Lars Hansen, President of Novozymes Europe and a Chair at the upcoming EFIB 2011, conference talks about the biobased economy in Europe:

Q: Biofuels, and especially the second generation or advanced biofuels, are an integral part of the biobased economy. Where do we stand in Europe compared to the rest of the world?

The European Union has set itself a target for using 10% of energy from renewables in passenger cars by 2020. This mandatory target will mainly be fulfilled by biofuels as it is the only technology available today that can contribute to reduce greenhouse gas emissions in the transport sector.

This increasing demand for biofuels requires sustainable biomass resource to produce them. The feedstocks and production technologies that are currently deployed already provide a significant contribution, but will not be sufficient to reach Europe's ambitious climate and energy objectives. Advanced biofuels - i.e. sustainable biofuels with a broader raw material base (incl. waste and residues) will need to be deployed to cover an increasing share of European transportation energy needs by 2020.

Technology-wise, Europe has the lead on advanced biofuels. We have been the first to develop the technology that enables the production of advanced biofuels based on waste and residues. In recent years, several advanced biofuels demonstration plants were built in Europe. The latest and most promising development is the groundbreaking for the cellulosic ethanol plant of Mossi & Ghisolfi Group in Crescentino, Northwestern Italy. It is the first commercial scale facility in the world, ten times larger than the largest demonstration facilities in operation today.

This is happening in Europe and is promising but other global economies are also looking into the potential of advanced biofuels and the bio-based industry. The US Energy Department announced in early June it will provide a $105 million loan guarantee to help finance the first commercial-scale cellulosic ethanol plant in the country, to be operated by POET in Iowa.

As you can see, Europe has the lead but other regions are catching up and may invest more in ensuring the technology does not remain at the demonstration stage but is actually deployed. By maintaining its focus, Europe can stay in the leading seat.

The European Union has set among its priorities to build up a bio-based economy by 2020 and we should all ensure this objective does not go unheeded.

Q: What can policy do to help supporting the development of this market?

Financing is one of the biggest challenges to scaling up advanced biofuels, as a first step toward the bio-based economy. In order to create a market for advanced biofuels and the bio-based industry in general, the financial hurdle needs to be overcome.

Policy plays a key role in supporting the market deployment of new technologies by helping lower the cost of production and secure demand. Introducing a specific target for advanced biofuels, removing technical barriers, providing loan guarantees and incentives for early stage plants and supporting biomass development and collection throughout Europe are among the required policies that can help the development of a market for bio-based products.

Q: Novozymes, in collaboration with Bloomberg new energy finance, made a study on the impact of the bio-based economy on agriculture in Europe. What are the main findings?

The study explores how agricultural residues - if they were harvested and turned into a variety of bio-products - could help diversify farmers' revenues and build a next generation bioproduct value chain in Europe over the next decade.

The overall conclusion is unequivocal: the agricultural residues present a unique opportunity for farmers to make additional revenues without altering their current agricultural land-use patterns.

Using agricultural residues would clearly provide an excellent opportunity for economic growth in the agricultural sector, creating new jobs and ensuring investments flow in tomorrow's rural infrastructures. Besides, the building up of this bio-based economy would decrease our energy dependence, lower Europe's crude imports bill and last but not least reduce our carbon footprint.

The bio-based economy should therefore be central in the Common Agricultural Policy (CAP). It would contribute to make Europe's agricultural sector greener, more competitive and innovative, using industrial biotech solutions.

However, the study warns about the existence of barriers preventing the EU from unlocking this potential and stresses the role policy-makers should play to ensure all benefits are reaped sooner than later. For example, they could incentivise the collection of agricultural residues, introduce a specific mandate for advanced biofuels and use the CAP and other EU funding instruments (such as the rural development fund and cohesion fund) to stimulate agricultural innovation.

You can hear Lars Hansen chairing the plenary session on day 1 of the EFIB 2011 conference. Click here to find out more >>