US to fall 71 percent short of 2010 cellulosic ethanol goal, report finds, as industry scrambles for finance; Obama recovery package eyed for $50 billion loan guarantees

A projection of cellulosic ethanol production finds that the US will fall 71 percent short of the 100 million gallon 2010 target set by the Renewable Fuel Standard. The ThinkEquity study projected that cellulosic ethanol production in 2010 will reach 28.5 Mgy, primarily based on the launch of a 10 Mgy demonstration-scale Range Fuels plant in Georgia, and a demo-scale BlueFire Ethanol plant in California that has run into financing difficulties for the proposed $130 million price tag. The study warns that a shortfall in production will trigger mandatory fuel credit purchases by blenders who miss their targets, and could result in higher fuel prices for consumers.

Meanwhile, the Obama transition team requested the Renewable Fuel Association to propose ideas for items to be included in the Obama economic recovery package. The RFA proposed a $1 billion short-term financing facility to help ethanol producers with current operations, a $50 billion federal loan guarantee program to assist with new capacity building, and a requirement that automakers receiving federal aid produce only flex-fuel vehicles commencing with the 2010 model year.

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