SubsidyEye

Ethanol Stocks: The Good News and the Bad

"It seems that biodiesel has a much better future than ethanol. There is too much government involved in ethanol." -- bobjou

You need to read up on biofuel policy, bobjou. Federal support for biodiesel is as heavy as for ethanol, granting it $1.00 per gallon in tax credits, compared with $0.51 per gallon for corn ethanol. In addition, most producers benefit from a $0.10 per gallon Small Producers Credit on the first 15 million gallons they produce in any given year. Producers in Kentucky get an additional $1.00 per gallon, and producers in Pennsylvania $0.75 per gallon.

First-generation biodiesel would have no future (except as a botique fuel made from waste cooking oil) were it not for these subsidies. The price of feedstock accounts for 80% or more of the cost of producing biodiesel, and that cost is today almost 3x what it was three years ago.

Biodiesel from algae may have a bright future ... eventually. But it is still in the pilot and demonstration stage.