofuels creates a very solid, robust framework for the industry to work under,” Hansen said.

“That is what is missing in the European picture for the biorefinery industry to really take off in both the biorefuels area but also in the biobased chemicals industry,” Hansen said.

Hansen believed that Europe needed biofuel mandates and subsidies for both the buy and supply side for its biorefinery industry to be anywhere near its global competition.

Governments should also support the building of public/private partnerships to set up some big scale demonstration facilities to show that the technology worked outside of the test-tube, he added.

It was also important for governments to create solid regulatory framework to give companies the confidence of a sustainable future in the industry.

“You have reluctance from industry to borrow money as there are no long term commitments from the governments,” he said.

Hansen added that although countires like Brazil and the US have large resources of sugar cane, the basic building blocks for biorefineries, Europe could not use a lack of land as a real excuse as it also has enough biomass available for the industry to be successful.

“In terms of feedstock availability there is plenty of biomass. There are few places in European agriculture where everything is used up,” he said.

Hansen said Europe had been making some steps in the right direction, however he added that not enough was being done.

“The Renewable Energy Directive that came out last year, which calls for 10% use of biofuels in the transport sector by 2020, is now being slowly implemented – but it is not enough to take biorefinery in Europe off the ground.

Earlier this year, Novozymes, which is a global leader in industrial biotechnology, launched the first commercially viable enzymes for production of biofuel from agricultural waste, saying the breakthrough would enable cellulosic ethanol to compete with gasoline.

The technology worked on different feedstock types, including corn cobs and stalks, wheat straw, sugarcane bagasse, and woodchips and the cost was on par with gasoline and conventional ethanol at the current US market prices.

“It was like finding the Holy Grail - This was a really big deal for us [Novozymes] and gave us a big credibility boost,” Hansen said.

($1 = €0.79)

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By: Franco Capaldo
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