A next-generation biofuels producer has formed a strategic partnership with the world's largest supplier of industrial enzymes in a move they hope will kickstart the sector's growth.
Novozymes has paid $115 million for a 10% stake in Beta Renewables - part of Italian company Gruppo Mossi & Ghisolfi and the operator of what it claims is the world's largest cellulosic ethanol plant in Crescentino, Italy.
Beta Renewables will sell its own 'Proesa' technology for turning waste and non-food crops into biofuels alongside Novozymes' enzymes, and the two companies will jointly market, demonstrate and guarantee the performance of their products, making it easier for projects to access funding.
Beta aims to help build 15 to 25 new plants in the next three to five years, which Denmark-based Novozymes estimates could add up to $175 million to its sales as a result of being the preferred supplier.
The tie-up comes days after the European Commission unveiled plans to cap the use of biofuels made from food crops in a move it hopes will encourage a boom in advanced biofuels, made from products such as waste, straw, or algae.
Although the European market for cellulosic biofuels has potential for expansion, the bulk of the opportunities are expected to be in the US and emerging markets in Latin America and Asia, Peder Holk Nielsen, executive vice-president at Novozymes, told Environmental Finance.
"This is about providing better guarantees to companies and about de-risking - we hope to see the market move faster than it otherwise would have done. Large-scale commercialisation of cellulosic biofuels is taking off, and this is a fantastic opportunity for Novozymes," he added.
"This type of complete offering will significantly de-risk cellulosic biofuel projects financially as well as technologically for our customers," said Beta Renewables' chairman and CEO, Guido Ghisolfi. "It will make cellulosic biofuel projects bankable and accelerate large-scale commercialisation of the industry."
In the past five years, Beta has invested more than $200 million in its Proesa technology. It is used in Crescentino, which is due to be fully up and running by the end of the year.
Beta recently secured a deal to build at least one plant in Brazil with GraalBio.
By. Peter Cripps
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