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"After a decade of promise, advanced biofuels makers are entering a crucial make-or-break period with the first of a new generation of production facilities about to come on line.
The new facilities are designed to take biofuels beyond corn-based ethanol and begin to shift the industry to "advanced" fuels made with a lower carbon footprint derived from products that will not compete with demand for food.
Many of the companies are turning to cellulosic plant materials, animal waste and plant oils to churn out millions of gallons of ethanol, diesel, jet fuel or components for gasoline.
Driving the industry are U.S. government targets stretching out a decade that call for fuel suppliers to blend billions of gallons of the new biofuels into the U.S. gasoline and diesel pools, on top of the corn ethanol that already makes up about 10 percent of the gasoline market.
The targets have helped biofuel companies develop strategies and lay out expansion plans, but they do not rely on the tax incentives or subsidies that helped the solar and wind industries.
Aside from the federal volume targets, "these guys in almost all cases are not relying on subsidies," said Rob Stone, an analyst at Cowen & Co in Boston.
But even with the growth and new investments, investors will likely have to wait for the technology to prove itself over the coming years before receiving big payoffs.
Among the most anticipated of the new production plants is KiOR Inc's Columbus, Mississippi, facility. The company expects to begin production in the second half of 2012 and turn wood products into components, or blendstocks, that can be used in gasoline and diesel fuel.
The KiOR plant will process farmed Southern Yellow Pine trees at the equivalent of about $25 per barrel of oil, or about one-quarter the price U.S. crude oil.
Nearly 400 million gallons of new biofuels production is expected to go on line this year in the United States, according to data compiled by industry publication Biofuels Digest."
"After a decade of promise, advanced biofuels makers are entering a crucial make-or-break period with the first of a new generation of production facilities about to come on line.
The new facilities are designed to take biofuels beyond corn-based ethanol and begin to shift the industry to "advanced" fuels made with a lower carbon footprint derived from products that will not compete with demand for food.
Many of the companies are turning to cellulosic plant materials, animal waste and plant oils to churn out millions of gallons of ethanol, diesel, jet fuel or components for gasoline.
Driving the industry are U.S. government targets stretching out a decade that call for fuel suppliers to blend billions of gallons of the new biofuels into the U.S. gasoline and diesel pools, on top of the corn ethanol that already makes up about 10 percent of the gasoline market.
The targets have helped biofuel companies develop strategies and lay out expansion plans, but they do not rely on the tax incentives or subsidies that helped the solar and wind industries.
Aside from the federal volume targets, "these guys in almost all cases are not relying on subsidies," said Rob Stone, an analyst at Cowen & Co in Boston.
But even with the growth and new investments, investors will likely have to wait for the technology to prove itself over the coming years before receiving big payoffs.
Among the most anticipated of the new production plants is KiOR Inc's Columbus, Mississippi, facility. The company expects to begin production in the second half of 2012 and turn wood products into components, or blendstocks, that can be used in gasoline and diesel fuel.
The KiOR plant will process farmed Southern Yellow Pine trees at the equivalent of about $25 per barrel of oil, or about one-quarter the price U.S. crude oil.
Nearly 400 million gallons of new biofuels production is expected to go on line this year in the United States, according to data compiled by industry publication Biofuels Digest."