Jul 22, 2009

EPA's cellulosic ethanol estimates proved wrong by fraudulent company

The EPA issued a report not long ago stating that the U.S. would produce 100 million gallons of cellulosic ethanol in 2010, with 70 percent of this production expected to come from a single company in Alabama called Cello Energy. The EPA might have put a few too many eggs in a single basket this time.

Cello Energy was recently found guilty of fraud in a federal court in Alabama. The court found the company lied to a major investor about their ability to produce ethanol sourced from non-feedstock materials and was passing off an oil-based product as cellulosic ethanol. Whoops.

Cello now needs to pay $10.4 million in damages. What does this mean for the U.S. cellulosic ethanol market? If domestic producers can't reach the 100 million gallons target, then the Government can issue credits that would allow producers to be paid up to $3/gallon. Alternately, the industry will be given additional time to meet the goal.

[Source: Green Car Advisor - VIA AutoBlogGreen]