Biofuels investor sees ethanol shakeout looming; small producers must go “low cost” or be consolidated

A prominent biofuels investor said that he foresees a shakeout in the ethanol industry, and more consolidation as single plants are either consolidated, fail, or emerge as low-cost producers. He said that the ethanol industry had to urgently reduce costs to be able to survive without subsidies, suggesting that ethanol plants should be prepared to be viable even if the price of oil were to drop to $25-$30 per barrel.

The venture capitalist, Sano Shimoda of BioScience Securities, was speaking at the Renewable on Parade conference.

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