Wednesday, February 11, 2009

Biofuels or biochemicals: Are you ready to get in? (2)

According to the report from Ethanol Producer Magazine, the cellulosic ethanol project with $30 million DOE fund was suspended by Lignol and Suncor. The reasons disclosed are instable energy prices, capital market uncertainty and general market malaise. However, although the technology was not listed as a reason, I guess at least a cost-effective well-developed technology is not ready yet since Suncor will continue to monitor the progress of Lignol's technology.

I feel that it is very wise for both partners to make such a decision at an early stage in the project’s development and no significant costs have been incurred. They are serious about cellulosic biorefining.

My question is: what will happen if they continue to proceed the project with the government funding, or with misleading information? What about other players?
These days, biorefining has been driving by a lot of aggressive and ambitious objectives. The good news is that it can attract more attention and investment;on the other side, technology can not be well developed overnight. A gap often occurs between the ambitous goals and the timeline of available technology development. As a result, if unrealistic goals have been set with significant investment, the risk is not far or near around no matter how we are aggressive or smart or very supportive. In the process, realistic and objective evalution must be provided.

It is great lesson for us to learn from this wise decision.

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