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Sunday, November 22, 
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Will federal ethanol subsidies trickle down to seed developers?

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corn2.jpgAs the ethanol industry gears up to meet ambitious demands, its lobbyists have recently managed to put in place in legislation that mandates a nine-fold increase in production, to 36 billion gallons by 2022. And the federal government is stepping up assistance with research to help it get there. A Feb. 26 UPI story notes that at the end of January, the U.S. Department of Energy announced $114 million in grants over the next four years for four small-scale biorefineries using non-traditional sources.

The legislation demands that the industry wean itself away from "Monsanto Moonshine," corn ethanol derived from genetically modified corn seed produced by the agricultural chemicals and transgenic seed giant. Instead, the mandate is to get 21 billion gallons of the total from non-food crops, such as switchgrass, or biomass, like wood chips. The bulk of the government goodies will go to the largely project-financed plant developers, but the story notes that some of the subsidized plants will use cellulosic feedstock provided by Ceres Inc., which closed a $75 million venture deal last September led by Warburg Pincus.

Ceres' foot in the door could offer hope to other venture-backed seed developers, such as CellFor Inc., Mendel Biotechnology Inc. and Targeted Growth Inc., that federal money may trickle down to the biotechnology developers of better biofuel feedstock. In a post yesterday on the biofuelsandclimate blog, Ceres CEO Richard Hamilton discusses the role biotech developers will play in the industry. - Clifford Carlsen

See Feb. 26 story from UPI
See Sept. 2007 story from Tech Confidential
See Feb. 27 post from biofuelsandclimate
See Nov. 2007 story from Tech Confidential
See Oct. 2007 story from Tech Confidential
For more see GristMill, Biopact and biodieselinvesting

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