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Wed 06 May 2009 View all news
The US Government has set out a $1.8bn (£1.19bn) plan to develop a new generation of more environmentally-friendly biofuels that are not made from food crops and which have a lower carbon footprint, while also providing an immediate bail-out of existing corn ethanol producers, who are suffering from the economic recession and falling demand.
The new proposals on biofuel signal that the US administration does not see ethanol production as a solution in terms of cutting CO2 emissions. Furthermore, the administration sees the use of food crops for biofuel as the cause of part of the large food price rises in seen in 2008. The US Environment Protection Agency (EPA) has proposed a new standard for advanced biofuels, ensuring that they are at least 50% cleaner than petrol. The Agency says it will also take into account the environmental impact of turning land over to biofuel crops, one of the key demands of the industry's critics. The programme envisages $1.1bn to help ethanol producers market the fuel, and to convert their processing plants from fossil fuels to renewable energy. The new Energy Secretary Steven Chu said there would be an additional $786m towards the development of new biofuel refineries and the design of flex-fuel cars.
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