Canada's Ethanol Boom, Minus the Boom

by Shawn McCarthy (Globe and Mail) Three years ago, a tiny Ottawa biotechnology firm, Iogen Corp., had the very rare privilege of being singled out by the government as a company that would benefit directly from a federal budget measure.

As part of its effort to reduce Canada's greenhouse-gas emissions, Finance Minister Jim Flaherty announced a $500-million fund to underwrite construction of commercial ethanol plants that would use agricultural or forestry waste to make transportation fuel. The budget identified Iogen as a leading candidate.

But as Mr. Flaherty prepares to unveil the 2010 budget this week, there is still no plant at the proposed site in Prince Albert, Sask., and no firm commitment from Iogen and its partner and part-owner, Royal Dutch Shell PLC, to build one.

...Bruce Orr, a former Ontario government biofuels adviser, said Iogen and other cellulosic ethanol makers still face tremendous hurdles in scaling up from small demonstration plants because their enzymes simply don't break down the cellulose into ethanol efficiently enough. "There has been a lot of hyperbole about cellulosic ethanol, but there are still a lot of doubts [the Iogen project] will ever happen." READ MORE