Issue Date: November 5, 2012
Novozymes And Beta Renewables Form Cellulosic Ethanol Partnership
Danish enzyme producer Novozymes and Italian cellulosic biofuels firm Beta Renewables are combining their technologies for manufacturing ethanol from cellulosic biomass to meet what they expect will be a multi-billion-dollar market opportunity.
Their agreement calls for Novozymes to acquire a 10% stake in Beta Renewables, a joint venture owned by the U.S. private equity firm TPG Capital and Italy’s Mossi & Ghisolfi, for $116 million in cash. The payment includes marketing fees and some intellectual property rights and is subject to Beta Renewables meeting certain milestones. Novozymes becomes a preferred supplier of enzymes to break down biomass in the Italian firm’s Proesa cellulosic ethanol process.
Novozymes, the world’s biggest enzyme company, forecasts that Beta Renewables will sign technology licensing agreements with third parties for 15 to 25 new cellulosic ethanol facilities during the next three to five years, netting the Danish firm total annual sales of up to $175 million.
The two companies will guarantee biofuel production costs upon start-up of customers’ ethanol facilities. “This type of complete offering will significantly de-risk cellulosic biofuel projects financially as well as technologically for our customers,” says Beta Renewables CEO Guido Ghisolfi.
In a briefing for analysts and journalists following the announcement of the venture, Novozymes was probed by JPMorgan Chase stock analyst Silke Kueck-Valdes about the scale of the opportunity for the enzyme firm. Peder Holk Nielsen, head of Novozymes’ enzyme business, responded that plants based on the Proesa technology will each likely produce 15 million to 40 million gal of ethanol per year but that enzyme consumption will depend on the type of biomass pretreatment selected.
The deal between the two firms comes just as Beta Renewables is commissioning the world’s first commercial-scale cellulosic ethanol plant, in Crescentino, Italy (see page 22). Other firms are also advancing cellulosic ethanol. Colorado-based start-up ZeaChem, for example, said it has completed construction of a 250,000-gal-per-year cellulosic ethanol facility in Boardman, Ore.
Not everyone wants to build plants, though. Late last month, BP ditched plans to build a $300 million cellulosic ethanol plant in Florida and says it now intends only to license its technology.
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