ST2-08: Cellulosic ethanol commercialization - what's it going to take?

The 2007 US Renewable Fuels Standard established a goal of 16 billion gallons of domestic cellulosic ethanol production by 2022. Along the path to that 16 billion gallons, annual interim targets have been set, including 250 million gallons for 2011. Yet it is likely that fewer than five million gallons will be produced this year.  What is the nature of the problem and is there a solution? While describing  the policy rationale behind such ambitious targets, the main focus of the presentation will address technology, market, and performance risks associated with cellulosic ethanol commercialization, and suggest which parties should take responsibility for what risks. It will further address the challenges of project finance, and answer the key question: "What will motivate investment in commercial scale cellulosic ethanol projects?" Once the investment problem is understood, a policy solution aimed at overcoming the concerns of risk averse investors will be described. The role of Government in such a proposed policy solution will be discussed with an emphasis on: "Should Governments "subsidize" the commercialization of this nascent industry?"