Danish company Novozymes launched a new kind of enzymes to produce biofuel at a competitive price, the company said Monday.

The cost of cellulosic ethanol, or ethanol produced from agricultural wastes such as corn stover and wheat straw would be competitive against gasoline once their first commercial scale plants are operational in 2011, Novozymes CEO Steen Riisgaard told Xinhua.

"Our partners expect production costs to fall below US$2 per gallon (around 53 cents per liter)...and the cost will continue to drop in the future," Riisgaard said.

Riisgaard estimated that by converting agricultural residues into fuel ethanol, China could reduce its gasoline consumption by 31 million tons in 2020, thereby reducing its dependence on imported petroleum by around 10 percent.

The executive quoted a McKinsey report by saying that in that scenario China would reduce the emissions of about 90 million tons of carbon dioxide while this industry would create 6 million jobs and result in an increase in annual income of around 4.7 billion dollars.

Novozymes, a leading enzymes maker in the world, has allocated many resources to the project. It has also received development grants totaling US$29.3 million from the US Department of Energy.

"We have been working on this for the past 10 years and promised our customers and the market to be ready by 2010," said Riisgaard. "Biofuel producers now have a critical component to turn agricultural waste into a competitive alternative to gasoline."

Cellulosic ethanol uses enzymes to break down cellulose in biomass into sugars that can be fermented into ethanol.

Novozymes' new enzymes have proven to work on many different feedstock types, including corn cobs and stalks, wheat straw, sugarcane bagasse, and woodchips.

(Xinhua News Agency February 23, 2010)