May 5, 2015 / 4:15 PM / 4 years ago

Novozymes to supply world's first sawdust-based biofuel refinery

COPENHAGEN, May 5 (Reuters) - Danish industrial enzymes maker Novozymes has struck a deal to supply the world’s first refinery producing biofuel from sawdust.

Novozymes is already a big player in the biofuel market, providing about 60 percent of enzymes used in U.S. production, which tends to use edible raw materials such as corn.

But the company sees a big potential market in making biofuels from inedible materials — so-called advanced or cellulosic biofuels.

The world’s largest industrial enzymes maker said on Tuesday it had agreed a deal with Finland’s St1 Biofuels, which will build and operate the refinery.

Novozymes will provide the enzymes.

The refinery will be in Kajaani in central Finland, which has a long history of timber production from which sawdust is a by-product, and should be ready in 2016, Novozymes said.

The Danish company’s enzymes speed up the fermentation process that turns raw material into ethanol fuel, helping to lower costs for biofuel projects that are often on the cusp of commerciality.

Novozymes is particularly looking to expand in advanced biofuels outside the United States, where regulatory uncertainty is holding back the industry.

It has struck deals recently to supply enzymes to plants in countries including Malaysia, Brazil, Italy and China. Some of these projects can undertake biomass conversion — where natural feedstock is turned not into fuel but, for example, plastics.

Reporting by Sabina Zawadzki and Alexander Tange; Editing by Mark Potter

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