DOE Doles Out Bucks for Biofuel Producers

Written by Rachel Barron

Novozymes said Wednesday it scored $12.3 million from the U.S. Department of Energy to develop enzymes that would help cut the cost of producing cellulosic ethanol.

Enzymes are used to help break down the starch of cellulose feedstocks, such as switchgrass, corncobs and woodchips, and turn them into sugars. The sugars are then fermented and distilled to become ethanol. The government expects something in return for its investment. The deal calls for the Danish company to increase the efficiency of the enzymes by two folds.

To accomplish this goal, Novozymes will match the DOE's funding, bringing the total amount invested into the project to $25 million. The company said it will have the cost-cutting enzymes ready for the commercial market by 2012.

This is the second time the company has received funding from the DOE. In 2001, Novozymes bagged $18 million from the federal government, again to improve enzymes used in producing biofuels.

The company has received government support at a time when private industry investments are harder to come by. Doing research and building biofuel refineries are multimillion-dollar undertakings, but raising money will be difficult while the financial market continues to take its lumps. Commercializing biofuel technologies could take longer as a result, Arnold Klann, CEO of waste-to-ethanol company BlueFire Ethanol, told Reuters last week.

Still, the biofuel industry keeps moving forward. Here's a breakdown: