Danisco backs Novozymes' 2nd-gen biofuel cost view

COPENHAGEN, March 18 Thu Mar 18, 2010 11:18am EDT

COPENHAGEN, March 18 (Reuters) - Danish food ingredients and enzymes maker Danisco DCO.CO "agrees fundamentally" with rival enzymes producer Novozymes' view of the costs of producing second-generation bioethanol, Danisco's chief executive said.

Novozymes (NZYMb.CO) and Danisco last month launched new enzymes for producing second-generation biofuels -- fuels made from plant waste rather than food crops -- and Novozymes said then that fuel production costs could be less than $2 per gallon.

Novozymes also said in mid-February that enzyme costs for cellulosic ethanol are now down to $0.50 per gallon.

"We are talking about the $2 range -- 50 cents on enzymes costs," Danisco Chief Executive Tom Knutzen told analysts in a conference call on the group's third-quarter results. [ID:nLDE62H135]

"We are basically saying what another big industry player is also saying, and we fundamentally agree," he said in response to a question about what he thought of Novozymes' view of second-generation bioethanol production costs.

Knutzen said that Danisco enjoyed a competitive advantage in the business through its joint venture with Dupont (DD.N) in helping keep down capital costs of building plants for second-generation biofuels.

"So at least we have the feeling that we are certainly on par and with a likelihood that we are ahead to come up with the best commercial offering to the market before too long," he said. (Reporting by John Acher)

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