Danish enzyme manufacturer Novozymes has unveiled a new enyzme it claims will make the cost of cellulosic ethanol production competitive with that of corn ethanol and gasoline.

The enzyme, Cellic CTec3, performs 1.5 times better than the company’s market-leading Cellic CTec2, and biofuel producers will need to use only one-fifth as much of it compared to competing enzymes, says Steen Riisgaard, Novozymes’ CEO.

“This is a huge step forward in the transition from an oil-based economy to a bio-based economy,” says Riisgaard. “The first plants start commercial production of advanced biofuels this year. Novozymes has signed supply deals with a number of the leading players in this field, and we’re thrilled to supply the enzymes that will enable an advanced biofuels industry and contribute to job creation, economic growth, and energy security.”

The companies M&G and Fiberight are expected to be among the first to open commercial-scale cellulosic ethanol plants, and both will use Cellic CTec3, according to Novozymes officials.

M&G is scheduled to open a facility in Crescentino, Italy, producing 13 million gallons of ethanol per year from wheat straw, energy crops, and other locally available feedstocks. Fiberight is preparing to open a small-scale plant in Lawrenceville, VA, this year, and a plant producing 6 million gallons per year in Blairstown, IA, in 2013. Both plants will convert municipal solid waste into biofuel.