Cellulosic Ethanol Faces Obstacles
By Pork news source
| Monday, November 30, 2009
Several factors continue to hamper advancement of the cellulosic ethanol industry, according to Cole Gustafson, North Dakota State University biofuels economist. Obtaining capital to finance the commercialization of new technologies required for production is the first obstacle says Gustafson.
Problems on Wall Street following the collapse of the financial markets also hold back development of the new biofuel development. In addition, federal loan programs for cellulosic biofuel producers are not tailored to the size and scope of next-generation biofuel plants, according to Gustafson.
On Oct. 29, the U.S. House Committee on Agriculture conducted hearings to evaluate the usefulness of federal loan programs and stimulus money targeted toward cellulosic ethanol. Mascoma, a company at the forefront of cellulosic ethanol development, recounted that it had contacted nearly 200 lenders in an effort to obtain financing, but found only two who would work with it. The company eventually ended up without any federal loan funds due to technical difficulties in the program.
The Coskata Company presented a list of 12 diverse technologies to produce cellulosic biofuel. It argued that a wide range of feedstocks should be considered viable for conversion to biofuel. The company said this would broaden geographic opportunities and reduce market pressure on a single commodity. As it is, the productivity of different feedstock and technology combinations are difficult to discern and create anxiety on the part of lenders searching for production benchmarks.
Several companies were critical of federal loan provisions that were too narrow or favored specific types of technologies. There is a wide array of potential feedstocks being researched for cellulosic ethanol, but most federal loan programs prioritize feedstocks that qualify. This limits the development of alternative technologies.
Source: NDSU Extension Service
