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Cellulosic Ethanol Gets A Boost From House Bill

Location: Washington, DC


An alternate form of ethanol will receive a big boost if a bill approved by the U.S. House of Representatives is signed into law. The House has passed the Tax Relief and Health Care Act of 2006, which contains a provision designed to encourage the production of cellulosic ethanol.

"As we seek to find ways to end our addiction to foreign oil, we must continue to explore all the possibilities offered by ethanol," Hulshof said. "Cellulosic ethanol holds great promise in that it can be produced from cheap, abundant feedstocks that are often considered waste products. Actions that promote the viability of cellulosic ethanol will help us in our efforts to achieve energy independence and it will be a boon for our farmers."

Right now, the vast majority of ethanol produced in the United States is derived from corn. Emerging cellulosic ethanol technology will allow fuel to be produced from biomass such as corn stalks, rice straw, and switch-grass, just to name a few.

"The development of this new cellulosic ethanol technology will help make ethanol more available and more competitive compared to other forms of conventional fuels. The incentive in this bill is good energy policy that will accelerate the production of cellulosic ethanol," concluded Hulshof.

The bill passed by the House provides a 50-percent bonus depreciation for new qualified cellulosic ethanol plants placed in service through December 31, 2012. This will help reduce the cost of capital for entrepreneurs that build a facility capable of producing cellulosic ethanol.

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