The Market for Cellulose Ethanol

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New report provides in-depth analysis of the market potential for cellulose ethanol.

The Market for Cellulose Ethanol

$80.00 a barrel? $4.00 a gallon? Political instability in the Middle East together with the catastrophic hurricanes of 2005 brought about sharp rises in the cost of fossil fuels, and, in some cases, led to acute scarcity. All Americans felt the impact, and, as a result, the US government, along with state governments and the nation’s energy industry, have ramped up support for alternative energy sources, particularly cellulose ethanol.

“The Market for Cellulose Ethanol,” a 135-page report published by, is a comprehensive analysis of how cellulose ethanol is produced, how cost-effective it is, the growth drivers promoting the use of ethanol over other fuels, the barriers to market, and more. The report also focuses on the steps the US government is taking to promote ethanol use, including tax incentives, funding for research and development, funding for technology, and other measures. The report even covers the basics of ethanol production; how ethanol differs from other fuels, and the benefits consumers derive from using ethanol.

This reports sells for $397 and can be ordered at

Cellulose ethanol can be produced from various types of biomass including waste from urban, agricultural, and forestry sources. Unlike normal ethanol, which is made from sugars and starches, cellulose ethanol is produced from cellulose, which is largely a byproduct. It can be derived from agricultural residues such as wheat straw or grass seed straw; forestry residues such as sawdust; municipal solid waste; pulp and paper mill sludge; or other cellulose biomass feedstocks using an acid hydrolysis technique. However, it is only recently that cost-effective technologies for producing ethanol from cellulose have emerged.

Given its environmental and economic benefits, together with the vast availability of biomass and feedstock, ethanol is seen as a viable alternative to fossil fuel going forward.

Ethanol as a Source of Energy: Ethanol has been used as a fuel since the inception of the automobile. Early on, ethanol /gasoline blends were promoted as an octane enhancer to replace lead, and later ethanol was touted as an oxygenate to cut the emissions of unburned hydrocarbons and carbon monoxide. Cellulose ethanol reduces GHG emissions by 85% over reformulated gasoline.

Today’s vehicular engines can all utilize a blend of gasoline with 10% ethanol (E10), and modified engines can run on up to 85% ethanol (E85). A recent study on the net energy gain of using ethanol versus gasoline concluded that ethanol yields more energy than it takes to produce, while gasoline actually yields less energy than it takes to produce. When blended with gasoline, ethanol increases the octane rating (decreasing engine stress) as well as overall fuel economy.

The Cellulose Ethanol Market: By the end of 2005, the annual capacity of the US ethanol sector topped 4.4 billion gallons, and consumption reached 2.7 billion gallons. If this trend continues and policy incentives support ongoing growth, ethanol demand is expected to grow at the rate mandated by the 2005 Energy Bill and reach 7.5 billion gallons by 2012. However, there are some technological and economic obstacles to the full commercialization of ethanol production, and several important issues must be resolved before the US can fulfill its vision of energy security.

The Outlook for Cellulose Ethanol: Many states banned MTBE after studies showed that this fuel additive pollutes drinking water. At the same time, ethanol production costs are dropping to levels below those of gasoline, stimulating even greater demand as oil companies seek to lower prices at the pump. This will allow E85 fuel to become a practical alternative fuel source for the cost sensitive consumer.

Prior to 2003, ethanol usage in gasoline was generally confined to the Upper Midwest states and was encouraged by federal and state tax subsidies. Since 2003, the use of ethanol has significantly accelerated as a result of MTBE bans in California, New York, and Connecticut, and the continuation of the oxygenate requirement for reformulated gasoline (RFG). The Energy Policy Act of 2005 has assured the continued growth of ethanol usage through its renewable fuels standard (RFS) provisions.

Other Topics covered in this report include:

  • Market dynamics including current and future market potential;
  • Market growth and development: a cost analysis;
  • Commercialization trends, and barriers to development of the cellulose ethanol market;
  • An in-depth analysis of leading industry players;
  • The role of government.

The Market for Cellulose Ethanol report is an intelligent analysis of this promising young industry and the market potential of ethanol as an alternative fuel source.

About the Publisher: "The Market for Cellulose Ethanol" is published by Energy Business Reports (, an energy industry think tank and leading source for energy industry information and research products. Details on all reports can be found at

Press Contact:
Barbara Drazga
Tel 800-304-0345


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