The Wall Street Journal reports this morning on the challenges facing the fledgling cellulosic ethanol industry - considered a critical part of the U.S. government's plan to curb greenhouse gas emissions.
The story points to several issues including regulatory delays, and lack of credit for commercial-scale and pilot facility projects. Tight credit markets are one issue, and the U.S. Department of Energy - which has committed $1.3 billion for biorefinery projects hasn't been too quick to dole out the cash.
Another challenge is that the price of carbon hasn't really be set. This is a process that would occur if a cap-and-trade bill were passed. Without that, investor interest in the new-tech plants is low. These are factors that need to be solved before the new industry can move ahead.
And there is interest. Major oil companies including Royal Dutch Shell and BP have already invested in joint ventures with start-ups. There is a small amount of cellulosic ethanol production - currently representing less than 5% of the 100-million-gallong mandate proposed by Congress for 2010.
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