Each day, cellulosic gets closer to becoming commercially viable in the marketplace. Two weeks ago, a major hurdle was overcome with the announcement that Novozymes’ enzyme Cellic® CTec2, used for cellulosic ethanol production with feedstocks such as corn stover and corn cobs, is now 50 cents per gallon. I had the opportunity to learn more about this breakthrough when I sat down with Thomas Videbaek, Executive President of Novozymes BioBusiness, at Commodity Classic.

Videbaek explained that Cellic is the first commercial product for cellulosic ethanol. With Cellic, you’ll be able to produce cellulosic ethanol using an enzyme cost of about 50 cents per gallon. “With this, we think that the enzyme part of producing cellulosic ethanol has been cracked,” said Videbaek. “Now we need to get out and starting producing it and we’re really, really excited about that.”

Novozymes is a partner with POET’s Project Liberty which will produce ethanol from corn cobs. I asked Videbaek for an update and he believes that with the enzyme breakthrough they will be able to produce cellulosic ethanol for around $2.35 per gallon. However, the expectation is that once Project Liberty is up and running, the cost will be reduced to around $1.90 per gallon. This will be monumental in that it will break the $2.00 per gallon barrier challenge of producing cellulosic ethanol.

This was a massive project for Novozymes who has been working on it for more than five years. “It’s the biggest project we’ve ever carried out,” said Videbaek. There were more than 150 people working on it in the past year alone.

In addition to corn stover and cobs as a feedstock, they are also working with wheat in Europe and have an operational pilot plant in Denmark. In addition, they are working with Brazilian ethanol producers to develop an enzyme to break down the bagasse.

You can learn more about Cellic by listening to my full interview with Thomas below.

Last September, the G-20 leaders announced during an event in Pittsburgh, that they are committed to phasing out controversial fossil-fuel based subsidies. According to the Global Subsidies Initiative, the G-20 leaders blame subsidies for encouraging wasteful consumption and undermining efforts to combat climate change. Referencing studies by the Organization for Economic Cooperation and Development (OECD) and the International Energy Agency (IEA), the G-20 said that “eliminating fossil fuel subsidies by 2020 would reduce greenhouse gas emissions in 2050 by ten percent.”

Last month, the preliminary report was released, “Analysis of the Scope of Energy Subsidies and Implementation of Phasing Out” written by researchers from the International Energy Association (IEA), World Bank, the Organization of Petroleum Exporting Countries (OPEC) and the Organisation for Economic Co-operation and Development (OECD). The report has found that the world could spend in excess of $500 billion each year to subsidize fossil fuels.

In response to this early draft, Tom Buis, with Growth Energy, an organization that represents the US ethanol industry said, “This study confirms what millions of Americans have known all along. Our addiction to oil has a devastating impact on our nation’s economy and energy security, as well as that of nations around the world. By increasing the production of domestic, renewable ethanol, we will not only enhance U.S. national security and green our environment but dramatically reduce the transfer of wealth that occurs today, keeping more money and jobs here at home at a time when it is needed most.”

Buis concluded, “Further, by learning many of the agricultural innovations that the U.S. uses today for farming and ethanol production, developing nations can benefit from both food and fuel production, helping them to become more energy independent and grow their economies.”

pDespite a sluggish economy and challenging growing conditions for corn farmers, ethanol production set a record once again in 2009 of more than 10.75 billion gallons./p
pimg hspace=”9″ vspace=”0″ align=”right” class=”right” style=”float:right;margin: 0 0 0 9px;”/According to the latest statitstics from the a href=”http://www.eia.doe.gov/” U.S. Energy Information Administration /a(EIA), ethanol production reached yet another all time high in December 2009 at 787,000 barrels per day, even though ethanol demand, as calculated by the a href=”http://www.ethanolrfa.org” Renewable Fuels Association (RFA)/a, fell to 750,000 b/d in December. /p
p“Despite trying economic circumstances, America’s ethanol producers once again rose up to meet the challenges the nation has put before it,” said RFA President Bob Dinneen. “Moving forward, once-idled facilities are restarting and new biorefineries are coming online to ensure that the volumes of ethanol called for in the Renewable Fuels Standard are met by domestic supplies.”/p
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