Will Cellulosic Ethanol Ever Get Here?

Cellulosic fuels and chemicals have long been heralded as the inevitably disruptive future of American transportation and manufacturing. You couldn't tell by fueling your car, but the use of cellulosic ethanol is actually mandated by the United States government and Environmental Protection Agency. The Energy Independence and Security Act of 2007 -- also known as the second Renewable Fuel Standard, or RFS2 -- outlined an ambitious vision for renewable fuels in America all the way to the year 2022. Corn ethanol and biodiesel have not had any problems reaching their targets. In fact, the mandate drastically underestimated the pace of growth in the two industries.

Next generation fuels have not enjoyed the same success. Their lack of maturity is weighing heavily, perhaps unfairly, on the credibility of the RFS. The original legislation called for 1 billion gallons of cellulosic ethanol to be blended into gasoline in 2013. The EPA recently reduced the target to a whopping 6 million gallons. Will cellulosic ethanol ever get here? Fool contributor Maxx Chatsko explains what's holding the industry back and what investors can expect in 2014.

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Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio, his CAPS page, or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and biotechnology.Joel South has position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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