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Sunday, November 04, 2007

Biofuels Digest - business and financial news for ethanol and biodiesel producers, consumers and regulators

Helge: There is still a lot of room for R&D and unique innovations. This is a very new industry. What could we learn by looking back 100 years in time?

Biofuels Digest - business and financial news for ethanol and biodiesel producers, consumers and regulators: "The Lowdown on Biofuel Subsidies and Mandates November 2nd, 2007
Since the biofuel industry is young and capital-intensive, subsidies and mandates have been put into place to reduce the risk for investors, and increase the availability of capital for the rapid expansion of the industry.
The good news? Ethanol and biodiesel production has boomed in the United States. Ethanol production will reach 5.6 billion gallons this year - not a gigantic dent in the overall national fuel demand of 140 million gallons - but an impressive start.

Helge: We're looking into cellulosic ethanol and other added value products.

The bad news? Ethanol pure-plays like Pacific Ethanol (PEIX) are not exactly swimming in profits. In fact, their gross margins are down alarmingly thanks to the increased cost of corn and the reduced price of ethanol on spot markets as more production comes online. That’s one of the reasons why pure-plays have “risk” written all over the reports from analysts who follow their stocks."

Helge: Is corn the way to go? Big players are entering the market. This industry will be booming 2010 - 2015.


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