WSJ:

The Environmental Protection Agency said Wednesday that it expects the biofuels industry to produce 6.5 million gallons of cellulosic ethanol this year, a fraction of the volume anticipated by Congress.
The announcement suggests that government goals for turning inedible crops into transportation fuel have been unrealistic and too optimistic about the private sector’s ability to advance existing technology and finance new refineries for biofuels.
In 2007, Congress had mandated that 100 million gallons of cellulosic ethanol — a fuel additive to gasoline made from switchgrass, sugar cane bagasse and other plants — be blended into the nation’s fuels this year. By next year, the mandate was for 250 million gallons, heading up to 16 billion by 2022.
“It is certainly going to be a challenge,” said Michael J. McAdams, president of the Advanced Biofuels Association, a trade group that represents companies working on cellulosic ethanol and other technologies.
The failure of the cellulosic ethanol industry to even come close to meeting the mandated goals could give a boost to advocates and lawmakers who believe setting goals for individual fuel technologies is the wrong approach.
Biofuels advocates fault the recession and tight credit conditions in 2008 and 2009 for freezing development. “The economy slowed things down as the starter pistol fired,” said Brent Erickson, an executive vice president of the Biotechnology Industry Organization, a trade group that represents several large companies investing in biofuels.
Other problems also cropped up. In April, the EPA said Alabama-based Cello Energy would generate about 70 million gallons in 2010. A federal jury ruled last summer that the company had defrauded investors, but Cello said the ruling had not been entered yet and could be vacated. The EPA said Wednesday that these legal issues had “constrained the company’s capital” and revised its forecast to two million gallons.
The EPA also noted that Range Fuels Inc.’s Georgia wood-to-ethanol plant, despite $150 million in federal grants and loan guarantees, would produce only a quarter of the anticipated 10 million gallons. Range Chief Executive David Aldous said he expected to slowly start up the facility in the second quarter.