Or at least that's what the EPA has mandated. Well they mandated it back in 2005 because they, in their typical government alter-reality, believed that mandating some new product would magically make it appear. Problem is of the 500 million gallons that are required to be used this year there are.... 0 gallons available. That's right. None, zip, zilch, nada. There is not a single gallon in existence to be used in commercial applications. There is as much of this stuff out there to put in to your car as there is unicorns to harvest farts from.
What is cellulosic ethanol you ask? Basically it is ethanol made from the non-edible portions of plants, such as your grass clippings, or sawdust, or any other part of a living organism. Sounds good right? I mean I cut my grass I make some gas, chop down a tree, make some gas, sounds great sign me up.
George Bush claimed in 2006 that this stuff would be economically feasible and competitive by 2012, umm, about that.
Yeah, about that. See the problem is the tax credit isn't a sure thing, and investors are a little hesitant to get into the building of refineries when they won't be making any money in the near future.
So what happens when the government wants something that the private sector doesn't really see the need to invest in? They invest our money for us, because after all they know what the market needs, that's how we get things like Solyndra.
In January of 2011 Coskata Inc was given a 250 million dollar federal loan guarantee to build a 55 million gallon a year commercial plant. Shockingly that didn't happen. So in December of 2011 they filed for a $100 million IPO to raise the funds to build a plant in Alabama that would make 16 million gallons a year with ability to increase throughout the years.
From what I can tell from their own press releases the smaller refinery in AL starting in 2012. But I can't find out if the IPO went through or how much if anything they were able to raise from it. This is interesting since the original groundbreaking was suppose to happen in 2009.
I'm not picking on Coskata, from what I can tell they are trying to get it up and running using mostly private funds, but I could be completely wrong about that.
Here's is what it tells me though. Just because you wish something to be there, and mandate it so doesn't mean it will. This isn't like Field of Dreams, build the regulation and they will come meet it.
So because of this the actual oil refineries, you know the people and companies actually producing useable fuel right now, have had to file a suit against the EPA so that they don't have to buy credits for not using a fuel that doesn't exist. A fuel that isn't expected to churn out it's first billion gallons until 2018. A year that the EPA wants 7 billion used.
Of course if all of the other cellulosic ethanol plants are doing as well as the one being built by Coskata well I see no reason why we can't reach that goal.