Novozymes expands bio-based activities

Danish enzymes producer Novozymes is a very busy company these days both in the areas of renewable chemicals and biofuels.

The blog already mentioned Novozymes’ collaboration with Cargill and BASF on sugar-based acrylic acid. The company also announced last month its development of a fungus that enables production of a chemical building block called malic acid, which can be used as a flavor enhancer or a feedstock to produce commodity chemicals such as 1,4 butanediol (BDO).

I tried to find more information on malic acid as this chemical building block is unfamiliar to me. According to Novozymes, malic acid belongs to the group of C4 dicarboxylic acids along with succinic acid and fumaric acid.

According to a 2004 biomass chemicals report by the US Department of Energy (DOE) –which you can download at the blog’s green files– secondary chemicals that can come out of malic acid include hydroxybutyrolactone and hydroxy succinate derivatives.

Malic acid is currently produced from fumaric acid or maleic acid, both derived from maleic anhydride, which in turn is produced from vapor-phased oxidation of hydrocarbons particularly butane. According to the DOE report, the conversion from fumaric to malic is done using fermentation.

Current applications for malic acid are mostly in the food and beverage sector. According to Novozymes, malic acid is added to enhance the sour flavor in products such as jellies, jams, juices and soft drinks.

Annual global market for malic acid is estimated at 60,000 tonnes and has a value of $130m with a growth rate of 4%/year. So if we do our math, we can estimate malic acid price at around $2,167/tonne or almost a dollar per pound.

In my recent interview with Novozymes vice president Rasmus von Gottberg, he noted that the company got into developing malic acid in the first place because of the company’s expertise in a fungus called Aspergillus oryzae, where malic acid has then been expressed. Von Gottberg said the company was able to come up with high yield and high productivity of malic acid with this fungus.

The company said it has been working with agribusiness firm Archer Daniels Midland (ADM) on the development of this building block. Both are no strangers in the food ingredients sector hence their interest in malic acid in the first place.

Von Gottberg said they have now completed the strain developments and are talking to companies from the food ingredients industry and chemical markets. Novozymes believes its malic acid technology can be competitive against the current petrochemical-based malic acid route.

In other news, Novozymes also announced last month that it will soon market a C5 yeast technology coming from its partner Terranol, a Denmark-based biotechnology company. C5 yeast is said to be an essential component in the production of cellulosic ethanol.

“Terranol’s C5 yeast is currently one of the best strains developed, and by getting it registered and marketed around the world, we can help make it available to the biofuel industry. This will provide a higher degree of certainty in the commercialization of cellulosic ethanol.”

Novozymes said C5 sugars such as xylose and arabinose are difficult to ferment and that Terranol’s C5 yeast is among the furthest developed in the industry. A yeast that ferments C5 sugars is essential to cost-efficient production of cellulosic ethanol, the company noted.

Speaking of cellulosic ethanol, Novozymes also noted on a recent press release that its partner Chemtex has been granted a $99m loan assistance from the US Department of Agriculture (USDA) under their 9003 Biorefinery Assistance Program.

Chemtex is planning to build a 20m gal/year cellulosic ethanol facility dubbed “Project Alpha” in North Carolina, which will use dedicated non-food energy feedstock crops to be grown in land being utilized as spray fields for the hog farming industry. Chemtex and its partners, the Biofuels Center of North Carolina, Novozymes, BB&T (Branch Banking & Trust), and the pork industry, will work with USDA and the State to move the project forward targeting a start-up date in 2014.

And before I end this post, I just wanted to point out how the enzymes market has been benefiting from the development and advancement of bio-based chemicals and biofuels. According to a report from investment firm Jefferies & Co. released in February this year, the global enzymes market was estimated at $2.6bn with detergent enzymes ($742m) accounting for the largest end-use followed by technical enzymes, food enzymes and animal feed enzymes (each worth $270m).

In technical applications (textile, personal care, leather processing, pulp & paper, biofuel, etc.), major players include Novozymes, DuPont (with its acquisition of Danisco in 2011), DSM, and ABF.