Financing Growth of Cellulosic Ethanol
AbstractThe U.S. biofuel industry is striving to produce ethanol from cellulosic feedstock sources in an effort to augment its existing corn grain-based ethanol production infrastructure. Technology to commercially produce cellulosic ethanol is rapidly advancing due in large part to the availability of substancial federal research and development funding. At the moment, several firms have pilot scale cellulosic ethanol production facilities under construction and testing. The transition from pilot scale to full commercialization of cellulosic ethanol will be difficult, due in large part financial constraints being imposed both internally and externally on the biofuels industry. This paper provides an overview of the biofuel industry’s current financial setting and describes future challenges it faces in attempting to expand. These challenges are rooted in lack of industry capital, limited availability of performance benchmarks, concerns regarding future prospects of the industry, and general uncertainty in U.S. financial markets. If the U.S. biofuels industry is unable to capitalize and develop this next phase of growth, foreign competitors, primarily Brazil and Mexico, appear well positioned to fill U.S. consumer’s demand for advanced biofuels.
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Bibliographic InfoPaper provided by North Dakota State University, Department of Agribusiness and Applied Economics in its series Staff Papers with number 44870.
Date of creation: Nov 2008
Date of revision:
biofuel cellulosic ethanol finance investment risk; Agricultural Finance; Resource /Energy Economics and Policy;
Other versions of this item:
- Gustafson, Cole R., 2008. "Financing Growth of Cellulosic Ethanol," Statistical Series Reports 44870, North Dakota State University, Department of Agribusiness and Applied Economics.
- Gustafson, Cole R., 2008. "Financing Growth of Cellulosic Ethanol," Environmental and Rural Development Impacts Conference, October 15-16, 2008, St. Louis, Missouri 53504, Farm Foundation, Transition to a Bio Economy Conferences.
- NEP-ALL-2008-12-14 (All new papers)
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- Jason Fewell & Cole Gustafson, 2010. "Do lender-imposed sweeps affect ethanol technology investment?," Agricultural Finance Review, Emerald Group Publishing, vol. 70(2), pages 169-183, August.
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