Dong and Novozymes Win $53 Million From EU for Bioethanol Plant

Dong Energy AS and Novozymes AS won 39 million euros ($53 million) from the European Union to build a plant in Denmark that will use straw to produce clean fuel.

The companies were awarded the money from the European Commission’s NER300 program for low-carbon projects. The project is expected to cost 295 million euros and create as many as 2,500 jobs during construction, Thomas Maxe, a spokesman for Maabjerg Energy Concept IS, the group of companies behind the development, said today by e-mail. Waste heat will be used to provide 20,000 homes with clean heating and hot water.

“European Union funding is a crucial step, but we also need to be sure we can sell the 80 million liters of second-generation bioethanol that we plan to make,” Jorgen Udby, chairman of the board at Maabjerg Energy, said in a statement on its website. “To ensure that, we need a political and legal framework setting a minimum level of second-generation biofuel additives in gasoline.”

The EU last month proposed a 7 percent cap on food crop-based biofuel that counts toward a 10 percent target for renewable transport fuel by 2020. First-generation biofuel from edible crops has been blamed for raising food prices. The bloc also set a minimum level of 0.5 percent for second-generation biofuel, which doesn’t use food crops.

“We have information that a number of European Union member states are very close to decide higher national levels for second-generation biofuel additives,” said Udby. A final decision on whether to proceed with the facility is expected in the last quarter and depends on whether EU member states provide enough support for the fuel. Construction may start next year and production in late 2017, Maxe said.

The facility will be part of the wider Maabjerg Energy Concept project that’s being developed by a group of companies that include local utilities. The project includes an electricity and district heating plant and a biogas system.

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