Center for Advanced BioEnergy Research, University of Illinois at Urbana-Champaign

Monday, January 14, 2008

Next-generation biofuels edge to center

By Timothy Gardner

NEW YORK (Reuters) - The quest by executives and venture capitalists to build a next-generation biofuels industry has made strides this year as oil reached $100 a barrel and the world's largest energy consumer laid down ambitious new mandates for alternative fuels.

Prices for the agricultural commodities that traditional biofuels are made from have soared to historic levels in recent months on global demand for both fuels and food, driving up all grain prices and hurting customers ranging from Mexican peasants to U.S. beer makers.

The price of corn, the traditional U.S. feedstock for ethanol, has hit an 11-year high, while soy, the country's main ingredient in biodiesel, set a record this week, adding further incentives to kick-start non-food sources for alternative fuels.

Cellulosic ethanol, a fuel that can be made from grasses and wood pulp, holds promise, but the first trickle of that fuel into the ocean of global motor fuel is not expected for at least four years.

"I think cellulosic ethanol will come. The question is how high will the price of food crops have to go before it becomes profitable to use new materials to make new fuels," said Lester Brown, the president of the Earth Policy Institute, who had predicted last year that corn prices would spike.

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