Thought Leadership: The Digest speaks with Sebastian Soederberg, Novozymes’ VP for Biomass Conversion

February 3, 2015 |

Sebastian-Soderberg-downloadTell us about your role at Novozymes.

I’m responsible for Novozymes’ biomass activities on the commercial side; I’ve been doing this for close to three years. My background is as an economist and investment banker.

Novozymes began its efforts in this area in 2001 with more than 100 scientists and a lot of public affairs work. Starting in 2011 we saw the industry and some of the participants construct commercial-scale plants, going into early state of commercialization. What I have been focused on is to continue our collaboration, turn those into commercial agreements and build a commercial organization globally to support that.

Where did you go to school?

I have a Masters from Copenhagen Business College and I spent one year studying in Madrid.

Who are your mentors?

Don’t have one specifically; I get inspiration from a lot of people. But I would mention my parents.

What are your hobbies?

I love skiing, biking, time with the family, and hunting.

What are you reading right now?

A lot of different stuff both related to work and fiction, also leadership books. There seem to be always 2 or 3 books I am reading at the same time, but mainly I read during vacation.

Do you have a favorite place in the world for a holiday?

There are a lot of places!  Mountains, forest and the sea, I like a little bit of everything.

Turning to biomass conversion, what do you see as “the hottest geographies” right now?

It’s clear that there are some fundamentals that are very healthy in Brazil, and we still see potential and momentum there. But I see a lot of activity across the globe, and I wouldn’t say there’s one over another. We have projects continuing to develop in the US, Europe, Southeast Asia, China, Brazil and elsewhere in Latin America. Some people mention Asia simply because there are some more concrete projects developing and maturing. But it’s projects we have known of for some time. We see steady development across the globe.

What do you see as “the hottest feedstocks”?

Obviously the first plants are based on sugarcane bagasse tops and leaves, and corn stover. But Novozymes is focusing development efforts on multiple feedstocks because we believe some of the things that will get more attention later on are probably energy grasses or cane, different straws, could be some of the wood-related biomass substrates, hard or soft wood. And, due to the activity in south Asia, there could be a lot of activity with rice straw or palm waste. And we see great interest in MSW. We are paying close attention to all these possibilities.

Where do you see the industry in terms of development?

The industry is in a very critical validation phase. These plants coming on-stream have to prove they can run consistently at full nameplate capacity, and then it’s about the production economics against other biofuels, also compared to oil.

It will take time for the industry to validate, so it’s not a case where we would see hundreds of new projects at a time. It’s a big step from practicing a game on a computer to a big field project.  There are a lot of learnings happening.

Already last year we’ve seen with the deployments that everyone is focused on getting robust capacity and performance, and we are waiting expectantly for this to generate enough confidence to invest in the second wave. Based on what we see, most of the players are encountering challenges but are amping up slowly yet securely, And we see additional companies and technology providers who we expect will make decisions soon, in addition to the 6-7 players who are already on-stream.

Right now, the challenges are more of a mechanical nature, de-bottlenecking the designs and the industry. We are 100% committed to untying knots.

How does this technology wave compare in length and complexity to other technology waves, in other sectors and times?

We’re encouraged by what we see. We can look for inspiration at the pattern of development seen in the wind, solar and starch-based biofuels, as well as other emergent technologies. We think it’s about managing expectations, because industry can get overly excited about an early stage of commercialization. Right now, it’s about validation and ensuring further learnings before we see the next wave of investments.

There’s no reason to believe we shouldn’t succeed. Of course we always like to see things happen faster, but it’s probably not realistic. We all need to remember that building an emergent industry is a marathon, not a sprint.

What is the most important challenge in front of the industry?

Besides overcoming the mechanical ramp-up challenges, I think one of the things needed is related to how the industry is working together. Novozymes is encouraging the players and industry to unite and work together for greater impact. For this effort, we need broader shoulders, we need some of the players in the value chain to come together and help de-bottleneck some of the challenges.

In addition, the industry needs to produce more consistent communication. Beyond the technical advances, we need to be reminding investors, governments, the media and other stakeholders that this industry is built on long-term economic and environmental factors that are not going away, whatever the price of oil. For example, remind them of the fact that, according to estimates published by the OECD/IEA and the International Monetary Fund (IMF) World Economic Outlook, the total number of cars in the world reached about 760 million in 2013 and will likely double by 2030 to 1.4 billion cars, reaching 2.9 billion cars by 2050.

What’s the financing outlook right now?

We are not seeing the inflow of investment from pension and infrastructure funds yet, mainly due to immaturity of the industry. However, we haven’t seen first-mover investors pulling back either. The players are putting steel in the ground with a long-term view. We continue to see regional development banks supporting projects, and consortiums of strategic players making investments. Compared to the development patterns seen in other emergent industries, this is completely normal. Remember, it’s a marathon.

Novozymes (and other players) have been active in the industry for nearly 15 years, and in 2001 the oil price was $20-$30. Right after that it fell to under $20. Since 2009 it’s been above $75. So it’s fair to say that commodity prices fluctuate. Regardless, Novozymes is here for the long term, and we don’t see any change in the long-term, growing need for clean, sustainable transport fuel. Who knows what the price of oil will be in 2025?

Despite price fluctuations, you could say that as an investor, the recent drop in the oil price is creating uncertainty about competitiveness – but the blending mandates help remove the direct correlation, at least in the short term.

If oil prices stay low? It will just increase the technical performance goal we have to hit as an industry.

Print Friendly, PDF & Email

Tags: ,

Category: Thought Leadership, Top Stories

Thank you for visting the Digest.