Cellulosic Ethanol Depends on Government support

The price of ethanol is closely tied to the price of oil. Ethanol composes a tiny fraction of total fuel consumption, and as an alternative to oil, it must therefore be sold at a price that competes with oil. As the price of oil rises, the price at which ethanol producers can sell their ethanol also rises.
Still in its nascency, cellulosic ethanol depends heavily on government support, including broad support for ethanol. When the government announces new initiatives to support renewable energy, ethanol, or cellulosic ethanol, stocks in the sector tend to benefit. Cellulosic ethanol in particular, which requires investment in R&D before it can achieve cost-parity with grain-based ethanol, will be supported by the widespread adoption of new distribution systems and automotive technologies. Read posted by Geetha @ 10:10 PM